You're Probably Not Tipping Enough, Thanks To Inflation In Canada

As Canadians face the brisk headwinds of inflation, the customary act of tipping has evolved from a simple gesture of gratitude to a complex social expectation, dictated by glowing screens and percentage options.

Personal finance app Hardbacon has released the results of a new survey that suggests when it comes to tipping, Canadians may be unwittingly subscribing to a new standard set by technology and economic pressures, rather than their own volition.

Gratuity vs. guilt

According to the survey, 65% of Canadians have felt the nudge from payment terminals, prompting them to tip even when they might not have otherwise. Some, it seems, are being guilt-tripped by technology.

Meanwhile, 62% of patrons are parting with more dollars than they had planned, coaxed by pre-set tipping options that often start at 15% and climb from there. Cash payments rarely see such generosity.

A significant portion of feedback on the survey highlights a particular thorn in the side of customers: the practice of calculating tips on the total amount post-tax, which amplifies the final figure.

"The results show that merchants' tactics to encourage consumers to tip more work, but they risk alienating their clientele in a context where we are all trying to adjust our budget to inflation," said Julien Brault, CEO of Hardbacon.

New tipping etiquette

Despite the gentle prodding of payment terminals, the shift to a 20% tipping norm has not yet materialized in Canada. The survey found that the average gratuity at table-service restaurants hovers around 15%.

And while the Canadian spirit of generosity is alive and well, with nearly all patrons tipping their servers, the consensus fractures when it comes to other services. A full quarter of respondents confess to withholding tips from their Uber drivers.

At sit-down restaurants, the average tips by age group showcase Gen Z adults leading the charge with 16.58%, suggesting a generational shift towards more liberal tipping habits. On the flip side, the post-war generation (79+) seems to hold their tips a bit closer to their chest, averaging at 13.85%. Millennials and Gen X are caught somewhere in the middle, averaging 14.77% and 15.05% respectively.

The generational divide extends beyond age groups into the concept of tipping itself. There are the tipping traditionalists who staunchly believe in tipping as a reward for exceptional service, standing in stark contrast to modern-day skeptics who question the whole institution.

"The tip should be a flat rate and not based on the bill total. Why should someone who ordered a steak be expected to pay a higher tip than someone who got a sandwich? It's the kitchen that did more work, not the server," wrote one survey respondent.

"Service establishments are directly outsourcing staff salaries to the customers and then shaming the customers for not paying enough," commented another.

Tipping the scales

As people navigate these penny-pinching times, tipping in Canada seems less about custom and more about circumstance. Still, faced with the peer pressure of digital prompts or the expectant eyes of service workers, tipping shouldn't be an afterthought.

Service staff in Canada often rely on tips to supplement their income. While there's a broader conversation to be had about fair wages in the service industry, the reality is that today, tipping remains a crucial part of their earnings.

So, when you're calculating the cost of a meal or a ride on a night out, factor in the tip as well. It reflects gratitude for the service received as well as recognition of the economic reality that many service workers face.