{"id":33005,"date":"2023-11-08T11:36:49","date_gmt":"2023-11-08T11:36:49","guid":{"rendered":"https:\/\/microloannexus.com\/personal-finance\/are-we-reaching-a-tipping-point-youre-not-imagining-it-how-businesses-get-you-to-tip-more\/"},"modified":"2023-11-08T11:36:50","modified_gmt":"2023-11-08T11:36:50","slug":"are-we-reaching-a-tipping-point-youre-not-imagining-it-how-businesses-get-you-to-tip-more","status":"publish","type":"post","link":"https:\/\/microloannexus.com\/?p=33005","title":{"rendered":"Are we reaching a &#8216;tipping&#8217; point? You&#8217;re not imagining it. How businesses get you to tip more"},"content":{"rendered":"<div class=\"caas-body\">\n<p>When Darryl Tom ate at a brewery in suburban Chicago recently, he bought a couple of expensive bottles of barrel-aged beer, a sandwich to go, plus a beer while he waited. The bill came to $80 and the lowest suggested tip displayed on the restaurant&#8217;s iPad was 20%, or $16.<\/p>\n<p>The request felt egregious on multiple levels, said Tom, an attorney who knows his tipping etiquette. Not only was there little to no service but the amount was calculated on the <em>after-tax<\/em> total.<\/p>\n<p>Conventional etiquette doesn&#8217;t require a tip for takeout. But if the order is large, complicated, or brought to you curbside by staff, then a 10% gratuity is fine, experts say.\u00a0\u00a0And tipping is <em>always<\/em> off the <em>pre-tax <\/em>amount, generally 15% to 20% for sit-down meals.<\/p>\n<p>Tipping requests have exploded in the past couple of years. Everywhere you go, a\u00a0jar, a receipt, or a checkout screen displays a suggested amount, pressuring you to tip. Businesses often automatically ask for tips &#8212; even if it\u2019s not warranted &#8212; and include a &#8220;helpful&#8221; guide with different percentages to make the math easier.<\/p>\n<p>But buyer beware: those prompts could lead to overtipping, experts say.<\/p>\n<h2>How are businesses raking in more tips?<\/h2>\n<p>DoorDash warns customers now that if they don\u2019t include an upfront tip for their delivery drivers, they should expect longer waits for their orders. That change caused a ruckus on social media, with\u00a0some customers asking why they should tip before knowing if they\u2019ll get good service or if they should even be the ones bearing the brunt of paying wages for DoorDash.<\/p>\n<p>\u201cHistorically, tips were designed for services well performed,&#8221; said Rob Burnette, chief executive and investment adviser at financial planning firm Outlook Financial Center in Troy, Ohio.\u00a0&#8220;But it\u2019s morphed into an expectation by\u00a0servers not just to tip, but tip generously or they\u2019ll call you out.\u201d<\/p>\n<p>Other ways businesses are pulling in bigger tips:<\/p>\n<ul class=\"caas-list caas-list-bullet\">\n<li>\n<p>Calculating tips on the after-tax, instead of the pre-tax, total: Tipping should be pre-tax because tax rates vary from city to city, Burnette said.<\/p>\n<\/li>\n<li>\n<p>Calculating tips with fees, like a credit card processing fee, included.<\/p>\n<\/li>\n<li>\n<p>Calculating tips on\u00a0after-tax amount AND with fees included.<\/p>\n<\/li>\n<li>\n<p>Including a suggested tip guide based on after-tax, after-fee, and after an automatic gratuity has been added.<\/p>\n<\/li>\n<li>\n<p>Asking for tips when there\u2019s little to no service like at a coffee shop counter or when customers pick up a takeout order.<\/p>\n<\/li>\n<\/ul>\n<h2>Why are businesses asking for more tips?<\/h2>\n<p>After more than two years of high inflation, businesses are feeling squeezed and looking for ways to pass on expenses by charging credit card processing fees and requesting more tips for staff, experts say.<\/p>\n<h2>How does asking for more tips help businesses?<\/h2>\n<p>If workers earn bigger tips, then businesses may not have to pay higher wages.<\/p>\n<p>Servers, for example, are often paid less than minimum wage because of the expectation that their tips would push them to or above minimum wage. If they don\u2019t earn enough to\u00a0reach minimum wage, the law requires the business to make up the difference. More tips would mean\u00a0smaller or no disparity that the company needs to remedy.<\/p>\n<h2>What if places just paid their workers more?<\/h2>\n<p>Places like California, Minnesota, Washington, and Washington, D.C., require businesses to do just that, and\u00a0the city of Chicago\u00a0recently passed a measure to increase the minimum wage for tipped workers. <\/p>\n<p>\u201cTipped workers in states that eliminated the subminimum wage enjoy higher earnings, face less harassment on the job, and are less likely to live in poverty,\u201d according to Human Rights Watch, citing studies from The Economic Policy Institute, the\u00a0One Fair Wage\u00a0campaign, and\u00a0others.<\/p>\n<p>Others have argued that wages may have risen for those workers, but tips fell. \u201cPaying tipped workers higher wages decreases the tip percentages those workers receive,\u201d Michael Lynn, professor at the Cornell University School of Hotel Administration, wrote in a 2020 study.<\/p>\n<p>Consumers, however, might expect higher prices. Eighty percent of the 315 Chicago restaurant owners surveyed by the Illinois Restaurant Association in August said they\u2019d raise menu prices and 89% said they might introduce automatic service charges or fees to customer checks.<\/p>\n<figure class=\"caas-figure\">\n<div class=\"caas-figure-with-pb\" style=\"max-height: 640px\">\n<div><\/div>\n<\/div>\n<\/figure>\n<p><span class=\"exclude-from-newsgate\"><strong>Where are the big tippers? <\/strong>Tipping point: Best and worst states for tips<\/span><\/p>\n<h2>What\u2019s a customer to do?<\/h2>\n<p>Check your receipts, do your own math instead of relying on the &#8220;suggested tips&#8221; and know tipping etiquette.<\/p>\n<p>\u201cIt\u2019s a personal call if you want to tip a lot,&#8221; Burnett said. &#8220;If you got good service, take care of your server.\u201d\u00a0 <\/p>\n<p>Tom, the brewery customer in Chicago, left a tip. But he gave\u00a0a \u201c\u2019custom tip\u201d of $6, instead of the suggested $16.<\/p>\n<p><em>Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com\u00a0and subscribe to our free\u00a0Daily Money newsletter\u00a0for personal finance tips and business news every Monday through Friday.<\/em><\/p>\n<p><em>This article originally appeared on USA TODAY: Is tipping culture out of control? How &#8216;suggested tips&#8217; drain wallets<\/em><\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/money.yahoo.com\/reaching-tipping-point-youre-not-101012766.html\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>When Darryl Tom ate at a brewery in suburban Chicago recently, he bought a couple of expensive bottles of barrel-aged beer, a sandwich to go, plus a beer while he waited. The bill came to $80 and the lowest suggested tip displayed on the restaurant&#8217;s iPad was 20%, or $16. The request felt egregious on<\/p>\n","protected":false},"author":1,"featured_media":33006,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[32],"class_list":{"0":"post-33005","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-featured"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.12 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Are we reaching a &#039;tipping&#039; point? You&#039;re not imagining it. 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