Consumers Are Fed Up and Tipping Less. Are You?
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Here's your Money Briefing for Wednesday, April 30th. I'm Jana Herron for The Wall Street Journal.

Many Americans feel like tipping has gotten out of control and they're doing something about it. A lot of others are also really looking at service and was it good or not? Did they get refills of their drinks? Did they feel like the wine was overpriced or were they asked to give gratuities in other ways? And then they're going to subtract that from the tip.

Wall Street Journal readers shared the many different ways they're trying to protect their wallets when dining out. We'll talk with reporter Heather Haddon about some of their tipping strategies after the break. Data is everywhere. When orchestrated properly, it sings. At Morningstar, we analyze and enrich data, making it actionable and powerful for you. Morningstar, where data speaks.

With so many requests for gratuities these days, it's not surprising many people are trying different ways to reduce how often and how much they tip. More than a thousand readers shared their strategies with WSJ reporter Heather Haddon, who joins me today.

Heather, you've been following our tipping behavior for quite some time and have gotten a huge response from readers. Why do you think this resonates so much? Yeah, I think this resonates because people are being asked to tip all the time now. I mean, you see all those digital screens, those iPads that get flipped around to you for buying a water at the airport or whatever. And it's just in our faces so much more that I think people think about it more. Traditionally, it was just,

tipping at a sit-down restaurant, but now it's at fast food, picking up food to go. It's at every seemingly trivial transaction you're being asked to tip. So I think people just are thinking about it so much more than they used to. I can also imagine when it's digital like that, it's more in your face. Like I do remember a lot of tipping jars that you see like maybe at the ice cream store and stuff, but that didn't seem as intrusive.

What is fun in your latest article is the quiz that tells you whether you're an under-tipper, over-tipper, or normal-tipper, based on how other readers answered those questions. How did you come up with those particular questions? Just in terms of what people were telling us were different scenarios. So you're asked to tip when you're just getting a simple black coffee or when you're actually getting, you know, maybe a latte and a muffin or...

or at a restaurant where it's good service or you feel like the service really just isn't that great or there's other fees on the bill. Those are some of the things that readers told us really factor into whether they're going to give a 20% tip or not.

And for the record, I came in as a normal tipper. But the question that struck me the most, again, was those charges that like the extra credit card charge. And at the time that I took the quiz, 20% of people said they would leave no tip if they had a credit card charge. Can you talk a little bit more about those extra charges that people are running into and why they seem to make people so mad?

People don't want to be part of a restaurant's business model. One person I interviewed just said, I just want a tip and I don't want to think about like,

the workers fee or the credit card fee or other service charges, which show where there's holes in a restaurant's business model and they can't quite make it work. It's just more math for people to do. And some of the customers we talked to, you know, start to subtract out those fees from the tip. It just gets really complicated and they want to just pay the tip and be done with it. In your article, which is linked in the

In the show notes, you talk to readers about how they're managing this out-of-control tipping. What are some of the tactics they shared with you? Doing that math, getting their calculator out on their phones and taking out some of those service charges. A lot of others are also really looking at service and was it good or not? Did they get refills of their drinks? Did they feel like the wine was overpriced or were they asked to give...

gratuities in other ways, and then they're going to subtract that from the tip. Others are paying in cash, either the tip or the whole bill, because they feel like they can get around that credit card charge by doing that, or they feel like it's a more direct way to pay the service staff by doing that. And that feels better to them, feels more direct and more personal than just putting it on the bill and putting it on the credit card and assuming that's going to go

to that server. It seems that we've kind of been through an entire life cycle for tipping where during the pandemic, we were really generous and now we're getting somewhat miserly.

At the moment, the economy is starting to feel a little wobbly. How do you expect that to affect our eating out behavior overall, including tipping? With the economy taking the turn it is, projections of analysts for the restaurant industry show that they expect traffic to decline. So already traffic last year was declining and they expect it to decline further.

And did you speak to any readers who are telling you, yep, I have cut back on going out because of what's going on? Oh, absolutely. Readers tell us all the time that they're cutting back on dining out. They...

really want the money to matter and a lot more of them are cooking at home or just reducing their frequency because again restaurant prices are up they haven't come down since all that inflation and people see it. So Heather when I go out to eat with my husband he definitely gives me the little screen to go and figure out the tip and I always find that to be very weird because the server's right there people can see oh what percentage I'm choosing and

Did you speak with anybody who talked about

tipping etiquette and how to deal with that awkwardness? Some of the readers we talked to just said that they just throw it right back to the server. If they don't like the experience or they feel like it wasn't worth 20%, they're just going to be courageous not pay that 20%. And again, I would say that's more in retail situations and less in restaurants. It's more where some trivial interaction and they just don't feel like it's worth it. But another way to get around that is say, I'm going to pay the tip in cash. Just do it later. Yeah.

That's WSJ reporter Heather Haddon. And that's it for your Money Briefing. This episode was produced by Ariana Asparu with supervising producer Melanie Roy. I'm Jana Herron for The Wall Street Journal. Thanks for listening. Data is everywhere, but is it ready for consumption? Morningstar developed the language of global investment data so you have the right ingredients to help you shine.

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