From NY Times:
The flat white coffee drink was $4. A suggested tip was $3.
The cashier at Café Grumpy, a New York City coffeehouse, swiped the credit card, then whirled the screen of her iPad sales device around to face the customer. “Add a tip,” the screen commanded, listing three options: $1, $2 or $3.
In other words: 25 percent, 50 percent or 75 percent of the bill.
There was a “no tip” and a “customize tip” button, too, but neither seemed particularly inviting as the cashier looked on. Under that pressure, the middle choice — $2 — seemed easiest.
American consumers are feeling a bit of tip creep.
Leaving 15 percent for full service (the former standard tip at a sit-down restaurant), and less for quick transactions, is considered chintzy by some people. “We recommend 20 percent absolutely,” said Peter Post, managing director of the Emily Post Institute, which offers guidelines in etiquette.
The very concept of tipping is expanding beyond the service industry, with new platforms that enable Internet content creators to receive Bitcoin tips that reward their creativity rather than a simple thumbs up (or “Like”).
And in many situations, merchants as varied as cab companies and beauty salons rely on the ubiquitous touch screen or mobile app to push higher and higher gratuities.
New York City taxi riders paying with plastic are confronted with buttons for 20 percent, 25 percent or 30 percent tips. Anything less has to be manually entered (and calculated by the passenger).
Purchasers of gift certificates for the day spa Euphoria are asked if they want to include a staff tip; the option 25 percent is automatically checked for those who say yes. (They, too, can manually change it to 15, 20 or 30 percent.) A Miami diner complained on Chowhound of an automatic 24 percent gratuity for a buffet lunch: “I’m a consistent 20 percent or better tipper, but a 24 percent included tip on a buffet Sheesh.”
In December, an Italian restaurant in Los Angeles, Alimento, took a different approach. It added a second gratuity line to diners’ checks — “tip” (for the server) and “kitchen” (for the traditionally untipped workers in the back).
The hints and prods come at a time when the plight of low-wage workers is increasingly in the national spotlight and battles over raising the minimum wage continue. Some states, including New York, are considering lifting the subminimum wage threshold pay for workers like waiters, who are expected to earn a substantial portion of their pay in tips. But as expected gratuities edge up, even conscientious and generous tippers wonder if there might be a better way.
“I would much prefer everybody get a raise and do it the way the Europeans do and include it in the price,” said Helaine Olen, a personal finance blogger and author of the book “Pound Foolish: Exploring the Dark Side of the Personal Finance Industry.” “But we don’t live that way.”
Instead, Ms. Olen said, people should plan for tipping obligations like other household expenditures. “You need to just sort of budget it in the same way as if you’re going to fly and you know the airline is going to charge for your suitcase.”
Tipping as an American practice stretches back centuries. “There are records of George Washington and Thomas Jefferson giving tips to their slaves,” said Michael Lynn, a professor of consumer behavior at Cornell University’s School of Hotel Administration, who has studied changes in tipping habits. In the 1940s, he said, the average restaurant tip was about 10 percent. “It’s very clear that tip sizes have increased over time,” he said, adding that he could not predict how high they would go.
Some question whether expected tips will edge up to a point where they can no longer be counted on as “add-ons,” leading employers to rethink pricing and salary structures. Patrons of the fast-growing car service Uber frequently cite its ban on tips as one of the attractions, even if prices are higher than for taxi fares. A brew pub called Public Option that is scheduled to open in Washington, D.C., will not allow tipping; its owner has said he plans to pay his workers at least $15 an hour.
Still, the concept of tipping is spreading. In March, a Silicon Valley company opened ChangeTip, a platform that allows people to send small Bitcoin payments through social media, email, Skype or text to show their appreciation for content creators (or anyone) on the Internet.
“The onset of iPad P.O.S. systems is completely changing the way consumers tip,” said Justin Guinn, a retail market research associate at Software Advice, who recently completed a study on the effect of such systems on tipping practices for clients in the restaurant industry. “Just this morning, I gave a 40 percent tip on my $2.50 coffee because the cafe’s P.O.S. system has a ‘smart tipping’ feature.”
Such a feature, he explained, automatically adjusts preset tipping options on orders less than $10 to $1, $2 or $3. But for orders greater than $10, it changes them to 15, 20 or 25 percent.
“It’s genius,” Mr. Guinn said.