TIPPING POINT
Published in the February 1, 2025 edition.
How much a person tips can say a lot about them – just ask your local bartender. But what does it mean when everybody starts tipping less?
Recently, the Wall Street Journal reported that Americans are tipping less at restaurants than at any time in the past six years, impacted by inflation and “tipflation,” a term describing rising gratuity expectations in places where tipping was once less common or even non-existent.
The average tip at full-service, sit-down restaurants has dropped to 19.3% this year, down from a peak of 19.9% in early 2021, according to data from POS (point-of-sale) system provider, Toast. Their analysis, covering approximately 127,000 restaurant locations nationally from June to September, revealed that overall tips averaged 18.8%.
Mammoth’s economy relies heavily on the hospitality industry, supported by dedicated service workers. So, to understand local tipping trends, The Sheet spoke with several local businesses.
At Stellar Brew, a coffee shop on Main Street, manager Nicky Lee noted a decline in gratuities from an average of 10% (typical for a quick-service operation) to about 8%.
She attributes this drop to “tipflation,” where digital payment prompts for tips appear at places like airport concessions and gas stations, where they’ve never existed before, leading to consumer fatigue in places where tipping is expected.
“When I do look at tips, I’ll see that it’s not as customary for people to leave something,” she said. “It used to be that people would leave something.”
Lee encourages her staff to stay positive, emphasizing that having a non-tipping customer is still better than none at all. “Don’t take it personal; it’s just the way the world is now,” she tells her crew.
“It sucks,” she said. “But it’s like, okay, how much can we really encourage our folks to ramp up the service [if there’s no attaboy/attagirl on the back end]?”
While tipping remains prevalent in sit-down dining and food delivery, a 2023 Pew Research survey showed that only a quarter of respondents would always tip for coffee.
But during the pandemic, take-out surged, leading to higher overall tips. Jamie Dudley, manager at Burgers, a sit-down restaurant by the Mammoth Village, said take-out used to bring in a lot of extra cash for his employees.
“I think during Covid-19, people were super appreciative that we were doing food,” he said. “So tips were up during Covid-19.”
Since then, though, take-out tips have dwindled significantly, a stark contrast from pandemic highs.
“We sold $900 in takeout yesterday and got $5 in takeout tips,” he said last Tuesday afternoon.
He explained that his staff relies on tips as a supplement to their hourly wages, and he’s frustrated with the decrease in tips. However, he said sit-down dining tips have remained stable, averaging around 20%.
Meanwhile, a server at Liberty Bar, a sports bar and casual restaurant, said her sit-down tips fluctuate from 14% to 18% of her weekly food and beverage sales, and that she’s heard of her co-workers making even less.
Locals, at least, tip much better than the tourists, she said with a laugh. She attributed her lower tip percentages to the restaurant’s laid-back atmosphere.
Nearby, at John’s Pizza, manager Hector, said the biggest problem they face is not the percentage of tips they receive, but that there’s been an overall decline in foot traffic.
“The years before [Covid-19] used to be way busier,” he said.
Nationally, restaurant visits dropped in 2024 compared to 2023, with many establishments facing unprecedented bankruptcy rates. Many restaurants accrued significant debt during the pandemic, and rising interest rates compounded these financial pressures, leading consumers to dine out less frequently.
According to a Bloomberg report, the average American went out to eat 216 times in 2000, but that number fell to 185 by 2018.
And this year, grocery prices in December were roughly 28% higher than they were five years ago, meaning Americans are pinching their pennies just to cook at home.
It’s not just Americans, either; inflation is a world-wide phenomenon right now. U.K. food prices rose 17.4% in the year through June, while Japanese prices were up 8.9% and French prices were up 14.3%, according to a Wall Street Journal Report.
In each country, food prices are rising much more quickly than prices of other goods and services.
But why is tipping such a big deal in America in the first place?
Well, it dates back to the 1850s and 1860s, when affluent Americans adopted the tipping tradition they encountered during trips to Europe, according to Times Magazine. Initially, most diners saw the practice as classist, and the anti-tipping sentiment became so strong that it eventually spread to Europe in the 1860s, which is part of why tips aren’t expected in European restaurants today.
But in the U.S., after slavery was abolished, many freed individuals found work in low-paying jobs such as servants and waiters, where employers relied on customers to provide tips instead of paying their wages outright.
The legacy of restaurant pay-plus-tips approach has become a mainstay of American culture.
Today, the federal minimum wage is $7.25, but sits at $2.13 for tipped workers, according to the Department of Labor. California is one of just seven states which requires employers to pay tipped employees the state’s minimum wage, $16.50, plus any tips they earn.
This policy has yet to catch on nationwide. But perhaps consequently, California residents also exhibited the lowest tipping rates in the country for restaurants overall, averaging 1.5 percentage points less than the national average, according to Toast data stats.
Ultimately, as the future of tipping in America remains uncertain, it could indicate how people navigate rising costs and prioritize their dollars – perhaps they deem dining out too expensive and tipping practices are simply the litmus test for America’s spending habits.
Regardless of the outcome, for the time being, it is still customary to tip service workers in the United States. Take care of your local baristas, bartenders and servers.
