When it comes to tipping at restaurants, are we heading back down to 15%?
morningstar.com -- Saturday, August 16, 2025, 10:27:13 AM Eastern Daylight Time
Categories: Economic Policy & Jobs, Public Opinion & Polling, Presidential Campaigns
New data show that customers are becoming less generous with their gratuities
Data from Toast shows that tipping at full-service restaurants has fallen to 19.1% on average. Just a few years ago it was nearly 20%.
Are Americans becoming tightwad tippers?
New data from Toast, a company that provides restaurant-payment systems, may suggest as much. In the second quarter of 2025, tip amounts at full-service restaurants fell to 19.1% on average, the lowest level since Toast began tracking it seven years ago. The figure had been as high as nearly 20% in 2021.
Restaurant-industry professionals indeed say they're seeing the shift.
"People got tipping-tired," said Izzy Kharasch, president of Hospitality Works, a Chicago-based restaurant consulting firm.
It's a point reflected in a new MarketWatch poll, conducted on X. Of the 900-plus people who responded, 40.7% said they tip 15% or less and 9.8% said they don't tip at all - in other words, more than half the respondents fell at or below the 15% mark.
Most industry professionals say it's no accident that tipping peaked around 2021, when restaurants and their employees were still battling to recover from COVID-related financial woes. As a result, there was greater appreciation for wait staff and the struggles they faced during the darkest days of the pandemic.
"Tips were out of whack because people wanted to take care of the industry," said Bob Vergidis, founder of Pointofsale.cloud, another provider of restaurant-payment systems.
But now that moment has passed. And diners are feeling frustrated for any number of reasons, say industry pros.
Begin with the fact that consumers are being asked to tip just about everywhere - those "tip screens" can be found at coffee shops, bagel places and the like. And as tipping proliferates, a certain fatigue sets in that carries over to full-service restaurants, even if they are establishments where gratuities have long been expected.
Additionally, menu prices have increased in recent years: The latest CPI data shows a 3.8% uptick in the "food away from home" category over the past 12 months. That's higher than the overall rate of inflation, which stood at 2.7%.
Industry pros say that when consumers have to pay more for their meal they often end up deciding to pay the server less as a way of equalizing the cost of dining out.
'I do think it's time to go back to 15% for good table service. ... We are past COVID when everyone was stepping up.'Reddit commenter
Plus, restaurants are sometimes charging various service or administrative fees, and also passing along fees charged to them by credit-card providers. That may additionally prompt customers to scale down their tipping.
Some observers also note there's been a pronounced decline in the quality of service in recent years - in part because restaurants have had to cut back on staff due to budgetary concerns. Naturally, when service declines, so does the amount that people tip.
On social media, you'll find no shortage of diners saying they're fed up with tipping - or at least tipping as much as 20%.
"I do think it's time to go back to 15% for good table service and bartenders," said one commenter on a Reddit post about the subject. "We are past COVID when everyone was stepping up."
On a more recent Reddit post, another diner said even 15% might be pushing it these days. "I've always been taught 15% is the minimum you should tip if the person did their job. But I can't help but feel like it's overdoing it sometimes," the person observed.
The situation has gotten so challenging for restaurant owners that one Georgia operator has imposed a mandatory gratuity of 18% to 20% at her establishments to ensure her servers are properly compensated.
"People got to get paid," said Teneshia Murray, owner of T's Brunch Bar, which has multiple locations in the metro Atlanta area, in an Instagram post.
As to why customers are so stingy of late, Murray told MarketWatch they're blaming inflation, but she's not buying it. "People use that as an excuse," she said.
If anything, some restaurant pros are worried the problems will only get worse because of the new "no tax on tips" provision in the One Big Beautiful Bill Act that was signed into law last month. The provision was something that President Donald Trump started calling for when he campaigned for office last year.
Customers may decide to tip less with the thinking that the server is benefiting from the new legislation. In effect, it's yet another justification diners can use when determining what constitutes a proper gratuity, industry insiders say.
TaxWatch: The truth about 'no tax on tips' is not every service worker gets a break. Here's what we know about who might make the list.
Not that every waitperson is seeing their tips go down, of course. Theresa Davis, a server at Her Majesty's Kitchen, a restaurant in Forsyth, Ga., that specializes in Southern Creole cuisine, said her tips have been holding steady at about 20% over the past year.
The key, she said, is treating customers with respect, such as recognizing them when they're there for a special occasion or offering them helpful menu advice. "You just have to understand the needs of the guests," Davis said.
