How Will Tipping Change Post-Pandemic?

Summary

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WSJ Your Money Briefing: How Will Tipping Change Post-Pandemic?

Episode Date: May 20, 2021
Host: J.R. Whalen
Guest: J.J. McCorvey (WSJ Noted reporter)

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Episode Overview

This episode explores how the pandemic has affected Americans' tipping habits and the evolving expectations for gratuities as society reopens. WSJ reporter J.J. McCorvey joins J.R. Whalen to share insights on the “new rules” of tipping, how to approach tipping in today’s economic landscape, and practical ways to balance generosity with your budget.

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Key Discussion Points and Insights

1. The Pandemic’s Impact on Tipping Habits

• Shift in Tipping Circumstances
  • The most noticeable change was people tipping for new situations, not necessarily tipping larger amounts.
  • Example: Tipping for takeout and pickup orders, which previously involved little or no gratuity.
  • Quote: "The biggest ways that people change their tipping habits is through circumstance as opposed to amount." — J.J. McCorvey [02:23]
• Continued Support for Service Workers
  • Many people tipped more to support service workers who had their hours cut or workplaces shut down.
  • There was a “dig deep” mentality as a way to help during hard times.
  • Quote: "A generous tip was a nice way of supporting businesses and service workers who might have been struggling." — J.R. Whalen [00:36]

2. New Baselines and Etiquette for Tipping

• Expert Recommendations on Amounts
  • 15% suggested as the new minimum; 20% on average.
  • Tipping can and should vary based on circumstances.
  • Quote: "An etiquette expert ... suggested 15% as a new minimum and 20% on average. But of course that can vary depending upon the situation." — J.R. Whalen [03:05]
• What If You're Unsure?
  • Direct communication can ease the anxiety: “Just ask what others tip for similar orders.”
  • Quote: "You can say, hey, what do people usually tip? Or if I want to be generous, what are your most generous customers usually tip on something like this?" — J.J. McCorvey [03:22]

3. Tipping’s Place in a Rebounding Economy

• Rising Costs and Budget Strain
  • Inflation and returning to social life mean people are spending (and tipping) more, which can stress personal budgets.
  • Anecdote: A young professional often tips $3 on a $6 coffee (50%), but opts for Dunkin’s app to avoid the pressure, revealing how generosity can become financially challenging.
  • Quote: "She doesn’t go to that coffee shop all the time because tipping that much starts to eat into her budget." — J.J. McCorvey [04:28]
• Adjusting Budgets Seasonally
  • Budgeting doesn’t have to be rigid—adjust your “entertainment/leisure” budget during periods of increased socializing and tipping, then tighten up later.
  • Quote: "Your budget can be seasonal ... you might consider increasing your budget for entertainment and leisure, but ... take away from something else." — J.J. McCorvey [05:35]

4. Mindful Tipping in a Post-Pandemic World

• Align Tipping with Personal Values
  • If tipping brings you joy or fulfillment (such as supporting favorite workers or establishments), allow for that in your budget.
  • Reassess how much gratification or value you derive from tipping, not just its social expectation.
• A Unique Moment for Budget Reflection
  • The sudden return of expense categories (meals out, travel, etc.) is an opportunity to rethink all spending—including gratuities.
  • Quote: "Going from that moment of essentially neutral to suddenly all this traffic in your bank account offers a really unique moment of visibility and also an opportunity for you to consider, like, what you don’t and do need to be spending money on." — J.J. McCorvey [07:50]

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Notable Quotes & Memorable Moments

• "A generous tip was a nice way of supporting businesses and service workers who might have been struggling."
  — J.R. Whalen [00:36]

• "The biggest ways that people change their tipping habits is through circumstance as opposed to amount."
  — J.J. McCorvey [02:23]

• "You can say, hey, what do people usually tip? Or if I want to be generous, what are your most generous customers usually tip on something like this?"
  — J.J. McCorvey [03:22]

• "She doesn’t go to that coffee shop all the time because tipping that much starts to eat into her budget."
  — J.J. McCorvey [04:28]

• "Your budget can be seasonal ... adjust it as your circumstances change."
  — J.J. McCorvey [05:35]

• "It is this custom that has been around for a long time that is very unique to America and how we tip. And so now, I think, is a great time to apply finance, management and budgeting tools to think about gratuity."
  — J.J. McCorvey [07:10]

