Restaurateurs report ‘tip fatigue’ hasn’t yet reached Springfield

The national average of tips left by diners in restaurants is down slightly, as industry officials attribute some of the cause to “tip fatigue.”

In the third quarter of 2024, the overall tipping average nationally – comprising both full-service and quick-service eateries – was 18.8%, according to data from restaurant management system Toast based on U.S. restaurants that used its platform. That’s a dip from 18.9% a year prior, 19% in 2022 and 19.2% three years ago.

While restaurant tipping in Missouri is higher than the national average at 19.8% for Q3 2024, it also experienced a slight decrease from a year prior when it was 19.9%.

By contrast, in the Springfield area, several restaurateurs say tipping averages seem to be holding steady.

“I do hear about it, but I haven’t noticed it,” said Kristen Douglas-Brunelle, owner of Split Social Kitchen, regarding the national tipping average decline in restaurants. “We are fortunate that we do have a pretty strong clientele of regulars, so we know them, and they know the people that are waiting on them pretty well.”

Douglas-Brunelle said her 3027 E. Sunshine St. restaurant employs 14, including nine servers who receive tips.

“They tend to see 25% to 30% on their checks – a lot of times even higher. We’re really fortunate,” she said, noting all of her servers are experienced and several have worked at Split Social Kitchen since its 2020 opening.

At Retro Metro, co-owner Brandon Moore said 22 of his 29-person staff receive tips.

“Our staff at the minimum receives consistently great tips from our guests,” he said via email, adding the general average ranges 20%-25%. “Tipping shrinkage is not something we are experiencing at our restaurant.”

Customer tips are important to restaurants, as many depend on them to cover a majority of employee take-home pay, according to industry officials. The federal minimum hourly wage for tipped employees is $2.13, and the wage regulation also requires restaurants ensure servers make an average hourly take-home pay of at least $7.25. If tips don’t add up to the $7.25 total, restaurants must make up the difference.

In Missouri, tipped employees must be paid half of the state minimum wage, which is currently $13.75 per hour. Again, if tips don’t add up to the $13.75 hourly minimum wage, the employer is required to pay the remainder.

Nationally, tipped servers take home a median of $27 an hour, with the highest-paid employees making more than $41 an hour, according to the National Restaurant Association.

Higher wages and inflation have caused a rise in menu prices at some restaurants, and with it the cost of tipping. Statewide, that’s had an impact.

“We’ve seen notable shifts in customer tipping behavior in recent years,” said Trey Meyers, director of marketing and communications with the Missouri Restaurant Association, via email. “Many diners are experiencing tip fatigue, feeling pressured to tip in more situations than ever before.”

Meyers said digital payment systems frequently prompt customers to tip for counter service, takeout and even before receiving their food. It’s a stark departure from the traditional model in which tips were based on the quality of service. The current inflationary environment leads some customers to tip less frequently or at lower percentages, he said.

“This shift has caused frustration, as tipping was once a way to reward good service rather than an automatic expectation,” Meyers said, adding suggested tip amounts have increased to range 20%-25%, even for minimal interaction.

At Gilardi’s Ristorante, attentive customer service is the primary driver for tips, said owner James Martin.

“Attentiveness will get you a long way in the service world,” he said. “Sometimes a good tip does not reflect great service, and sometimes a bad tip doesn’t reflect that service. But I do want to keep track of that. As an employer, I want to see how my servers are doing.”

Martin said in the early lockdown period of the COVID-19 pandemic, many diners were just happy to be out of their house and eating at restaurants again.

“But then as we’ve gone through that, people are expecting more, which I don’t blame them. They’re expecting more service,” he said, noting tips at his restaurant in recent years average 23%-25%. “A lot of guests, they’re becoming more discerning, and they’re becoming less forgiving. It’s not that they’re cheap or their attitudes have changed or anything.”

Martin, who purchased the 27-year-old business at 820 E. Walnut St. in 2013 from restaurant namesake Nicola Gilardi, said he runs a small seven-person staff. That includes four servers who receive tips.

