The Big Bucks of Loose Change: Counting the Cost of New Tipping Trends

“In Australia, we’ve never really had a tipping culture. [Unlike the US] We haven’t had a minimum wage situation where people are really struggling to make a few bucks an hour, but where we’ve definitely seen tipping culture start to emerge is through apps.

Bring up the subject of tipping in many online forums or social circles, and the backlash against tipping being a ‘norm’ in Australia is fierce. Mortimer says this could be fueled by prompts on payment platforms, particularly when people are asked to tip before receiving a meal or service, which risks turning customers off completely.

“Tipping should really be an inherently voluntary transaction,” he says. “Australians are relatively individual types of consumers. We don’t like being told to do things or forced into situations, so I’m not sure if these types of apps provide good customer service. I wouldn’t be surprised if it creates negative sentiment and consumers vote with their feet [and go elsewhere].”

But data obtained from many menu apps and payment platforms shows that tipping is alive and well after the pandemic.

Food ordering and payment platform me&u, which works via QR codes on restaurant tables, passed on $2.2 million in tips to hotel staff across Australia last year. This represents around 1-2% of the total transactions made on the platform. This was a 672% increase in tipping compared to 2020 (when the company first launched its tipping feature).

me&u chief executive Katrina Barry said some restaurants have seen 50% growth in tips since adding the tipping feature to the app, while some restaurants that have never collected tips before were now getting a decent stream.

Credit:Matt Golding

“The Boatbuilders Yard at South Wharf was never used to getting tips, and thanks to me they now generate over $2,000 in tips a month,” she said, noting that the data of his business showed that the most generous dumpsters in Victoria were at South Wharf, Melbourne. CBD, Brunswick, Portsea and Falls Creek.

Data from tech firm Square, which provides financial services products to restaurants and other industries, showed the average tip size in Australia was around 10% before the pandemic and has fluctuated since, affected by broader economic trends.

Statistics show average hospitality tips nearly returned to pre-pandemic levels in January, hitting 9.5%, but then fell to 8.1% in May as cost of living pressures have settled down.

Tipping data also shows other trends. According to Square, Victorians tip more than customers in New South Wales and Queensland (10.7% on average in May, compared to 6.6% in Queensland and 6.3% in New Zealand). South Wales). Tipping is most common in New South Wales, according to Mr Yum, a rival food ordering and payment platform.

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A spokesperson for Mr Yum said the ACT had the second highest number of tippers, followed by Victoria, Queensland, Tasmania, South Australia and then Western Australia.

Mr. Yum, me&u and Square all allow restaurateurs to determine how tips paid through their platforms are split among staff, while Uber said 100% of tips paid to it go directly into the accounts of drivers and customers. delivery men.

Punters who wish to tip at Blacher’s restaurants in Melbourne now do so via eftpos machines by naming a percentage at the end of their meal, and those tips are distributed to all staff working the shift, in addition to their base salary.

While he admits it killed some of the “romance” of tipping, Blacher says numerical tipping can make the process of calculating a 10 or 15 percent tip easier, and it’s simple enough for people to click “no” if they don’t. feel that a tip was warranted.

“We’re not like America where it’s a big part of our economy, but hopefully some tipping will stay in Australian culture in some way,” he said. “It is intended to reward good service and excellent hospitality.”

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