Canadian customers tip at restaurants, not retailers

There’s a lot of demand for your “tipping dollar” these days, but it seems customers are still more willing to leave a little something at a restaurant than at a retailer.

An Angus Reid survey done for the hospitality industry suggests a majority of restaurants and other businesses in the sector consider tipping an important part of compensation for employees.

The Atlas 2024 Hospitality Tipping Trends Survey finds that 71 per cent of respondents believe tipping is important, with 50 per cent considering it “very important.”

“The industry is confirming tipping is a critical part of hospitality in really making things work and being able to offset expenses on the cost of labour,” said Atlas co-founder and CEO Afshin Mousavian.

The survey also finds fewer than half (47 per cent) of businesses advocate for tipping as a voluntary gesture from the customer and a minority (37 per cent) believe tipping should be based on the quality of service provided.

However, Mousavian says customers are still more willing to leave tips for hospitality workers than for those in other sectors.

“There was a previous survey about a month ago that confirmed about 77 per cent of Canadians are comfortable tipping in restaurants, hotels, and hospitality experiences. What they are not comfortable with is tipping in new areas where they weren’t used to tipping before, for instance in retail,” he told 1130 NewsRadio.

The amount being left for hospitality workers, though, may be decreasing as consumers face “tipflation” and the increasing cost of living.

“Thirty-nine per cent of respondents say that they’ve seen a decrease in tipping. We know that the past four years have been very much focused on the pandemic and we also know that the hospitality sector was one of the hardest hit sectors when it comes to all the challenges during the pandemic and afterward,” said Mousavian.

“Naturally, when you get consumers who are already experiencing inflation across the board, they are also now looking at the overall expense of dining, and tipping is a part of that. We are not really surprised to see that overall tips have been decreasing.”

While most hospitality operators consider tipping important, the report also finds 34 percent prefer a higher base of pay for their employees over tips, and 42 per cent are indifferent as long as overall compensation is fair.

Additionally, two-thirds of respondents believe the Canadian government should exempt tips from income and payroll taxes, with support for this idea is particularly strong in British Columbia (74 per cent).