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Is 25% the new 20%?  What a tip in a post-pandemic world

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Is 25% the new 20%? What a tip in a post-pandemic world

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Tipping got better during the Covid pandemic at Sugapeach Chicken & Fish Fry in North Liberty Iowa.

Courtesy: Chad Simmons

At Sugapeach Chicken & Fish Fry, a fast-casual restaurant in North Liberty, Iowa, customers are feeling much more generous since the pandemic put pressure on the restaurant industry.

People used to tip 10 to 15 percent for meals ordered and picked up at the counter, said Chad Simmons, co-owner of Sugapeach. “Now we get between 20% and 25%.”

Still, finding enough staff to run the restaurant remains a challenge, he said.

As the economy recovers, workers are reluctant to return to service jobs that offer few benefits and low wages, leading to a severe shortage of fast food workers, kitchen staff and drivers- couriers, even if consumers appreciate these services more than ever.

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“Tipping is the icing on the cake, but they really want more cake,” Simmons said.

Before Covid, tipping a few dollars, if at all, was the norm for bartenders, baristas or “back-of-house” employees.

But with the pandemic came the widespread adoption of contactless and digital payment methods like Block, formerly known as Square, which invites you to tip when you pay.

In most cases, there are predetermined options ranging from 15% to 25% for each transaction, even if it is only a takeaway coffee or a self-service snack, while a 20% tip in a sit-down restaurant is still the norm.

However, not everyone agrees with service providers tipping more generously in all areas.

“A lot of people seem to hate being asked to tip for things that don’t always warrant a tip, like pouring a coffee or handing over a bag of takeout, especially when the employee is just standing there and can see what you have entered. said Ted Rossman, senior industry analyst at CreditCards.com.

In a recent CreditCards.com survey, only 17% of people who choose takeout said they always tip, while 19% tip most of the time, 31% tip sometimes, and 34% never tip.

Even though many Americans said they would tip more than usual once business resumed, according to an earlier 2020 poll, drinking habits ultimately didn’t change much, Rossman added.

Tipping is absolutely essential.

Eric Plam

founder and CEO of Uptip

“People in the service industry earn minimum wage or less than minimum wage, tips are absolutely essential” said Eric Plam, founder and San Francisco-based startup Uptip, which aims to make cashless tipping easier. “It’s an essential part of their compensation.”

Certainly, the pandemic has brought a new awareness to the country’s hourly workforce and its wages.

Yet the federal minimum wage has been stuck at $7.25 an hour since 2009.

Many small employers, from bakeries to pizzerias, take it upon themselves to raise wages for hourly workers to attract and retain staff. Simmons said he not only raised wages, but offered more flexible hours to entice high school students to seek employment after school.

Last year marked the first time the average wage for restaurant and supermarket workers exceeded $15 an hour, according to the US Bureau of Labor Statistics. Wages and salaries rose 4.2% for the 12 months ended September 2021, according to the BLS.

Anti-poverty advocates have been calling for higher wages for years, citing inflation and the cost of basic needs. It’s a more pressing problem looking ahead to 2022: Inflation jumped 7% in December, the fastest rate since 1982.

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Is 25% the new 20%? What a tip in a post-pandemic world

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