Saying it’s been a tough two years for the restaurant business is an understatement. Between shutdowns, supply chain issues and staffing shortages, restaurants have asked customers to help keep business alive and be patient.
That patience may be wearing thin, if the amount of tips people are leaving is any indication.
Data provided by Square and analyzed by Nexstar shows the percentage of tips at both quick-service and full-service restaurants has waned since peak pandemic. (Square is a digital payment company. When you pay for your meal or your coffee on an iPad or a smartphone, that’s often Square.)
The data shows the median tip percentage jumped between February 2020 and April 2020 from 19.73% to 22.22% at quick-service restaurants. Tipping generously on takeout orders was touted as a way to show appreciation for frontline workers during those early months of the pandemic.
Tips at full-service restaurants – at least the ones that were able to stay open – also rose from 19.45% to 21.2%.
Those bumps may seem minor, but even an extra few percentage points on every transaction adds up to bigger take-home tips for food service workers.
The graph below shows what has happened since peak pandemic: a pretty steady decline in the amount people are tipping, with one bump in December 2020 around the holidays.
People went from leaving a 22% tip on average at a quick-service restaurant in April 2020 to leaving an 18.6% tip in August 2021. Again, it may not seem like a lot, but that’s a 16.4% decrease.
Tips at full-service restaurants haven’t dropped as dramatically. They’re down about 10% since their peak. That being said, tips at full-service restaurants are now at a level lower than prior to the pandemic.
“None of that data surprises me at all,” said Joe Monastero, chief operating officer of the Texas Restaurant Association. “If you think about in the early days of the pandemic, restaurants that were open, even once we had restaurants reopening dining rooms [in Texas] in May 2020, we continued to see customers be extra generous and extra thoughtful.”
Monastero said he heard lots of patrons were tipping as much as 30% as a way to show appreciation for restaurant workers. Now, he believes most urban areas are seeing tips back down in the 20-22% range. Rural areas are a bit lower, around 18-20%, he estimated.
Square provided data through August 2021, but said the company “found that tipping patterns have remained largely stable since then.”
Monastero worried that diners are using diminished tips as a way to express dissatisfaction with restaurants that may be plagued with staffing shortages, supply chain issues and a higher cost of doing business.
“Our whole tipping system in the U.S. is supposed to be a reflection of the service you received from that restaurant. It’s not supposed to be the way in which you express dissatisfaction with the quality of the food, or the ambiance, or if you felt the host made you wait too long to be seated. It’s just the server’s performance.”
Monastero implored people to practice patience and grace when eating out. And if there are issues, “don’t dock the server and their wages, ask to speak to the manager instead.”
One silver lining of the tipping data: While people may be tipping smaller amounts than they used to, it appears they are tipping more often. Square provided Nexstar with data that shows how many people tip on all sorts of transactions – not just restaurants, but also bars, beauty salons, retail and other services. In March 2020, tips were left on about 54% of Square transactions. In August 2021, it was up to 67%.