Gen Z Has the Worst Tipping Habits, According to Survey

Headlines about Generation Z and millennials killing this or that industry are plentiful, and usually overstated. But could the younger generation actually kill tipping?

Maybe, says a 2023 Bankrate survey. It found that Gen Z—the cohort born between 1997 and 2012—is the worst generation on tipping. They tip less often than their older counterparts for almost every service, including restaurants.

Is Gen Z ungrateful towards service workers? Or are there other factors driving their tipping habits? Learn how Gen Z tips, their reasons for tipping less and what it means for the future of tipping culture.

Gen Z Tipping Habits vs. Other Generations

Bankrate measured how often people tip for various services—Gen Z were the worst tippers for every service, but one.

• About 35 percent of Gen Zers say that always tip at sit-down restaurants—83 percent of baby boomers do the same.
• Only 24 percent of Gen Z always tip their hairdresser, stylist or barber. For comparison, 70 percent of baby boomers always tip for these services.
• Food delivery has transformed into a robust online service during Gen Z's lifetime, but only 31 percent of them always tip their delivery drivers. That's half the rate among baby boomers.
• Taxis and rideshares have also changed under Gen Z's watch, with services like Uber and Lyft taking the lead. However, 22 percent of Gen Zers always tip their drivers vs. 56 percent of baby boomers.

There's only one service where Gen Z comes out on top. Fifteen percent of them always tip for home services and repairs compared to six percent of baby boomers.

Despite this outlier, there is a clear generational trend: Gen Z are worst about tipping, especially in services that rely significantly on tipping for their wages, like restaurants and food delivery.

A Tipping Shift: Why Aren't Gen Z Good Tippers?

Different Gen Zers have their own reasons for not tipping. However, there are likely several likely culprits for this generation's bad tipping habits:

Income

A 2022 CreditCards.com survey found that restaurant tipping amounts increased with income—people making over $100,000 tipped more than those in lower income brackets.

People generally make more money as they get older and advance their careers. And Gen Z and millennials have not been shy about their wages not keeping up with housing costs and other expenses.

Gen Z may tip less because they simply don't have the cash to spare. That could explain why Gen Z homeowners are better tippers than older generations—they have higher discretionary income and don't mind spending it on tips for home services and repairs.

However, it's difficult to square this explanation with increased splurging among Gen Z and millennials. So not every Gen Zer can justify their tipping habits with their lower income.

COVID-19

Many Gen Zers came of age during the COVID-19 pandemic, which saw restaurant tipping habits decrease across the board, according to a 2023 research article.

President Joe Biden declared that the pandemic was over in September 2022, but it has left a lasting impact on those who lived through it. Gen Z may still be shaking off the poor tipping habits they developed in the early 2020s. If this is true, we could see their tipping habits improve as we get further from the pandemic years.

However, broader tipping trends during COVID undermine this explanation. While restaurant tips decreased, some tips—like those for delivery drivers—increased, according to a meta-study from Cornell University's Michael Lynn. And Gen Z still tips worse than other generations for those services.

Moral Objections

Some Gen Zers say that the entire system of tipping is morally wrong. To understand why, we need to see how tipping works.

Jobs that rely mostly on tips for their income—like restaurant servers—have a lower minimum wage. The Fair Labor Standards Act (FLSA) only requires businesses to pay tipped employees $2.13 an hour, as long as their combined wages and tip income reach the federal minimum wage of $7.25.

That difference between tipped and non-tipped minimum wages—called a tip credit—varies, but in most states, employers pay tipped workers less and rely on customers' tips to pick up the remainder of the bill.

People with moral objections to tipping culture say they have several concerns:

• Competition. Tipping encourages workers to fight over things like tables they serve or nights they work, vying for times and spaces that tip better. This creates toxic work environments.
• Discrimination. Tipping promotes discrimination in pay based on qualities like race, sex and appearance.
• Fairness. Tipping is counterproductive in the fight for fair wages, since it shifts the responsibility for paying a fair wage away from companies and onto tipping customers.

Responding to concerns about how much employee wages relied on tipping, Molly Moon's Ice Cream in Seattle banned tipping in 2019. Instead, Molly Moon Neitzel, the founder and CEO, increased wages by $4.50 an hour to make up for lost income from tips and offered other benefits, like childcare.

"Folks who are not white were making a little more than $4 an hour less in tips than our employees who were white," Neitzel told a Seattle radio station. "Our big-bodied employees tended to make less money than our skinny employees. And I could go on and on. Removing tipping was the right thing to do."

Some members of Gen Z hope that they can encourage other businesses to follow Neitzel's example and do away with tipping entirely.

It's Not Me, It's You: Is Gen Z or Tipping the Problem?

In 2008, a study found that younger people tipped slightly more than their older counterparts. But now that dynamic has flipped, with Gen Z tipping less.

Gen Z may have reasons for tipping less than older generations, but tipping itself has changed since 2008. One third of the people in Bankrate's survey say that tipping culture has gotten out of control.

Technological changes are one driving force behind this opinion. New touchscreen point of sale (POS) stations from companies like Square and Toast prompt customers for tips at checkout.

These tip requests don't just appear at dine-in restaurants. Customers see them in new places where you wouldn't usually tip, like fast food restaurants and motorcycle mechanics.

Many people feel obliged to tip out of habit, but they're also irritated.

Prompting customers for tips like this can help workers, but it also helps processing companies who charge fees as a percentage of each transaction. When customers pay more through tips, some of that money goes to those companies, rather than the employees.

If this is the new normal for tipping, can we blame Gen Z for abstaining?

What Does This Mean for Service Workers?

Gen Z wants to end tipping. And given the growing annoyance with new tipping practices, they may not be alone. But what does this mean for workers who rely on tips for a living wage?

Even if Gen Z's motives are good, eliminating tipping might not be so simple.

In a 2022 paper, Lynn found that people tip better when employees need to earn more from tips. "Reducing or eliminating tip credits may not increase servers' incomes as much as expected," Lynn wrote. He said these findings should raise "a cautionary, yellow flag," for those who want to do away with tipping culture.

For those wanting to make a change, Lynn recommends proceeding slowly. He says states should consider slowly reducing tip credits, rather than eliminating them immediately.

And how is life at Molly Moon's, the Seattle company that banned tipping? A mixed bag, according to Glassdoor reviews. Some employees praise the benefits and pay, but others feel the tipping ban puts them in difficult positions.

"The only time we're allowed to say no to the customer is when they want to tip us," one former employee wrote. "We have to decline, or risk being fired."

No one likes tipping very much—customers feel tipping fatigue and employees are concerned about how it impacts fairness in pay. But there are no quick and easy paths forward. The future of tipping may depend on what Gen Z does next.