MADISON (WKOW) —To tip or not to tip? That's the question consumers across the country face right now as tipping amounts surge and many businesses implement their own tipping systems.
And for many, tipping fatigue has set in.
Tipping fatigue is the weariness consumers are experiencing as the demand increases for tips on goods and services.
Economist Steven Deller from UW-Madison says it's been exacerbated by the coronavirus pandemic.
He said when the pandemic started, people were urged to tip workers more for being on "the frontlines." But now that the pandemic has ended, the practice has stuck around for a few reasons.
"I think in the current labor shortage situation, particularly in the service industry that relies on tips, post COVID, these companies are having a very hard time attracting and retaining workers," Deller said. "So, they're doing everything that they can to try to up the base income of their workers."
Countries in North America are actually among the few nations in the world to still utilize tipping. In fact, in other countries, tipping can be seen as rude or demoralizing.
Deller says it's expected that servers in other countries receive fair wages already, and in most cases, service charges are added to the price of the bill automatically.
"In Europe, most waitstaff gets paid a decent wage," Deller said. "And the expectation on a tip is simply not there."
Studies also show that the advent of digital payment methods has also contributed to a change in tipping culture in America.
Digital payment companies like Square have revolutionized the market when it comes to tipping. They're one of the companies that created an automatic tipping screen consumers are often presented with on iPads in cafes and restaurants — oftentimes providing suggested tipping options.
According to Square, tipping amounts increased by more than 25% at full-service restaurants in the third quarter of 2022. Tips increased by more than 16% during the same period at over-the-counter, quick-service restaurants.
Deller believes that has to do with the pressure customers feel when presented with tipping options directly in front of the person providing the service.
"Businesses are trying to say that they're actually making it more convenient for customers to be able to leave tips, but it's coming across as being overly aggressive," Deller said.
A new restaurant in Madison opening Tuesday is "flipping tipping" on its head, hoping to alleviate some of that tipping fatigue.
Sultan, a Pakistani restaurant at 1054 Williamson Street, is offering a "no-tip" policy. Instead, they're factoring the cost into the price of food and paying their employees $20 an hour.
Full-time employees will also receive a 5% profit share monthly.
"Because we live in a tipping society, I think a lot of businesses ended up taking advantage of that," Sultan owner Sultan Ahmed said. "And now we have... seen these posts on the internet all the time, like the suggested tips like 35%, or whatever, which to me, is kind of ridiculous. Like, I think if a business can't afford to pay its employees, then it shouldn't be in business."
Ahmed says he's hoping his restaurant serves as an example to others to do the same thing. Although even he admits, he isn't 100% sure it will work just yet.
"If the business fails, well, then it fails and back to the drawing board," Ahmed said. "But I think first and foremost, my hope is that it works. And it becomes a model for other restaurants to kind of do the same thing."
