Tipflation: How to Manage Tipping Pressures & Save Money

Tipping requests are appearing in more places than ever—a trend known as “tipflation.” According to a recent study by the Angus Reid Institute, Canadians report being asked to tip more (62%) and more often (64%) on almost any service.1 Beyond traditional sit-down restaurants, tipping is now expected at coffee shops, takeout counters, and even self-service kiosks.

You are not alone if you feel overwhelmed by the pressure to tip. Let’s examine tipflation, explain why it’s happening, and find ways to practically manage your budget when thanking service workers for their efforts.

What is Tipflation and Why is It Happening?

The increase in tip expectations only continues to expand. More businesses have started to request tips, even in places that traditionally did not include service-based pay.

How come? Part of the reason is the transition to digital payment systems. That has made it easy for companies or stores to add tipping options, even at self-service spots. Digital payment screens can prompt customers to tip with pre-programmed options, which feel extreme for small or casual transactions.

Others feel that tipping is a way to support employees—without giving them raises. In turn, this increase in demand for tips makes consumers overwhelmed. Social pressure or privilege can make it seem like you cannot deny the tipping request.

But all those little payments can add up. Without some care, you can overspend your budget.

9 Tips to Help You Manage Tipflation

To help you manage tipflation, here are nine money-saving tips:

1. Budget your tipping

The best way to avoid the financial burden of tipping is to make spending strategies. You can create a monthly budget that prepares for the expense. Consider how often you are eating out and set a realistic tip amount for each dinner. You will know what to anticipate—without the pressure of giving more than you would like.

By monitoring your tipping expenditure, you can also identify any overspending habits and make the necessary changes. If frequent tipping strains your wallet, it is time to scale back tip sizes and reserve tipping only for occasions that deserve it.

2. Calculate tips based on the pre-tax total

Most people calculate the tip on the total amount after tax, which can add up. To save your cash while still respecting the service given, base your tip calculation on the pre-tax amount. This will save you money in the long run, especially if you eat out a lot.

3. Enter the tip amount manually

Digital pay systems can make you feel obligated to tip at a particular percentage. These presets are often higher than necessary, especially at locations with counter service or takeaway orders. Try to use a custom tip feature to type in the amount that feels appropriate to you. If you normally give 10% for takeout, do not hesitate to type that amount in.

With a custom and personal tip percentage, you can still tip for quality work while controlling how much you spend.

4. Stop tipping at self-service kiosks

Tipflation has made tip requests pop up in places where you wouldn’t have much interaction with a server or receive any direct service (e.g. self-service kiosks or quick-service coffee shops). If you have not received a service above the minimum, don’t feel obligated to leave a tip. Tipping reflects the level of service, so if you are merely there for a pick-up order or drive to the store itself, skip the tip if you so choose.

5. Practice saying “No, thank you”

Social pressure sometimes makes it difficult when a tip option comes up—especially when a cashier or server is nearby. Still, a polite “No, thank you,” will help you keep on track with your financial goals if you really don’t feel the tip is deserved. Keep in mind that tipping is always a choice, and always at your discretion. A kind response can reduce the stress of these moments and help you stay true to your budget.

6. Tip with cash

Weirdly enough, in a world where digital payments are at large, cash is quite effective for tips. A few small bills in your wallet let you decide exactly how much you’d like to leave. This approach lets you control the tip amount without relying on pre-set percentages.

Besides, cash tips are direct and may even be more welcomed by service personnel, who sometimes have to wait weeks before the electronic tips remit. Cash also keeps you within budget because you can see exactly how much you have spent.

7. Tip according to the quality of service

While tipflation may have changed the nature of tipping culture, you can still use the quality of service to determine how much you can tip. If the service was good, then a large tip is an ideal way to show appreciation. On the flip side, if the service is minimal or if you go to the self-service counter, adjust accordingly. Honest tipping reflects the service received.

8. Track paid tips with a budgeting app

Most budgeting and spending apps categorise expenses, including tips. That allows you to draw a clear picture of the amount that goes out each month. Apps also allow you to set monthly limits and receive alerts if you reach the maximum of your tipping budget. With time, this becomes a good habit for budget management and wise spending.

9. Remember that tipping is always optional

Lastly, remember that even in 2024, tipping is an optional choice. Perhaps the prevalence of tipflation has normalised over-tipping, but a tip should reflect both your satisfaction and your budget. It’s okay to decline a tip when it does not feel deserved or disrespects your financial boundaries.

A big part of good personal finance is taking responsibility for your tipping and keeping track of how much you’re spending. Tipping is an act of appreciation, not a budgetary strain. The better you manage your tipping habits, the more you will avoid overspending and make thoughtful choices that reflect both your financial habits and your appreciation for the service.

Get Out of Debt and Stay Out With Adamson & Associates

If you feel like your spending has gotten out of control and are overwhelmed by debt, you can contact Adamson & Associates for professional assistance.

Adamson & Associates is licensed by the Canadian Government to help consumers get out of debt—and stay out of debt. Speak with a Licensed Insolvency Trustee to see if Bankruptcy, a Consumer Proposal, or credit counselling is right for you. Call 519-310 JOHN or submit our secure form to arrange a free consultation in Ontario. We’ll help you find a solution to your unique financial situation.