‘Tipflation’ explained: Professor explains explosion of tipping prompts at restaurants, cafes and businesses

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In a trend that some pundits are calling “tipflation,” many Americans are being asked to tip more and far more often than they have in previous years, especially before COVID. 

Professor Ismail Karabas, assistant professor of marketing at Murray State University, explained why in a phone interview with Fox News Digital

“Tipping requests have been around for a long time, but the surge began pretty much right with the pandemic, because that’s when we decided to use the digital payment process a lot more than before,” Karabas said. “All of these requests are coming through those digital payment systems,” also known as “POS [point of sale] devices.” 


POS companies, like Square, Toast and PayPal, make up a significant portion of the payment industry, the professor said. They also are often the companies that supply the software for tipping prompt devices that appear at the end of customer interactions in restaurants, cafes, bars and other businesses. 

It is a trend that “began with the pandemic and maybe a little bit before,” Karabas said, adding that “the pandemic was the reason why we saw an uptick on the whole amount of [tipping] requests.” 

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The explosion in tipping prompts has also spread to “other establishments, like cafés, chain restaurants,” and even other businesses that do not usually rely on tips.


However, Karabas emphasized that it is really companies like “Square and Toast” that have pushed the tipping revolution into a new era, adding “tip requests” into their software “a lot more than before and on a lot more occasions than before.” 

That is not to say that only POS service companies benefit from increased tipping prompts, Karabas explained. 

“Yes, the managers have the option to opt out of this, but why would they?” he said. 

“The catch here is it creates a win-win for them. It’s a good win for the business because their employees get to make more in salary and their turnover rates are lower. They get to offer a better occupation, and hopefully with some more benefits than before and overall just happier employees, more motivated employees. But then the second win is for the POS companies because they get to charge fees on everything, every transaction through these devices. So more tips mean they earn more fees.” 

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Karabas also shared a possible downside for businesses that go overboard on tipping requests, sharing a study that he helped lead which found that tipping prompts at a “quick service restaurant” can actually make customers “irritated with the whole transaction. And that irritation makes them less likely to return to [those] establishments.” 

Looking into the near future, Karabas predicted tipping prompts might “expand further,” excepting government intervention or regulation.

And while some customers may feel “upset and confused” at the sudden explosion of tipping prompts, “on the economic side, it is providing additional help and additional wages to employees.” 

“People wonder whether or not tip and how much to tip. That’s just natural,” he said. “So my recommendation would be that there’s kind of a loophole. Technically, if you pay with cash, that means you’re not going to interact with the device. And if there’s nobody will go out of their way to ask you whether or not you want to tip. So in a way, paying with cash would allow some customers to avoid being requested to tip if it’s irritating [to them].”

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Americans are growing weary of tipping expectations and admit they don’t tip as much as they used to, according to a study from February.

CouponBirds surveyed 1,199 Americans about their own tipping habits before asking another 628 Americans about their views on tipping and wages for servers.

Over three-quarters of Americans surveyed believe tipping expectations have “gone too far,” citing the increasing presence of gratuity requests at self-service kiosks, convenience stores and the like.

Fox News’ Kristine Parks contributed to this report.


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