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Timestamps for Key Segments

• 00:36: Introduction to the post-pandemic tipping question
• 02:23: How tipping habits changed during the pandemic
• 03:05: Etiquette expert on tipping minimums and averages
• 03:22: What to do if you’re unsure how much to tip
• 04:28: Personal story—budget pressure from routine tipping
• 05:35: Strategies for flexible, seasonal budgeting
• 06:32: Experts’ advice on making tipping align with personal happiness
• 07:50: Final thoughts on using this moment to reconsider spending habits

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Summary Takeaways

• Tipping expanded into new service situations during the pandemic, not just increased amounts.
• Economic reopening and inflation have made tipping more frequent and sometimes more burdensome for consumers trying to balance generosity and budgets.
• Flexibility and conscious budgeting—especially for gratuities—are recommended as people return to pre-pandemic spending patterns.
• Aligning tipping practices with your personal values and happiness can help ease budgeting guilt and support service workers in meaningful ways.

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Transcript

[Small Business Owner]

Access to affordable credit helps me pay my employees, but I don't really need it.

[Retail Industry Representative]

Infliction is killing me, but who cares? Big retailers are making record profits. That's why we support the Durbin Marshall credit card bill.

[Small Business Owner]

See banks and credit unions help small businesses make payroll. This bill would cut the vital resources

[Retail Industry Representative]

they need while increasing megastore profits. They deserve it, don't they?

[Consumer Advocate]

Tell Congress, stop the Durbin Marshall money grab for corporate megastores paid for by the Electronic Payments Coalition.

[J.R. Whalen]

Here's your money briefing for Thursday, May 20th. I'm J.R. whalen for the Wall Street Journal. A lot of people pulled back on their spending during the pandemic. But there's at least one area where many of us got a bit freer. Tipping. A generous tip was a nice way of supporting businesses and service workers who might have been struggling. But how should tipping work as we get back out into the world and and start spending on more things?

[J.J. McCorvey]

So you go from paying only rent and groceries, essentially, to then happy hour and flights and hotel stays and Airbnb and on and on.

[J.R. Whalen]

Coming up, our reporter J.J. mcCorvey will discuss the new rules of tipping and how to fit it into your budget. That's after the break.

[Small Business Owner]

Access to affordable credit helps me pay my employees, but I don't really need it.

[Retail Industry Representative]

Infliction is killing me, but who cares? Big retailers are making record profits. That's why we support the Durbin Marshall credit card bill.

[Small Business Owner]

See banks and credit unions help small businesses make payroll. This bill would cut the vital resources

[Retail Industry Representative]

they need while increasing megastore profits. They deserve it, don't they?

[Consumer Advocate]

Tell Congress, stop the Durbin Marshall money grab for corporate megastores paid for by the Electronic Payments Coalition.

[J.R. Whalen]

The pandemic changed how we think about gratuities. For the past year, we often dug deeper into our pockets for the person who made or delivered our meals, for example. But as more people are vaccinated and start heading back out into restaurants, should we tip service workers any differently? The answer isn't clear cut. J.J. mcCorvey is a reporter for WSJ Noted, and he looked into this and he joins us now. JJ, thanks for being here.

[J.J. McCorvey]

Hey, J.R. thanks for having me.

[J.R. Whalen]

So tell me, how did the pandemic change the way that Americans view tipping?

[J.J. McCorvey]

The biggest ways that people change their tipping habits is through circumstance as opposed to amount. I looked at data from Square the Payments company, and while it's true that tips on credit cards were relatively stable through the pandemic, I think what changes our tendency to tip on takeout and carry out and also our tendency to tip for long distance orders. So obviously a lot of restaurants were not doing full service, so we started tipping more on orders where there's no service involved, where we're just picking up the order and calling over the phone or placing on our apps.

[J.R. Whalen]

And one of the people you spoke with was an etiquette expert and she suggested 15% as a new minimum and 20% on average. But of course that can vary depending upon the situation. So what if you don't know how much to tip? You know, you don't want to shortchange the workers, but you also want to tip within reason.