-Charles Passy
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
Sign Our PetitionThe recent discussion surrounding tipping practices at restaurants highlights not only consumer behavior but also the broader socioeconomic context that shapes our dining experiences. New data reveals that the average tip at full-service restaurants has decreased to 19.1%, a notable drop from nearly 20% in 2021. This decline raises important questions about the evolving relationship between consumers and service workers, particularly in light of the historical context of the tipping culture in the United States, which has long been intertwined with issues of labor rights, economic justice, and social equity.
Historically, tipping in America emerged as a means of compensating service workers in an industry notorious for low wages. The federal minimum wage for tipped workers remains at just $2.13 per hour, a figure that has not changed since 1991, forcing many employees to rely heavily on gratuities to make ends meet. This system perpetuates income inequality, as tips can vary significantly based on the demographics of the clientele, geographical region, and even the type of establishment. As we examine the decline in tipping, it is essential to consider how economic pressures, exacerbated by inflation and rising living costs, influence consumer behavior and ultimately affect the livelihoods of workers in the hospitality sector.
The COVID-19 pandemic catalyzed a temporary surge in tipping, as patrons sought to express gratitude for the resilience and dedication of restaurant workers during a time of crisis. This phenomenon, however, appears to be waning as consumers exhibit "tipping fatigue." The rise of "tip screens" in various establishments, from coffee shops to fast-casual dining, has contributed to an over-saturation of requests for gratuity, leading to a backlash that could be interpreted as a pushback against the normalization of tipping in settings where it was once deemed unnecessary. This evolving landscape reflects a critical moment in the ongoing struggle for fair labor practices, as the expectation to tip becomes conflated with the erosion of service standards, a consequence of understaffing and budget cuts that many restaurants face today.
Moreover, the economic context cannot be overlooked. With the Consumer Price Index indicating a 3.8% increase in "food away from home" over the past year, diners are confronted with higher prices that may lead them to scale back on tips as a means of balancing their expenses. This behavior reveals a complex dynamic: as customers grapple with their own financial constraints, they inadvertently undermine the already precarious financial footing of service workers. The challenge here lies in fostering a culture that values and fairly compensates labor without placing the burden of that compensation on consumers, particularly in an economy where corporations frequently prioritize profit margins over employee welfare.
As advocates for economic justice and labor rights, it is crucial to emphasize that the decline in tipping is not merely a reflection of consumer stinginess but rather a symptom of deeper systemic issues within the restaurant industry. The imposition of service fees and increased administrative costs further complicates the tipping landscape, raising questions about transparency and accountability in how businesses operate. The focus should not solely be on individual tipping practices but rather on advocating for comprehensive reforms to the wage structure in the hospitality industry, including the elimination of the tipped minimum wage and the establishment of fair pay standards that ensure service workers can thrive without relying on gratuities.
In this context, the ongoing conversation around tipping can serve as a powerful entry point for broader discussions about economic equity, labor rights, and consumer responsibility. It is essential to educate ourselves and others about the historical roots of tipping, the impact of wage disparities, and the importance of advocating for a fairer economy that prioritizes the dignity of all workers. By engaging in these discussions, we can challenge the status quo and work towards a more just and equitable system that recognizes the value of labor and the importance of fair compensation.
In recent years, the practice of tipping at restaurants has come under scrutiny, particularly as data reveals a noticeable decline in average gratuity amounts. According to recent findings from Toast, average tips at full-service restaurants have dropped to 19.1%, the lowest level recorded since the company began tracking this data in 2018. This shift is not merely a reflection of individual behavior; it represents broader economic and societal trends that merit deeper examination. Understanding the interplay between tipping practices and larger structural issues—such as inflation, wage stagnation, and the ongoing impacts of the pandemic—can provide valuable insights for those seeking to engage in dialogue about labor rights and economic justice.
Historically, tipping has been a contentious topic, often rooted in systemic inequalities and labor exploitation. The United States is one of the few countries where tipping constitutes a significant portion of service workers' income, putting undue pressure on employees to rely on the generosity of customers for their livelihoods. With the federal minimum wage for tipped workers remaining stagnant at $2.13 per hour for over two decades, many restaurant employees are left vulnerable, forced to navigate the whims of patrons to make ends meet. The pandemic highlighted these disparities as consumers expressed heightened appreciation for service workers, leading to a temporary increase in tipping rates. However, as the immediate crisis recedes, many diners seem to be reverting to pre-pandemic behaviors, reflecting not only a sense of fatigue but also a reluctance to confront the systemic issues at play.
