Recent news headlines tell us that consumers are feeling overburdened and confused about tipping. So, how did we get here? During COVID, we didn’t have a traditional atmosphere in which to tip. So, we started tipping everybody just for showing up to work. And not just a buck here and there. We were over-tipping—for take-out orders, for food delivery, and tipping for services we never had before, like grocery shopping.
At the time, we really did appreciate it. But now the novelty has worn off and we’re all feeling a little frustrated. Wages are up and prices are up, so swallowing a 20-30% tip for very little service, whether ordering online or in a fast casual environment, is getting harder. And consumers are pushing back. I’m here to offer some advice to the coffeeshops and other limited-service restaurants out there.
The tipping controversy exists largely within fast casual restaurants, with the fancy flip-screen Point of Sale Systems and pre-set tip amounts. Tipping has always been a thing at coffeeshops, but Starbucks’ move to suggest a tip on the screen has caused outrage. It was never a customary percentage like full service’s 15-20%—the change on the dollar or a couple bucks for a larger order would suffice. But now? I was at a bagel shop last week, with counter service and a flip screen POS. The suggested tip left to right was 30%, 25%, and 20%. To toss a dozen bagels in a bag. Sure, some guests are getting sandwiches made to order, but still—20-30% for no table service? They’re not bringing out the food, offering another drink, or even bussing the table.
As a consumer, I was offended. And that’s the point here. It feels dishonest. Like the owners are assuming guests won’t notice and they’ll just hit the first button they see. As restaurant owners, the last thing we want to do is offend our customers. RIGHT? If your mission is customer loyalty, like mine was for my coffeeshops, you must apply The Golden Rule. How would you want to be treated?
I had a client last year who added a 3% service fee to every order to help pay for healthcare for their employees. They were very transparent about it. I totally appreciated the sentiment and I’m sure a lot of their patrons did too. But I urged them to keep an eye on it. They swore their customers didn’t mind (of course no one said anything), but we then saw a double-digit sales decline. Your customers aren’t always explicit in their dissatisfaction. If they feel some kind of way about your new fees, they might just not come back. In fact, most customers when dissatisfied, just won’t come back. But that’s a topic for another day.
Building costs into your menu pricing is generally received better than tacking on fee after fee. It’s more straightforward and it feels more honest, whereas tacking on fees feels like a bait and switch. You hear stories all the time, especially with delivery platform orders. Try ordering one pizza for $20. Once you add the delivery fee, the service fee (whatever that’s for), tax and tip, it’s close to $35. That’s SEVENTY-FIVE PERCENT. It’s shocking. Fees for healthcare, for back of house staff, for credit cards—it doesn’t really matter—they add up and people will see it as disingenuous. (As an aside, I also don’t understand passing on the credit card fees. Why you would want to encourage cash and all the risks associated with it, never mind alienating customers?)
I believe in incentivizing good service. I believe in the model of hospitality that we have in this country. And if you’ve ever traveled abroad, you’ll know what I mean. When I was 20 years old, I moved to London for my third Drexel co-op. I took a taxi from Heathrow to a hotel in central London. I think I brought five suitcases with me. When the taxi driver dropped me off, he didn’t even offer to help me with the bags! Then I got to my room and realized there was no hairdryer. I called the front desk, and they required a 20-pound deposit before I could walk down and pick one up. These experiences were shocking. Immediately I was homesick for good service.
To all the coffeeshop and fast casual owners out there—please give your guests tip options that make sense. And why not be transparent about your tipping model? Feel free to share this or use it as your own:
We believe in providing our customers with the best service possible, while paying our staff a competitive wage. Therefore, we have adopted a tipping model. This model helps us to retain our staff as long as possible, and we know you appreciate seeing the same friendly faces every time you visit! To that end, a 10-15% tip for friendly service is customary and appreciated very much. If it any point you are dissatisfied with the service or your overall experience, please email me directly. Thank you for visiting and we hope to see you again soon!
Need help? I’m an email away: firstname.lastname@example.org