Study: Millennials tend to be tightwad tippers

Maybe it’s the weak job market Millennials face. Or maybe it’s the stratospherically high level of student debt they carry around. Whatever the reason, fresh data shows that customers 18-34—the age group expansion-minded operators most hope to attract to their restaurants—are far and away the worst tippers of any demographic group.

That’s the surprising takeaway from new tipping data gathered by restaurant equipment supplier Consolidated Foodservice. The numbers indicate that while a young and hip clientele seemingly makes a restaurant a cool place to work, servers who hope to walk away with a bundle of money at the end of their shift are better off at a place that draws a more seasoned clientele.

In fact, the older the customer, the better. Louisville-based Consolidated reports that while high rollers exist in every age group, customers 65-plus are the most likely to tip between 15 to 20 percent of their tab. Eighty-four percent of them do, compared to just 55 percent of customers in the 18-34 age cohort, i.e., the much-analyzed Millennials. Other age group tipping data: those between 35-44 tip 15-20 percent roughly two-thirds of the time, while the next-oldest group—those ages 45-64—leave a tip 15-20 percent gratuity 77 percent of the time.

Part of this tipping discrepancy may be related to where Millennials eat. Members of this group more frequently choose restaurants where a default 15-20 percent tip is seldom offered or expected—takeout operations, fast casual spots—so perhaps they simply aren’t familiar with acceptable tipping practices.

On the other hand, they can’t plead ignorance. The boom in smartphone tipping apps means Millennials can instantly know how big a tip they should leave. More than 85 percent of U.S. Millennials own a smartphone and free or very low-cost ($1) tipping apps for them are ubiquitous. Android users have plenty of apps to pick from. iPhone owners have no fewer than 30 choices of no- or very low-cost tipping/check-splitting apps.

So who’s getting tipped? Consolidated’s numbers show that 65 percent of customers overall tip baristas, 95 percent tip their food delivery driver and 99.5 percent leave something for their waiter or waitress. Thirty-five percent of restaurant takeout customers tip, providing a modest boost for whoever handles that aspect of a restaurant’s service sequence.

Restaurant workers definitely need the money they get from tips. Consolidated found that the modest hourly wage operators pay servers—a point of contention in many corners of the industry—isn’t a difference maker for most waiters and waitresses. Servers said tips account for between 85-100 percent of their overall earnings. In contrast, delivery personnel count on tips to supply 30-70 percent of their income, while baristas expect tip jar proceeds will constitute between 20-40 percent of their income.

This data provides an overall look at current tipping trends. But restaurant review site/restaurant guide publisher Zagat aims to provide more precision. Its 2015 Dining Trends Survey found that the average respondent among its 10,000 “avid diner” respondents tipped 19.3 percent at full-service restaurants. The best-tipping city in Zagat’s universe was Austin, where customers leave a flat 20 percent. The worst-tipping city: foodie-friendly Portland, OR, where the average tip was still a solid 18.3 percent.

“In general, the nation’s less generous tippers tend to be on the West Coast,” says Zagat.

The average tab per meal in this survey was $39.40, indicating that servers were tipped at a rate of $7.60 per cover. 

These tips seem generous in light of the service gripes registered by many Zagat survey participants. Twenty-six percent of respondents complained about the restaurant service they received last year. More were concerned about service levels than they were with other problem areas such as noise (24 percent), prices (17 percent) and crowds (13 percent.).

What, exactly, drew their ire? Zagat survey participants found fault with inattentive waitstaff (24 percent), slow service (17 percent), rude staff (10 percent) and inadequate training of servers (nine percent). In Miami, 32 percent found fault with service. Given this level of dissatisfaction, a 19.3 overall tip percentage seems like a miracle.