Tipping is a curious practice. It is optional – yet done – in spite of its undesired inflationary effect.
During the pandemic, the central bank lowered interest rates, a move traditionally undertaken to incentivize consumers to buy things like cars and houses. The federal government further issued unemployment and stimulus checks. Together, these measures were designed to avoid stagnation by providing Americans with cash to spend.
But many places where Americans would normally spend were locked down. At this unusual time, we were reminded of our love for things like dining out. While restaurants tried to stay afloat by creating take-out menus, services offered by DoorDash and Uber Eats thrived.
Since we could not buy cars and houses, we gladly tipped the service industry workers who dutifully delivered a sense of normalcy to our doors.
Our release from lockdown coincided with more vendors acquiring iPad checkout stations. The iPad checkout offers two key benefits. For one, it reduces waste because it allows the user to sign a screen rather than paper. For another, it automates calculation following the user’s selection from a list of tipping options. Win . . . win?
The iPad checkout has facilitated tipping in another practical way. It meets our increasing demand for electronic payment. These days, only drug dealers, strippers and the tooth fairy carry cash. In fact, only 10% of the U.S. money supply even exists in physical currency.
In our local economy, an anonymous source from Serious Texas BBQ confirms that tips increased notably when tipping was made possible by an iPad. Interestingly, this source also finds that Texans are the biggest tippers.
An informal survey revealed more sources, one of which indicated that the largest tip he has received as a professional mover was from a Texan, and another who indicated that locals tip better than Texans at Durango Coffee Company.
Though the lockdown is over, our tendency to tip remains. We are tipping at iPads more than ever, and on top of that, we have resumed buying cars and houses. The result is inflation. In simple terms, there are more dollars in circulation. As a consequence, prices have increased.
Relatedly, there is grumbling about tipping. A Google search for “tipping” yields results like: “Tipping is out of control. Here are the new rules.” And, “Has gratuity reached a tipping point?” As it turns out, we prefer tipping with the federal government’s dollars over our earned dollars.
Indeed, tipping is seen in more places due to the ubiquitous iPad. However, tipping for obscure services is not new. There is folklore that the condemned in ancient England tipped their executioner to sharpen the blade before a beheading. Theoretically, a sharp blade ensures a swift execution, thereby, minimizing the suffering of the tipper.
An online debate exists about whether this constitutes a bribe or a tip. The New Yorker reports that the very name “tip” is said to derive from English coffeehouses soliciting change “to insure promptitude.” Insuring promptitude seems to be the objective of the condemned and hence, aligns with a tip, not a bribe.
In Durango, locals may find themselves tipping in the least prompt of circumstances. We happily chat with the workers at Bread. Many of us appreciate that the barista at Still Life tops our latte with a carefully crafted foam. After all, if it were an economical cup of coffee that we sought, then we would not go to a coffee shop.
The picture I paint is one of willful inflation. We lament higher prices yet perpetuate inflation through our tipping habits. If you consider this too irrational to be true, I will remind you that Texans drive to Colorado to eat Serious Texas BBQ.
Lacey Donley is an assistant professor of accounting at Fort Lewis College and CPA.
