(KRNV) — Forget inflation; there's a new buzzword in town: tipflation. It's the sneaky trend where tipping norms creep up, leaving both customers and businesses scratching their heads.
So, what's the deal with tipflation? Well, tipping was a little bonus for exceptional service, right? But now, it's like an unwritten rule that you have to tip and tip big, no matter where you are or what service you're getting.
The constant requests from tips is now resulting in customer backlash.
In fact, according to new data from the Bank Rate, 66% of Americans now have a negative tip total, especially since most places are asking for a 20% tip.
According to a report conducted by digital payment company Square in 2019, tip rates were 15%, but that number has since jumped to a record 22%.
Many customers are now wondering why the demands have increased and etiquette expert Elaine Swan says COVID is to blame.
What we saw in the pandemic is that people were over tipping because they knew the service industry was hit hard, but now that we are on the other side previous generosity has now become an expectation.Tipflation has placed both customers and service workers in a difficult position as many are now cutting back on tips.
The minimum wage in Nevada is $11.25, which is a year's salary of $21,645. However, according to the personal finance site SmartAsset, a single person in Reno, Nevada, needs to make an annual salary of $83,000 to live a comfortable life.
However, customers often rebuttal the need for tips, blaming the owner for not increasing wages for staff.
Ryan Goldhammer, the Owner of Noble Pie, says the solution is not so black and white.
Big corporations like Starbucks and McDonald's have the finances to increase wages, but for small businesses like us who have to remain competitive in our sector and by increasing wages, we would have to increase food prices, and that takes away power from the customer. You see, with tips, you decide how much you want to leave," says Goldhammer.Not only are customers choosing to scale back on tips , but a middleman may be consuming tips that would have gone to workplace staff.
Maine has been ahead of the tipping trend by 10 years. Producing his thesis paper on tipping attitude, and he says many of the changes we see now are come to what was seen back in 2014, but that didn't account for the rise in food delivery apps.
Customers need to watch out for tips and hidden fees on receipts.
Service fee charges are on the rise. The fee is often applied at check-out and can range in price, but it doesn't go to staff but rather the company.
The controversy around service fees often comes from people feeling like they're kept in the dark about what they're paying for. When fees aren't clear upfront, it can lead to frustration and a sense of being ripped off. Some also think the fees are unfair, especially if they're high compared to the service provided. Businesses need to be upfront about fees and make sure they're reasonable, so customers feel like they're getting their money's worth.
The Bidden Harris administration is working on legislation to take service and junk food as they cost Americans millions of dollars.
The service industry is undoubtedly changing, but when it comes to tipping, it is ultimately the customer's choice, with or without judgment.
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