As Americans, we have the power to reshape the narrative around tipping and support the livelihoods of service workers. One potential avenue for action is advocating for fair wages for all workers in the restaurant industry. This could mean pushing for legislation that raises the minimum wage for tipped employees to a living wage, ensuring that workers are compensated fairly regardless of customer gratuity. Additionally, individuals can engage in conversations with friends and family about the importance of tipping adequately, particularly in light of rising costs and service expectations. Encouraging a culture of generosity and respect for service workers can help counteract the trend of "tipping fatigue" highlighted in the article.
Moreover, it's essential to address the underlying economic factors contributing to the decline in tipping. Rising menu prices, inflation, and additional fees charged by restaurants can distort customers' perceptions of what constitutes a fair tip. By discussing these issues openly—whether at community forums or social media platforms—individuals can raise awareness about the pressures faced by both workers and consumers. Engaging in local activism, such as supporting businesses that uphold fair labor practices or participating in campaigns that promote worker rights, can also foster a more equitable dining experience for all.
Finally, we should reflect on the broader implications of tipping and its relationship to societal values. The trend towards lower tips may reflect a growing sense of disconnection from the impact of our financial choices on the working class. By fostering a culture that values and respects the contributions of all workers, we can begin to dismantle the stigmas associated with tipping and recognize it as an essential aspect of a fair service economy. Engaging with right-leaning individuals on these topics requires empathy and understanding; rather than merely criticizing their behaviors, we can frame discussions around tipping as opportunities to advocate for structural changes that support a fairer economy for everyone. Through education, activism, and thoughtful dialogue, we can work towards a future where service workers are respected and compensated fairly, regardless of the whims of patrons.
Here’s a detailed list of actions we can take to address the issue of tipping in restaurants, based on the insights provided in the article.
### What Can We Personally Do About This?
1. **Educate Ourselves and Others**: Understanding the broader economic context surrounding tipping, including the impacts of inflation, service fees, and the challenges faced by restaurant workers, can help shape our approach to tipping.
2. **Advocate for Fair Wages**: Support initiatives that promote fair wages for restaurant staff, reducing their reliance on tips.
3. **Engage in Conversations**: Talk to friends and family about the importance of tipping fairly and the implications of tipping habits on workers' livelihoods.
4. **Support Legislation**: Advocate for policies that improve working conditions and wages in the restaurant industry.
### Exact Actions We Can Take
1. **Petitions**: - **Support Fair Wages for Restaurant Workers**: Find or create a petition advocating for raising the minimum wage for restaurant workers to a living wage. Websites like Change.org often host relevant petitions. Example: [Raise the Wage Act](https://www.congress.gov/bill/117th-congress/house-bill/603) – support this federal legislation.
2. **Contact Local Representatives**: - **Write to Your Local Legislators**: Urge them to support bills that ensure fair wages for restaurant workers. You can find your local representatives through [GovTrack.us](https://www.govtrack.us/) by entering your zip code. - **Example Contacts**: - **Rep. Alexandria Ocasio-Cortez** (NY-14): - Email: [AOC's Contact Page](https://ocasiocortez.house.gov/contact) - Mailing Address: 1236 Longworth House Office Building, Washington, DC 20515 - **Sen. Bernie Sanders** (VT): - Email: [Bernie's Contact Page](https://www.sanders.senate.gov/contact/) - Mailing Address: 332 Dirksen Senate Office Building, Washington, DC 20510
3. **Engage with Local Businesses**: - **Shop Local**: Frequent restaurants that pay their workers fair wages and do not rely heavily on tipping. Let them know you appreciate their practices.
4. **Participate in Awareness Campaigns**: - **Join or Create Campaigns**: Partner with local organizations focused on labor rights and restaurant worker advocacy, such as the Restaurant Opportunities Centers United (ROC United). Their website offers tools for activism and further education on the topic.
5. **Social Media Advocacy**: - **Use Your Platforms**: Share information on social media about the importance of tipping fairly and elevating the conversation around fair wages in the restaurant industry. Tag local businesses and encourage others to share their experiences and practices.
6. **Write Letters to the Editor**: - **Local Newspapers**: Write to your local newspaper advocating for fair tipping practices and better wages for restaurant workers. Example message: - "As customers, we must recognize the hard work of restaurant staff and ensure our tipping reflects their efforts. It's time we advocate for fair wages and stand against the culture of under-tipping."
### What to Say
- **In Petitions and Letters**: - "I support fair wages for restaurant workers and believe that reliance on tips should not determine their livelihoods. I urge you to support legislation that raises the minimum wage for workers in the service industry." - **Conversations with Friends**: - "Did you know that many restaurant workers rely on tips to make ends meet? It’s important that we tip fairly, especially in light of rising costs and inflation."
By taking action in these meaningful ways, we can contribute to a culture that values workers and ensures they receive fair compensation for their hard work, regardless of tipping norms.