The way tips are handled varies from country to country. While in Germany, 10 to 15% of the bill is recommended as a tip and the guest gives it voluntarily if he or she was satisfied, in the USA, for example, it is customary to put the tip directly on the bill and add it to the cost of the meal.
In Germany, guests have the freedom to skimp on the tip or refuse it altogether if they were not satisfied with the service or the food. Here, there is no right to tip, though it is granted in most cases. In the U.S., on the other hand, innkeepers or service personnel take tips for granted. Here, they are considered part of the income, because wages in the restaurant business are so low that it is almost impossible to make a living from them.
Tipflation is the inflation of tips
Now a new trend has emerged in the U.S.: tipflation, a neologism made up of inflation and tip, describes the condition in which tips have risen excessively, almost as a matter of course. Employees in the catering trade put the tip from the outset as a fixed amount on the bill – this can be 20% and more, because less is basically regarded as a bad tip.
In relation to the service provided, the tips are less and less justified, as this increasingly leaves a lot to be desired. Even during the Corona pandemic, tips in the USA rose sharply. Now (2023), pubs and restaurant staff are tightening their demands even more. They believe they are entitled to high tips and complain massively if they think the tips are too low.
Since service employees in the USA regard their tips not as a reward for good service but as part of their salary, they believe they can always demand more. This behavior is particularly pronounced with credit card payments. Guests are not even asked whether they are willing to pay a tip; instead, they are given a fixed sum. Guests are coerced into paying a tip. More and more feel they are being taken advantage of and find the high demands simply outrageous.
Tipflation: The tipping culture in the USA is becoming a nuisance
Tips are a significant part of the income of employees in the service sector in the USA. According to surveys, tips increased 17% from October to December 2022 (compared to the same period last year). This applies not only to restaurants, but also to snack chains, which by design offer less service and quality.
Meanwhile, restaurant chains are even adding tips to the bill for self-service diners. Even at supermarket checkouts, where customers scan the goods themselves, tips have recently been added to the bill. Tip inflation is so rampant that even hotels are demanding flat rates for tips. These can be as high as 30 U.S. dollars per night.
In the USA, a compulsion to tip has meanwhile developed, leading to more and more resentment among the clientele. There is still no agreement on when and, above all, how much to tip. As a result of the Corona pandemic and the Ukrainian war, more and more employees in the service industry are having to reckon with a drop in pay. Thus, the call for higher tips is becoming louder and louder in Europe as well. But imposing an indirect obligation on customers is deeply dubious.