Martin said he personally tips with cash when dining at restaurants and wishes more diners would also. He said large retailers like Walmart can afford to absorb credit card fees or limit which cards they accept. An example is Costco, which allows only Visa cards. However, for small ventures like his, he said credit cards “over the last 20 years have really wrecked a lot of small businesses.”

Credit card processing fees for restaurants can range 2%-4% of the total amount of each transaction, according to software company TouchBistro Inc.

When it comes to tips, Douglas-Brunelle said probably 75% of customers leave tips via credit card.

“We see almost everything is credit card anymore,” she said. “We don’t do much cash business. That’s kind of where it’s gravitated to.”

At the College Street Cafe, where most menu items are priced $10 or less, owner Marylou Meierotto said customers are tipping well. Meierotto said she’s owned the restaurant for nine years and has two servers on staff at the small, 39-seat diner, which opened in 1954.

“They have a great rapport with their customers,” she said, noting the eatery has a lot of frequent visitors. “It’s that family atmosphere that probably makes us a little different than most restaurants.”

Meierotto said tips have hovered around 20% over the past couple years.

“It has been real consistent,” she said.

LeeAnn Tran, owner of The Wok on Scenic, said 70% of the tips staff receive are from call-in or online curbside orders. While The Wok on Scenic has operated since 2001, she also opened a sister property, The Wok on West Bypass, in early February.

“Our curbside customers tip very well. Our dine-in has started to tip more just because they see the value in it,” she said.

Tran said the tips for to-go orders range 10%-20%, which surprises her as it’s not full service.

Tip options
Some restaurants, particularly in full-service settings, have implemented tip pooling to create a more equitable distribution of gratuities among servers, bartenders, bussers and kitchen staff, according to the Missouri Restaurant Association. However, Meyers said there is no strong momentum for an industrywide tip pooling standard, as restaurants have varying needs.

“Ultimately, our organization believes that each business should determine what works best for its staff, service model and customer expectations, as long as any tip sharing practices comply with federal and state labor laws,” he said.

When she first opened Split Social Kitchen, Douglas-Brunelle said she offered tip sharing for the kitchen staff. About a year later, she held a staff meeting to determine if it should continue. The kitchen employees preferred to let the servers alone earn the tips. However, the servers still share their tips with the other servers working on a given night.

“I think it just made everybody happier and more fluid and cohesive as a staff together that whenever the servers earn their tips and the kitchen earns their hourly wage that they feel is fair,” she said.

Tran said her front-of-the-house employees share tips and noted an entry-level tipped position starts at $10 per hour. Back of house hourly pay typically ranges $17-$20.

“They make a lot of money in tips, and that’s also why I’m able to maintain a lot of my staff,” she said.

For Martin, tip sharing would have to be an industrywide standard for him to employ it. Otherwise, he said servers may find they could make more money at restaurants that let them keep all the tips, leading to staff turnover challenges for eateries that tip share.

“In a perfect world, everyone would share the tips based upon the hours of experience of working at the business,” he said.

President Donald Trump renewed his call late last month to eliminate federal taxes on tipped income – a proposal he supported during the 2024 presidential campaign.

Legislators have several bills filed on the matter in Washington, D.C., including the No Tax on Tips Act, which has garnered bipartisan support, according to media reports. It would create a deduction for tipped income, capped at $25,000 per year.

There are more than 2 million tipped restaurant servers and bartenders in the industry, according to the National Restaurant Association. Meyers said the proposal would boost their take-home pay for those able to deduct tipped income, adding the state association “supports common-sense tax policies that support restaurant viability, including providing tax relief to tipped workers and their families.”

However, several nonpartisan policy groups, including Tax Foundation and the Economic Policy Institute, criticize the proposal. According to the EPI, not taxing tips would reduce pressure on employers to raise base wages. It also could undermine efforts to raise minimum wages, particularly for tipped workers. The federal minimum wage of $7.25 was last raised in 2009.

Douglas-Brunelle said even if legislation were passed to eliminate taxes on tips, she’s skeptical there would be true savings on taxes paid by those tipped workers.

“As far as servers and bartenders, they would absolutely love to see that there’d be no taxes on tips. But I think that they’ll see the taxes somewhere,” she said.