[J.J. McCorvey]

In those types of instances you can always just ask, you know, you can say, hey, what do people usually tip? Or if I want to be generous, what are your most generous customers usually tip on something like this? You know, and I think that kind of can disperse a lot of the uncertainty and kind of self consciousness like as you're trying to decide in front of the cashier and maybe your friends on what to tip on this item.

[J.R. Whalen]

So now that the economic climate is improving, is that changing the way people are thinking about tipping?

[J.J. McCorvey]

So I spoke to this young woman who, she's 29, she's an advertising account manager and every day she goes to this coffee shop and she talks about this moment that we've all experienced that you get your coffee and they flip the iPad over and you have to sign your name for the check, but then you're presented with a tip amount you want to leave $1, $2, $3 or a certain percentage. And she talks about how, you know, she typically leaves $3, which is, you know, on a $6 coffee, 50%. And you know, then she confesses that she doesn't go to that coffee shop all the time because tipping that much starts to eat into her budget. And so she kind of sneaks off to Dunkin Donuts because Dunkin Donuts mobile app doesn't have a spot for adding tip. And so I just thought it was really interesting because it shows you that a lot of people do want to tip more. They know that restaurant workers hours have been cut. A lot of service businesses, not just restaurants, but also spas and nail salons, have been shut down during the pandemic. And so, you know, people like this young woman, she wanted to support those small businesses. But yeah, as she noted, that can be be taxing on your finances.

[J.R. Whalen]

Yeah. And as we've seen in the past few months, the prices of a lot of things and not just food continue to rise. Generous tipping is one thing, but it can also add up.

[J.J. McCorvey]

Yeah, it can. And, you know, another piece of advice that I got while reporting this, I think can be very helpful to that point, which is that your budget can be seasonal. Like, it doesn't have to be rigid for you don't have to stick to a certain budget for a year. And so that can be applied now, like, as things open up and maybe you've gotten vaccinated and you feel more comfortable socializing with friends. You know, it's summertime, you're going to be spending more money at restaurants and bars, but you also like to tip 20, 25%, 30% for the next three months. You might consider increasing your budget for entertainment and leisure, but, you know, just take away from something else, you know, and then once you start kind of going back in, maybe at the end of summer, you take that back down to something else.

[J.R. Whalen]

So what do experts say about how to think about tipping and fitting it into your personal budget?

[J.J. McCorvey]

I think what would be helpful here is, according to experts, is to spend money on what makes you happy. You know, like, if you think about tipping as a means to. To enrich the life of your server, maybe, and that kind of brings you fulfillment, you know, then you can, you know, feel less guilty about that, you know, when you're going out and tipping a bit more. And I think that, you know, reassessing your motivations on. On tipping and again, in your budget in general can be helpful. I just think that with everything happening with the economy and with the pandemic, I just think here in America, we don't really think about tipping that hard. It is this custom that has been around for a long time that is very unique to America and how we tip. And so now, I think, is a great time to apply finance, management and budgeting tools to think about gratuity. There's not often that one, thankfully, there's not a global pandemic that we experience often. But more specifically, there's not a lot of times where we get to pause and get to a point where there is not a lot going out of our bank accounts. And then suddenly there is kind of an acceleration of sports spending. So you go from paying only rent and groceries, essentially, to then happy hour and flights and hotel stays and Airbnb and. And on and on. And so going from that moment of essentially neutral to suddenly all this traffic in your bank account offers a really unique moment of visibility and also an opportunity for you to consider, like, what you don't and do need to be spending money on.

[J.R. Whalen]

All right. That's Wall street journal reporter J.J. mcCorvey. J.J. thanks for coming on the show.

[J.J. McCorvey]

Thank you for having me.

[J.R. Whalen]

And before we go, you can get unlimited access to all of the Wall Street Journal's news and analysis for free [e-mail] I'm JR Whalen for the Wall Street Journal.

[Small Business Owner]

Access to affordable credit helps me pay my employees, but I don't really need it.

[Retail Industry Representative]

Infliction is killing me, but who cares? Big retailers are making record profits. That's why we support the Durbin Marshall credit card bill.

[Small Business Owner]

See, banks and credit unions help small businesses make payroll. This bill would cut the vital resources

[Retail Industry Representative]

they need while increasing megastore profits. They deserve it, don't they?

[Consumer Advocate]

Tell Congress, stop the Durbin Marshall money grab for corporate megastores paid for by the Electronic Payments Coalition.