‘Tip-flation’: What’s behind rising tip percentages at restaurants?

By Megan DeLaire

Click here for updates on this story

    Toronto (CTV Network) — In North America, tipping on meals in restaurants is as much a part of the experience of dining out as reading a menu. And in Canada, the amount diners tip as a percentage of their bill is going up. Data points to increases taking place across provinces during the pandemic while, anecdotally, experts say tip percentages started creeping upward a few years before COVID-19 entered the picture. The reasons why range from diners’ altruism during the pandemic, to the practice by some restaurants of changing their payment prompts, according to experts in the food and hospitality industry. A survey conducted by Restaurants Canada in April 2022 found 44 per cent of Canadians surveyed said they were tipping a higher percentage of their bill when dining at a table service restaurant, compared to prior to the pandemic. While the standard tip for table service across Canada was around 15 per cent before the pandemic, as of April, Canadians said they were tipping 17.6 per cent on average. James Rilett, Restaurants Canada central vice president, attributes these changes mostly to sympathetic diners, excited to return to restaurants after pandemic-driven dining room closures and eager to support the staff. “I think as people realize a lot of servers and all restaurant employees missed a lot of time when we were shut down or had restrictions, people are saying they want to recognize what servers have been through,” Rilett told CTVNews.ca in a phone interview Friday. “I think it’s overall a goodwill feeling coming from being in a restaurant.” Rilett pointed out some provinces with the highest increases in tip percentages given by customers,such as Ontario, also endured some of the longest dining room closures during the pandemic. In Ontario, 53 per cent of those surveyed said they tip more when dining out compared to before the pandemic, now tipping 18.9 per cent of the after-tax bill on average. In British Columbia, where a lower percentage of respondents said they tip more compared to pre-pandemic, one restaurant manager says tips at his location are higher on average than during pandemic closures, but roughly on par with pre-pandemic percentages. Hitesh Verma manages a Montana’s BBQ and Bar in Tsawwassen, B.C. He said tip percentages dropped to between 8 and 12 per cent on average during pandemic closures, when patrons could only order takeout. Despite this, he said tips have returned to pre-pandemic levels of roughly 17 to 18 per cent with the reopening of dining rooms. “I would say it was almost the same, or not that much of a difference from before the pandemic,” he told CTVNews.ca in a phone interview Thursday. HOW TIPPING IS CHANGING In a phenomenon called “tip-flation,” University of Guelph food economist Michael von Massow said tip percentages can rise due to a range of “organic” factors such as changing social norms, and external factors like tip percentage prompts on restaurant menus and debit machines. While the pandemic accelerated some of these trends, von Massow says they were growing before March 2020. “I think there are two ways the tips go up,” he told CTVNews.ca in a phone interview Friday. “The first…happens organically. We have conversations, we hear stories in the news about how little people in the restaurant industry earn and we just feel like the social norm changes, the social norm nudges us up and we tip more. I think that sort of organic growth was accelerated before the pandemic came,” he said. Von Massow added that altruism during the pandemic likely served to accelerate this rising standard for tipping across Canada further. “The other thing that affects tips are the signals restaurants send to us, so we have these nudges that happen,” he said. One of the ways restaurants nudge diners to leave higher tips, von Massow explained, is by listing suggested tip percentages on the menu or programming them into the debit terminal, since the majority of diners use a debit or credit card to pay for their meals. While the customary tip for table service at Canadian restaurant is 15 per cent or higher, von Massow said a growing number of restaurants across the country are programming their debit machines to prompt tips starting at 18 or even 20 per cent. “Psychologically do we want to push the button that is the lowest amount or are they sort of trying to nudge us to that middle amount?” von Massow said. “And I think, to a degree, we’ve seen those numbers creep up as a way to sort of guilt or pressure us into tipping more.” While tipping in restaurants is a societal norm and something many staff rely on as part of their income, von Massow said no one should feel pressured to tip more than a standard percentage. If a diner is presented with a debit machine prompting for a tip percentage higher than they feel is appropriate, he said they should ignore the prompt and enter a custom tip percentage. Most debit machines allow for custom tip percentages and dollar amounts, he noted. “Tipping is the social norm,” he said. “But it is completely a choice and you have to be comfortable with what you choose.”

Please note: This content carries a strict local market embargo. If you share the same market as the contributor of this article, you may not use it on any platform.

Tom Yun