(CNN) — A new payment trend is sweeping across America, creating an increasingly awkward experience: the digital tip jar.
You order coffee, ice cream, salad or a slice of pizza and pay with your credit card or phone. Then the clerk behind the counter spins around the touchscreen and slides it in front of you. The screen has several suggested tips, usually 10%, 15%, or 20%. There is also often an option to leave an individual tip or leave a tip altogether.
The worker is directly in front of you. Other customers stand in the back, waiting impatiently and looking over your shoulder to see how much you’re tipping. And you have to make a decision within seconds. Oh Lord, the stress!
Customers and workers today face a radically different tipping culture compared to just a few years ago, with no clear norms. While consumers are accustomed to tipping waiters, bartenders, and other service workers, tipping a barista or cashier may be new to many shoppers. That’s largely due to changes in technology that have allowed business owners to more easily shift workers’ compensation costs directly onto customers.
“I don’t know how much you should tip, and I research it,” said Michael Lin, a professor of consumer behavior and marketing at Cornell University and one of the leading researchers of tipping habits in the United States.
Adding to the changing dynamic, customers were encouraged to tip generously during the pandemic to help keep restaurants and shops afloat by raising expectations. Total tips for full-service restaurants rose 25% last quarter from a year ago, while tips at quick-service restaurants rose 17%, according to Square.
The transition to digital payments also accelerated during the pandemic, allowing stores to replace old-fashioned cash registers with tablet touchscreens. But these screens and digital tipping procedures have become more intrusive than a low-pressure cash can with a few bucks in it.
Customers are overwhelmed by the number of places they now have the option to tip and feel pressured whether to tip and how much. Some people intentionally walk away from the screen to avoid making a decision, say etiquette experts who study tipping culture and consumer behavior.
Tipping can be an emotionally charged decision. Tipping is treated very differently in these new settings.
Some customers tip no matter what. Others feel guilty if they don’t tip or embarrassed if their tip is stingy. And others shy away from tipping for a $5 iced coffee, saying the price is already high enough.
“The American public feels that tipping is out of control because they’re experiencing it in places they’re not used to,” said Lizzie Post, co-chair of the Emily Post Institute and her namesake’s great-granddaughter. “Moments where tipping is not expected make people less generous and uncomfortable.”
Starbucks introduced tipping this year as a way for customers paying with credit and debit cards. Some Starbucks baristas told CNN that tips add extra money to their paychecks, but customers shouldn’t feel obligated to tip every time.
In Washington state, one barista said she understands that a customer does not tip for a drip coffee order. But if he makes a customized drink after talking to the customer about how to make it, “it makes me a little disappointed if I don’t get a tip.”
“If someone can afford Starbucks every day, they can afford to tip on at least some of those trips,” added the employee, who spoke on condition of anonymity.
Tipping seems ubiquitous today, but the practice has a troubled history in the United States.
The tip became popular after the Civil War as an exploitative measure to keep wages low for newly freed slaves in service occupations. Pullman was most notable for its tipping policy. The railroad company hired thousands of black porters, but paid them low wages and forced them to rely on tips to make ends meet.
Critics of tipping argued that it created an imbalance between customers and workers, and several states passed laws in the early 1900s to ban the practice.
In “The Itching Palm,” a 1916 story about tipping in America, writer William Scott said that tipping was “un-American” and argued that “the relationship between the tipper and the man who receives it is as undemocratic as “. of master and slave.”
But tipping service workers was essentially made law by the Fair Labor Standards Act of 1938, which created a federal minimum wage that excluded restaurant and hospitality workers. This allowed the tipping system to proliferate in these areas.
In 1966, Congress created a “minimum” wage for tipped workers. The federal minimum wage for tipped workers is $2.13 an hour, down from the $7.25 federal minimum since 1991, although many states require higher base wages for tipped workers. If a server’s tips don’t make the federal minimum, the law says the employer must make up the difference. But that doesn’t always happen. Wage theft and other wage violations are common in the service industry.
The Department of Labor considers any employee who works in a job that “customarily and regularly” receives more than $30 in tips per month to be classified as tipped. Experts estimate that there are more than five million tipped workers in the United States.
Tips for tipping
How much to tip is completely subjective and varies from industry to industry, and the correlation between service quality and tip amount is surprisingly weak, says Cornell’s Lin.
He theorized that 15% to 20% tipping in restaurants has become standard because of a cycle of competition among customers. Many people tip in anticipation of social approval or better service. As tipping levels increase, other customers begin to tip more to avoid any loss of status or risk worse service.
The gig economy has also changed tipping norms. An MIT study published in 2019 found that customers are less likely to tip when workers have autonomy over how and when to work. Nearly 60% of Uber customers never tip, while only about 1% always tip, a 2019 study by the University of Chicago found.
Lin said it’s confusing that “there’s no central authority that sets tipping norms. They come from the bottom up. After all, it’s what people do that helps determine what other people should do.”
You should almost always tip minimum wage workers, such as restaurant servers and bartenders, attorneys and tipping experts say.
Etiquette experts say that if tips are allowed in places where workers are paid by the hour, such as baristas at Starbucks, customers should use their discretion and take any guilt out of their decision. Tips help these workers supplement their income and are always encouraged, but it’s okay to say no.
Etiquette experts advise customers to approach the touchscreen version the same way they approach a can. If they leave change or a small cash tip in the jar, do so when prompted on the screen.
“A 10% tip for a meal is a really common amount. We also see change or a dollar per order,” Lizzie Post said. If you’re not sure what to do, ask an employee if the store has a recommended tip.
Saru Jayaraman, president of One Fair Wage, which advocates for an end to the minimum wage policy, encourages customers to tip. But tips should never count toward service workers’ wages, and customers should demand that businesses pay workers full wages, he said.
“We should tip, but that should be coupled with telling employers that tips should be high, not the full minimum wage,” he said.