How consumers are choosing to fight back against 'guilt tipping' shame

Electronic payment machines - on which customers must pick an amount to tip using a big screen in front of a server - guilted Americans into paying larger and larger gratuities.

But now they are fighting back after the use of the screens - with options often starting at 18 percent and rising to as high as 35 percent - caused average tips to inflate.

Average on-premise restaurant tips rose above 20 percent for the first time in 2020 and hovered above that level throughout the pandemic, peaking at almost 20.5 percent as 'tipflation' persisted.

But Americans are now tipping less, according to data from payment processing company Toast. In the final three months of last year, the average tip was down to 19.4 percent.

Payment systems with digital screens enable restaurants to offer consumers suggestions for the amount they should tip

Three-quarters of Americans believe tipping culture has gone too far

The latest tipping figures come after a survey showed Americans are getting tired with digital payment machines urging them to tip more and on a wider array of transactions.

Nearly 3 in 4 Americans think tipping has gotten out of control, according to a WalletHub survey.

When adding a tip on a credit card or digital payment, guests at 'full-service' restaurants left 19.4 percent in tips on average in the fourth quarter of 2023, according to a separate recent restaurant trends report by Toast.

That is down from a peak of almost 20.5 percent during the height of the pandemic and less than even pre-pandemic levels of 19.5 percent in 2018.

With the rise of novel payment systems there has also been an increase in how often people tip in 'quick-service establishments' like cafes and fast food restaurants.

Between the beginning of 2020 and the end of 2022, the number of people tipping at quick-service restaurants was up by 11 percent to 48 percent.

Professor Michael Lynn, a consumer behavior professor at Cornell University, told DailyMail.com: 'iPad screens make it harder for customers to say no.

'Before customers would just see a tip jar and could ignore it if they wanted to. But now they have to actively say "no." Many are standing in line at a coffee shop and are worried about what the guy behind them is thinking.'

Tim Self, an assistant professor of hospitality at Austin Peay State University in Clarksville, Tennessee, told CNBC customers feel like they're tipping in more places.

'Customers are being asked to tip at the more traditional service encounters [and] also app-based services, ride-share and delivery apps,' he said. 'This gives the perception that tipping is everywhere, which does seem the case.'

Many Americans say they were made to feel guilty by the roll out of large payment machines with screens offering suggested amounts to tip

Not only did that initially drive up tips, but those recommendations also started to increase. One in three consumers have noticed that tip suggestions are higher than they used to be, according to research from PYMNTS.

While a tip of 20 percent in a full-service restaurant is a fairly well-established norm, how much and when one should tip at a quick-service establishment is less uncertain.

Payments data in the report also indicated that tips vary significantly depending on the day of the week. 

Customers would be stingiest when tipping on Sundays and gradually increase amounts until Thursday. On Fridays and Saturdays, tips would come back down.

Last year, DailyMail.com revealed that Square, which sells the software and hardware that powers many of these new-generation electronic payment systems, made an eye-watering $3 billion profit in 2022 alone.

It told NBC news that the frequency of tipping in quick-service restaurants - including coffee shops and fast-food chains - rose 16 percent in the last quarter of 2022 compared to the same period a year earlier.