Last week I left a $30 tip on a $140 facial. I thought it was generous—an extra $15 for each hour the aesthetician worked—but she seemed unimpressed. I left the salon with glowing skin but a tight feeling in my chest, leading me to wonder: Am I a lousy tipper?
Driving the news: The feeling isn't exclusive to me. More than half of Canadians would prefer to eliminate the mental math and social pressures of tipping and shift to a "service included" model that would mean higher prices, but a livable wage for service industry employees.
- It isn't just customers who want a change—58% of Canadians who work or have worked in a tipping environment also support a shift towards a service-included model.
- And 73% of Canadians polled believe that tipping allows employers to pay workers less, putting pressure on customers to pump up earnings to a livable wage.
Yes, but: A service-included or “hospitality-included” model has its downsides, mainly that restaurants operate under razor-thin margins, so forcing all establishments to absorb the cost of higher wages, even if they raise menu prices, could put smaller, less busy spots like your favourite mom and pop diner out of business.
Why it's happening: The "standard" amount for a tip rose quickly during the pandemic from ~15% to a wide range of 18% to 30% as people wanted to show their appreciation for frontline workers.
More businesses also adopted cashless point-of-sale systems, which automatically present customers with a set of tipping options when they pay.
- The number of businesses asking for tips has also grown. Consumers are being asked to tip fast food workers, auto mechanics and cashiers.
Why it matters: It's debatable whether it should be on customers to bridge the gap between what service industry workers earn and a livable wage—but we’re being asked to do it nonetheless, a phenomenon called "guilt tipping."
- The expectation of larger tips could have the opposite intended effect and drive customers away—42% of Canadians say the increased cost of tipping keeps them from going out.
Bottom line: Canadians seem fine with paying a higher price to guarantee the person taking care of them is earning enough to support themselves and restore tipping to what it was initially intended for—recognition for outstanding work, not a pity-induced obligation.