Most Americans are familiar with inflation and wage stagnation cutting into their household budgets. But another kind of inflation - so-called "tipflation" - is sparking a new debate when it comes to both spending money as consumers and earning money as tipped laborers.
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A recent Wall Street Journal article noted that even at self-checkouts, where customers ring themselves up, pay, and bag their goods without ever interacting with an employee, an on-screen prompt to tip can still pop up - making customers feel like they're being "emotionally blackmailed."
MORE: What is tipflation? When to tip and when to skip
"They're cutting labor costs by doing self-checkout. So what's the point of asking for a tip? And where is it going?" Ishita Jamar, a senior at American University in Washington, D.C., told the Wall Street Journal.
Transactions where an employee is present but seemingly does little to assist a customer brings with it even higher pressure to tip - especially with the screen visible to the employee and anyone else nearby. According to a 2022 survey by gambling industry news site PlayUSA, "more than 1 in 2 (51%) had given a few extra bucks when an iPad asked them to, and 54% feel pressured to tip when the employee turns the iPad away."
Although tipping screens predate the COVID-19 pandemic, experts have noted the "acceleration" of such prompts in its aftermath. William Michael Lynn, Cornell University professor of consumer behavior, told the Associated Press that consumers became more generous with tips during the pandemic to show their support for affected businesses and employees, with genuine feelings of sympathy for those who worked jobs with a higher risk of contracting the virus.
The near-ubiquitous adoption of digital payment systems has also made it easy for any kind of business to add a tip request screen during checkout. 45% of respondents to the PlayUSA survey said they "feel like they've been tipping more over the past few years because more businesses are asking during checkout."
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These businesses "are taking advantage of an opportunity," said Lynn. "Who wouldn't want to get extra money at very little cost if you could?"
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And new - and unexpected - businesses clearly agree. The "Two Guys Take on Real Estate" TikTok account caused an uproar at their suggestion that tenants should tip their landlords. Employees of the Apple store in Towson, Maryland, the first Apple store to unionize, has requested tip solicitation as part of its agreement with the company. ABC7's 7 On Your Side investigated Hopper, a Canada-based travel booking app, which automatically adds a tip during checkout - which the customer can opt out of by clicking a toggle button.
But as 7 On Your Side's Michael Finney's report points out, where the tips go with these new requests can be murky. In an email to Finney, Hopper said: "This tip goes to Hopper and is completely optional. Customers have the ability to opt-in or out."
VIDEO: Travel app Hopper automatically adds tip to checkout, but where does the money go?
Hopper app automatically adds tip to checkout. Who gets the money?
Finney's story informally polled viewers on who consumers would be happy to tip, with most respondents saying they'd prefer tips go right to the workers. And in the state of California, that's the law. The California Department of Industrial Relations website cites Labor Code Section 351, which "prohibits employers and their agents from sharing in or keeping any portion of a gratuity left for or given to one or more employees by a patron." According to the law, a tip is "money a customer leaves for an employee over the amount due for the goods sold or services rendered."
When the customer is the one bagging their "goods sold" or rendering their own services, it can be frustrating to see an onscreen prompt to leave a tip. Still, it is ultimately up to the customer to decide whether or not to tap "No tip" - which is a lot easier when standing alone at a self-checkout stand.
Take a look at more stories and videos by Michael Finney and 7 On Your Side.
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