Americans tipping less as frustration over prices and prompts grows, hits a six-year low

Tipping in U.S. restaurants has seen a significant decline, with many diners tipping less due to frustration over rising prices and the increasing frequency of tip prompts in places where gratuities were not historically expected.

According to Toast, a company that operates restaurant payment systems, the average tip at full-service restaurants dropped to 19.3% for the three months ending September 30, a trend that has remained steady. This decline underscores the difficult position restaurants are in, with rising ingredient and labor costs clashing with growing customer dissatisfaction.

Tipping at U.S. sit-down restaurants peaked at 19.9% in early 2021, when Americans were feeling more generous as Covid-19 restrictions lifted. However, as menu prices have sharply increased in recent years, many customers are tipping less.

Dining out has become less frequent, and when people do go out, they are ordering less. Andrea Hill, director of operations for HMC Hospitality Group, points out that servers are making less per table, as customers now often skip extra items, like drinks, that they may have ordered before.

John Reilly, a doctor in Washington, D.C., who considers himself a generous tipper, expresses his concern about rising menu prices. He notes that the higher prices have pushed him to reconsider how much he tips.

Americans tipping less as frustration over prices and prompts grows, hits a six-year low

This sentiment is echoed by a survey of 1,000 consumers by restaurant technology company Popmenu, which revealed that only 38% of consumers tipped 20% or more in 2024, a significant drop from the 56% who did so in 2021. As dining costs rise, diners are becoming more budget-conscious, tipping less as a result.

In 2024, Americans went to restaurants less than in 2023, contributing to the most restaurant bankruptcies in decades. The rise in prices is a key factor in this downturn. In Washington, D.C., for example, around 70% of restaurants raised their prices after voters struck down the tipped wage system in 2022. As a result, customers are left feeling frustrated by higher bills, leading to a decrease in their tipping generosity.

Restaurant workers are also facing challenges, with federal data showing that waiters, bartenders, cooks, and other restaurant employees worked fewer hours in 2024 compared to 2023. The increasing use of digital payment systems that prompt for tips, even at places like airport concessions and gas stations, has only added to the pressure on both workers and customers.

Jenni Emmons, a server at an upscale Chicago restaurant, observes that tipping culture in the U.S. is beginning to crack as customers are now being asked to tip for things that weren’t expected in the past.

Some worker-advocacy groups argue that the tipped-wage system, which allows restaurants to pay workers below the minimum wage as long as tips make up the difference, forces customers to subsidize restaurant wages. One such group, One Fair Wage, has been pushing for legislation that would ensure tipped workers earn the same minimum wage as other employees, plus any gratuities. They have won some victories, securing higher minimum wages for tipped workers in places like Chicago and Washington, D.C., with plans to push for similar changes in other states.

Despite these efforts, the restaurant industry is pushing back, warning that eliminating the tipped wage system could further hurt both restaurants and their workers.

Mike Whatley, head of state affairs for the National Restaurant Association, has expressed concern that such a shift could hurt restaurant traffic and profitability. In Washington, D.C., many restaurants have raised prices by about 9% since the tipping wage system was repealed, leading to the addition of service fees and gratuities, which has further complicated the tipping process for customers.

Americans tipping less as frustration over prices and prompts grows, hits a six-year low
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Fritz Brogan, a restaurant owner with five locations in Washington, D.C., says that the higher payroll costs from the new wage laws have led him to raise menu prices by about 10%. He is considering adding service charges to his bills next year to offset additional costs.

However, Brogan points out that this adds to the confusion for diners, who are unsure whether they should still leave a tip on top of the service charge. “The last thing people want is to be doing calculus at the end of the night,” he says.

In Washington, D.C., many diners, like Mohit Ganguly, are confused by the added mandatory fees on restaurant bills. Ganguly says tipping 15% to 20% on top of those fees feels unnecessary, reflecting the growing frustration customers feel as they navigate the increasingly complex tipping system.

As tipping culture continues to evolve in the U.S., both customers and restaurant workers are struggling to adapt to the changing norms and rising costs.

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