Newly-released data shows that many Canadians have noticed what is being referred to as ‘tip inflation’. The rising trend refers to tipping at places you never have before and an increase in the tip percentages that are suggested.
Associate professor Simon Pek of the University of Victoria’s Gustavson School of Business says the tipping culture has been largely impacted by the pandemic and the ongoing labour shortage.
“In light of the pandemic, people were at that point looking for ways to give back to workers who are performing essential work,” said Pek.
“The second trend is that businesses are increasingly in a crunch trying to find workers and tipping for many businesses is quite an attractive way of recruiting talent in a way that they don’t necessarily have to pay for because they can offload that additional compensation on to consumers.”
He went on to say that new technology has made it easy for businesses to add a tipping option.
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“Payment platforms have made it really easy for businesses, almost at the flick of a switch to start requesting tips for transactions when they typically weren’t requested in the past,” said Pek.
A recent poll from the Angus Reid Institute found that B.C., residents were the most likely to report this rising trend, and four in five Canadians believe too many places are asking for a tip.
A majority, 62 per cent, of Canadians report being asked to tip more when dining out and the number of people tipping 20 per cent or over has more than doubled since 2016, according to the poll.
“The fact that people are being prompted to tip so much more in these different contexts is actually starting to lead to a big backlash. If anything, I think we’re in an exciting moment right now for those who are looking for more sustainable compensation models because more Canadians are looking for an alternative right now.”
Global News asked Penticton residents their thoughts on tipflation.
“I think the tipping is getting pretty high. I don’t mind tipping if it’s good service but I hate that it’s to be made like you have to even if it’s bad service,” said Karen Madsen.
“When I go buy a bottle of wine there is tipping option. I mean they usually take it off, but I wouldn’t expect to have to tip to buy a bottle of wine.”
“I actually like tipping,” said Amanda Taylor. “I think it is good for people should be earning a living wage and it’s nice to give people little boost with giving them a nice tip. Normally people give pretty good service.”
Meanwhile, Pek says tipflation could have a negative impact on businesses and workers as well.
“Discrimination in terms of how much people will receive and tips based not on factors related to their job performance, unevenness in compensation, a broader societal trend where employers are trying to push away some responsibility for their workers onto consumers. And also within businesses, it can lead to competition among workers and a lot of tension in some cases,” said Pek.
“The fact that the majority of Canadians are looking for an alternative should be a wakeup call for governments and businesses to actively look for alternatives and help facilitate this transition if that’s what Canadians want.”
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