Millennials and Tipping

Millenials Tipping Bar Beer

I recently read a number of articles dealing with the tipping habits of Millennials. Most were in agreement that they are “stingy,” to say the least. The first article referenced here was written by Betsey Guzior, Bizwomen engagement editor, and the other by Riley Griffin of Bloomberg. Both referred to a recent survey conducted by CreditCards.com.

Ms. Guzior set the stage with her opening comments: “When it comes to tipping, Millennials are the worst!” She went on say:

“According to a new survey by CreditCards.com, 10 percent of Millennials say they leave nothing for a tip when dining at a restaurant, compared to just 3 percent of other age groups. Sixty-three percent of Millennials between the ages of 18 and 37 tip less than 20 percent at restaurants. When given a choice of pre-entered tipping options, 14 percent of Millennials pick the lowest one or none at all.”

She also confirmed a fact that I have known and written about for years: Diners are happier when they can tip. Here again, the mood factor plays a major significance in tipping.

Ms. Guzior reported: “But the survey offers some insight into the Millennial mindset. Many would prefer to do away with tips altogether and have a service charge included in the cost of their meals. About 27 percent of Millennials say they favor that option to the existing system. And, CreditCards.com notes that diners with more money tend to tip more. Young adults as a whole have lower incomes than people who are further along in their careers.”

Mr. Griffin pointed out that: “Older, more educated Americans are the most generous. U.S. millennials are quick to whip out their wallets for pricey avocado toast and craft beer. But when it comes to rewarding waiters and bartenders who serve them, those wallets stay closed.”

He went on to say: “And those millennials who do tip at restaurants tend to leave a median gratuity of 15 percent, less than the overall average. Gen-Xers, baby boomers and the oldest Americans, the so-called Silent Generation, are more generous, leaving between 18 and 20 percent.

PlateScrape December 2018 728×90

“The study was conducted for CreditCards.com by market-research firm GfK, which gathered data last month [May 2018] from 1,000 Americans aged 18 and older. Millennials were defined as between the ages of 18 and 37.

“Beyond those poor waiters, taxi drivers and baristas fared even worse with their millennial customers. Apparently even the suggestion that a tip is expected puts some of these young people off. Eighteen percent of millennials surveyed said they typically decline to leave any amount when presented with pre-entered tipping options—say, if they’re in a taxi or taking a Lyft or Uber.

“Why are these American youths, many of whom work in tip-reliant industries, so cheap? The answer may be economic. ‘Millennials’ financial struggles are a big reason they tip less,’ Matt Schulz, CreditCards.com senior industry analyst, said in an interview.

“But twenty- and thirty-somethings aren’t the only skinflint demographic. Men, southerners, westerners, parents with young children, lower earners and the less educated said they tip less in restaurants than the overall median of 18 percent, according to the study.

Who, then, leaves the largest tips?

“The study found people who are college educated, over the age of 65, from the Northeast and Midwest, and women all reported leaving a median of 20 percent—an above average tip.”

Over the years, I have viewed many surveys dealing with Millennials, but only one has described in detail the results of a study by the research firm of Harmon Group, for the United States Potato Board. While the study focused on how this group ordered and prepared potatoes, it also gave us a look at eating. The study, taken online, consisted of 2,000 participants. I found the information very helpful in understanding their preferences, and you might agree. After all, they do continue to represent one of the largest groups of the eating-out populace.

  • 55 percent prefer communal tables at restaurants.
  • 68 percent ask friends before selecting a restaurant.
  • 87 percent will splurge on a nice meal even when money is tight.
  • 40 percent will order something different every time they eat in a restaurant.
  • Millennials eat out most frequently at lunch.
  • They tend to eat four meals a day, at nontraditional times of the day.
  • 30 percent eat foods that are certified organic (as compared to 21 percent of Gen Xers and 15 percent of boomers).
  • They prefer whole foods over processed foods.
  • They will spend more on ethically sourced meats and farm-to-table experiences.
  • 80 percent want to know more about how their food was grown.
  • The food companies among Millennials’ top most trusted brands are Whole Foods, Trader Joe’s, Ben & Jerry’s, and In-N-Out Burger.

When reviewing additional surveys dealing with restaurant consumers in general, I’ve found the following is almost universal. When asked what is most important when choosing food, in general, the top-scoring attribute was “good value for the money,” at 36 percent. Good value was also a top scorer when respondents were asked what is most important when choosing food from a restaurant. Thirty-nine percent said “value matters most.” In a few words, this is what Millennials want: Meals that are fun and exciting, yet natural and unprocessed; convenient and fast/easy, yet healthy; and of high quality, yet affordable.

Don’t we all?

Fred G. Sampson
Fred G. Sampson is the retired President Emeritus of the New York State Restaurant Association. He began working with NYSRA in 1961. Within the next four years the NYSRA more than tripled its membership and expanded from one regional chapter to eight. Sampson played roles in representing restaurants on issues including paid sick leave, minimum wage, liquor laws, a state-wide alcohol training program and insurance plans. Comments may be sent to fredgsampson@juno.com