What is Tipflation?

Tipflation is a term that is sweeping the Internet right now. Tipping is a term that refers to the practice of giving a small amount of money to someone who provides a service, such as a waiter, a taxi driver, or a hairdresser. Tipping is usually voluntary and depends on the quality of the service and the customer's satisfaction.

Tipping is common in some countries, such as the United States, Canada, and the United Kingdom, but not in others, such as Japan, China, and New Zealand.

Speaking from my USA perspective, Tipping has been limited to service jobs where employers pay a smaller hourly wage, but the service employee keeps the tips. For example, the Minimum wage where I live is 13.20 per hour but you can hire a waiter at $10 per hour plus tips. The combination brings the wage to $15.55 on average per hour. A win for both the employer and the employee. This may be a fairly USA-based practice - but you can let me know in the comments.

Tipflation is a term that refers to the phenomenon of increasing the number of industries that are asking for tips. The practice of Tipping that was once limited to service workers, such as waiters, bartenders, delivery drivers, etc., is now moving into areas we have not seen before and in ever-increasing amounts.

Social norms, peer pressure, guilt, gratitude, generosity, or inflation influence Tipflation. However, technology and the automation of the checkout system pushed forward by the pandemic is the greatest driver of the issue. This inflationary push is odd because technology has typically been a driver of deflationary forces -- but not in this case. Square, one of the leaders in the space, allows you to add tipping to any cart, regardless of the service and with any percentage in a few clicks.
once implemented, you will see tips increase, and the percentage of tippers increase. Boosting revenue.

You've all seen it as soon as you see the kiosk that spins toward the customer; you know you are about to be asked for a tip for something you never tip on before.

Because of this new revenue stream, companies are offering all sorts of new and innovative ways to tip or "donate ."Including, but not limited to, unattended kiosks in airports..... YEESH!

Tipping has often been a complex and controversial topic. Some think tipping is a voluntary and personal choice that external factors should not influence. Others may say that Tipping is a social and moral obligation that should reflect the value and quality of the service. Tipflation is blurring an already blurry line and creating a backlash. So much so that a recent survey from bank rate.com shows that 66% of Americans now have a negative on tipping. This attitude could negatively affect those that legitimately rely on tipping.

I ran across this issue recently when at a local fair. I purchased a really awesome coffee fudge, and when the guy passed the Square screen for checkout, I was offered the option to tip him 25%. It seemed awkward and inappropriate because I was dealing directly with the proprietor and paying full retail with no other service provided --- other than me tasting a sample. This sort of practice can create a financial burden and stress for customers who may feel obligated or pressured to tip more than they can afford or want to or even when it is unnecessary.

But even if you are uncomfortable, Don't Panic like this lady, though.

@georgiaangel328 #georgiaangel328 #tipping #fastfood #subway #doitip #amiwrong #whatdoido #badvibes #serviceindustry #footlong #iwasntaware ♬ original sound - Georgiaangel328

Tipflation or Tip-Creep will be around for a while, and as consumers, we need to adjust. Devopeling some personal rules on when where, and how to tip is a good place to start. Here are mine.

1) Someone that offers exceptional service.
2) Full-service restaurants. NOT fast-food.
3) My Bartender. (Probably should put in my will)
4) Hospitality and Accommodations: Bellhops, Concierges, Housekeeping,
5) Taxis and Rideshares
6) Personal Services: Individuals who provide personal services, such as hairdressers and barbers.
7) Food Delivery Services

Miss any? Suggestions?

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