Here's a Tip: Don't Ban Tipping

Most Americans don’t want to give up tipping their servers, but millennials tend to be more open to the idea, according to a new study from Horizon Media, a New York-based media services agency. Some restaurants have begun eliminating tips in favor of paying servers a higher wage. Joe’s Crab Shack was the first national chain to implement a no-tipping policy last year while boosting servers’ starting wages to $14 an hour. At least 18 New York restaurants have banned tips, including Fedora in Manhattan and Roman’s in Brooklyn, according to Crain’s New York Business.

According to Horizon Media’s Finger on the Pulse Survey, 81 percent of adult restaurant-goers don’t like the no-tip policy. “For over half of these restaurant-goers, the main drawbacks of built-in tipping come down to expected effects on service,” a Horizon Media press release states. “Fifty-five percent say they would be forced to pay the same amount no matter how good or bad service is, and 52% say it should be up to them to decide how much to pay for service.”

But some millennials and members of Generation Z see it differently. Twenty-nine percent of restaurant customers age 18-34 say tipping is an outdated and unfair practice (compared to 18 percent of those age 35-49 and 13 percent of people age 50-64). Only 44 percent of customers age 18-34 oppose tips being built into an item price versus roughly 60 percent of the older crowd.

“There are real economic and life stage realities at play for the younger crowd,” said Kirk Olson,vice president, TrendSights, at Horizon Media. “Many millennials still face underemployment, and Gen Z-ers who’ve begun working are often working service jobs dependent on tips. Considering the rising popularity of Bernie Sanders’ ‘living wage’ stance among the same group, it makes perfect sense that they show greater interest in seeing tipping evolve.”