Businesses Notice Post-Pandemic ‘Tip-Fatigue’ in Customers

Customers have been tipping less generously as pandemic restrictions relax.

Customers have been tipping less generously as pandemic restrictions relax.

At the height of the COVID-19 pandemic, when many people where still living in lockdown, many small businesses, especially restaurants, noticed that customers were tipping more generously than usual. The common sentiment at the time was that restaurant staff and delivery workers who were still working at an uncertain time deserved the additional compensation. However, as pandemic restrictions have relaxed and life has returned to some semblance of normalcy, that generosity has dried up.

According to a report from restaurant payment company Toast, restaurant tips, particularly on delivery orders, are down to roughly 14.5% on average. Square, another payment company, noted similar statistics in its tipping studies according to a Wall Street Journal report.

“Part of it is tip fatigue,” Eric Plam, founder and CEO of San Francisco-based startup Uptip, told CNBC.

“During COVID, everyone was shell shocked and feeling generous,” Plam said. Now, “you are starting to see people pull back a little bit.” Plam noted that point-of-sale tipping, where customers tip ahead of actually receiving their purchase, has become a major sticking point.

“This point-of-sale tipping is what people resist the most,” he said, “compelling you to tip right there on the spot.”

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