ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / ECONOMY & WORK

How Businesses Trick Customers into Over Tipping

The evolution of payment methods and the introduction of touchscreens have given rise to new strategies aimed at maximizing tips.
PUBLISHED APR 4, 2024
Cover Image Source: Pexels | Photo by Patrick Tomasso
Cover Image Source: Pexels | Photo by Patrick Tomasso

In the age of digital payments and touchscreens, tipping has not only become more convenient but also more contentious. A recent surge in anger towards tipping stems from what experts are calling "tipflation," a practice where businesses attempt to extract higher gratuities from customers through various tactics. While tipping has long been a customary practice, the evolution of payment methods and the introduction of touchscreens have given rise to new strategies aimed at maximizing tips. But before you succumb to the pressure, it's important to understand these tactics and protect your hard-earned money.

Image Source: Unsplash|Photo by Viacheslav Bublyk
Image Source: Unsplash | Photo by Viacheslav Bublyk

One of the most insidious methods employed by businesses is the inclusion of sales tax when calculating suggested tips. According to a Square spokesperson, some establishments sneakily incorporate sales tax into the total bill before suggesting a tip, significantly inflating the gratuity amount. This practice can catch customers off guard, leading them to unknowingly leave a larger tip than intended.

Etiquette experts at the Emily Post Institute recommend tipping between 15% and 20% on the pre-tax total at sit-down restaurants. However, the decision of whether to calculate tips before or after taxes can have a substantial impact on the final amount, especially for larger parties. In some states, this discrepancy could mean leaving nearly 10% extra on your overall gratuity, emphasizing the importance of being vigilant when tipping.

"People are really feeling imposed upon," Etiquette expert, Thomas Farley says. "We’re already living through inflationary times. Everything is crazy expensive. And on top of that, you’re being asked, every time you turn around, 'How much would you like to tip?' It feels pushy."

Moreover, the rise of digital prompting has exacerbated the pressure to tip. A report by Forbes Advisor revealed that nearly 75% of Americans admitted to leaving higher tips when prompted digitally, such as through tablets or smart card readers. This phenomenon, dubbed "guilt tipping," affects roughly 31% of Americans, who feel compelled to pay it forward when prompted digitally.

Image Source: Photo by RDNE Stock project | Pexels
Image Source: Photo by RDNE Stock project | Pexels

Some restaurants have even gone as far as making tipping mandatory by adding a fixed gratuity percentage to bills, regardless of party size. While this move is often justified as catering to international tourists unfamiliar with tipping customs, it has faced opposition from hospitality workers who believe in leaving gratuity decisions to the discretion of customers.

Besides restaurants, other businesses have also adopted creative ways to solicit tips. Tip jars have started appearing in unexpected places like dry cleaners and hardware stores, signaling a shift towards a culture of tipping in traditionally non-tipped industries. Additionally, online businesses are now prompting customers to tip employees they never interact with directly, further blurring the lines of traditional tipping etiquette.

Image Source: Photo by Helena Lopes | Pexels
Image Source: Photo by Helena Lopes | Pexels

In recent months, consumers have also expressed frustration over additional fees sneaked onto bills, including "wellness charges" and even a "bad parenting" fee in one brazen restaurant. These hidden fees, coupled with aggressive tipping practices, highlight the need for consumers to be vigilant when making payments and to question any unexpected charges.

MORE ON MARKET REALIST
The player wasn't too upset about the final result of his bonus round.
6 hours ago
The guest wanted $100,000 but was not able to get an offer, through no fault of his own.
7 hours ago
The company basically produces dolls that require some knowledge of coding to operate.
8 hours ago
The viewers were sympathetic to the player, Vandana Patel, after her heartbreaking loss.
9 hours ago
The host proceeded to ask a hilarious question, which made the whole round immensely entertaining.
10 hours ago
The round was filled with hilarious answers that cracked the host up often.
1 day ago
The contestant was super excited to have made it to the Bonus Round and he won big.
1 day ago
Corey Harrison was interested for a bit but that price immediately made him say no.
1 day ago
Drew Carey tried making a bet with the contestant but she was not having it.
2 days ago
Steve Harvey was left stunned by the answer and had to question the entire family.
2 days ago
Steve Harey forced the contestants hiding to come out and address the situation.
3 days ago
Rick Harrison were creeped out by the handcuffs but still wanted to buy them.
3 days ago
Cuban was interested in the tech side of the company but was annoyed when his doubts got no answers.
3 days ago
She had already won more than $21,000 and a trip to Portugal before heading to the round.
4 days ago
The contestant even apologized to Steve Harvey after her answer was called out.
4 days ago
The host urged fans not to laugh at the answer, as it might come back to bite them in the future.
4 days ago
The seller lacked any solid proof and as a result, nobody on the show wanted to offer him a deal.
5 days ago
The contestant wished that bars gave free alcohol to those already drunk out of their minds.
5 days ago
It would have been easy for Amy Schneider to respond harshly to the accusations, but she remained cool and collected.
5 days ago
The host was left shocked after hearing the answer as he mouthed "wow" a couple of times.
5 days ago