As inflation raises prices across the board, an old American habit is becoming more costly to keep up – tipping.

Although not as prevalent in many parts of the world, like Europe, Australia, or Japan, tipping is deeply entrenched in the US hospitality industry. It has long been customary for most consumers to tip service jobs.

Yet the practice has evolved in recent years along with broader changes in the gig economy and is ballooning across various sectors.

Great for service staff, this “tipflation” poses a conundrum for American consumers. Many who find themselves questioning the necessity of near-constant gratuity payments, feel like things have gotten out of hand.

In both frequency and scale, tipping is on the rise. According to data from digital payment platform Square, gratuity payments received by restaurants in 2022 were up over 15% year-over-year for both full-service and quick-service establishments.

Through the Roof

Tips requests are popping up everywhere, with the largest increase occurring on digital payment platforms. According to Square, roughly three-quarters of all remote cash transactions featured online tipping in February this year (up from around 43% in February 2020).

The rates expected from people are also rising. Though tipping rates tend to vary between individuals and locales, long-established standards for tipping rates have been broken in recent years.

The classic 10% tip from the post-war period may be history, but studies show that even the former 15% rate, standard in the 1980s, is long gone. One survey by from last year found that an average of 20% is becoming the norm for most consumers.

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