In Germany, tipping has a centuries-old tradition. It appeared on bills as early as the 14th century and has sparked debate ever since: Can remuneration consist solely of tips? Shouldn’t a sufficient minimum wage make the idea itself obsolete? Which sectors are actually allowed to demand it? Or more recently: How much tip is actually appropriate?
This discussion was triggered in the USA. It has always been said that a tip of 15 to 20 percent is completely sufficient here. But the reality looked different recently. The Americans had already been very generous during the corona pandemic. Data from financial apps show that tips in New York, for example, rose from an average of 19 percent to a full 25 percent.
The pandemic passed, but tips continued to rise. There is already a word for the phenomenon: “Tipflation” is a neologism from “tip” for tips and “inflation”. On payment terminals in restaurants, 22, 25 or 30 percent is increasingly being suggested as a possible tip. Many customers are increasingly annoyed by this, but restaurateurs and payment service providers have largely ignored the discontent so far. And the service workers should also be happy with the development: for tipped jobs in the USA, there is a minimum wage of just $2.13 per hour, which is far below the normal minimum wage of $7.25. And even that cannot keep up with the rapidly rising cost of living.
And in Germany? The amount of appropriate tips is already being discussed. The majority of Germans have nothing against tipping per se, on the contrary: in a study by the market research company Yougov, 78 percent of those surveyed said that they usually pay tips in restaurants. This puts them in first place worldwide. The USA came in just behind with 77 percent. An important difference: In Germany, service staff are not dependent on tips, it is simply a bonus.
Nevertheless, it is often required indirectly, for example through long rummaging for change when paying in cash – or increasingly through the default settings of the payment terminals that are becoming increasingly common. For example, the devices of the popular provider Sumup are set to tip options of ten, 15 and 20 percent by default for payments of 10 euros or more. The average in Germany has so far been between five and ten percent.
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One might have assumed that the increased payment by card would actually lead to a decrease in tips. But the opposite is true: According to a Forbes study, customers who pay by card tip around 15 percent more than those who pay with cash. In addition, there are the psychological effects of the payment terminals: Studies suggest that the given tipping options put customers under pressure to accept one of the given options. After all, the waitress is usually right next to it.
Declining a tip or manually entering your own amount only works, if at all, using smaller buttons that customers first have to find. There is already a term for this in the USA: “Guilt Tipping”. So people no longer tip just for good service, but also because otherwise they would have a guilty conscience.
This article first appeared on Capital.
