Tipping has been an American practice for many years, but recently, many consumers have been made to tip more than they want. This phenomenon, which has become known as “guilt tipping,” is now starting to fade. Americans in 2025 are, according to new research, spending 38% less on guilt tipping than they were a year ago, as individuals cinch up their belts against rising living costs.
What is guilt tipping?
Guilt tipping happens when people tip not because of great service, but because of social pressure. This often happens at digital checkout screens where suggested tip percentages are displayed. Customers sometimes choose a higher figure just to avoid looking cheap or being judged by staff members or other customers.
As a result of this pressure, the average American is shelling out about $24 more a month than they think is fair, based on Talker Research’s yearly survey. That’s a total of about $283 a year in guilt-driven tips.
Americans cinching belts
While $283 is still a lot of money, it’s noticeably lower than last year. In 2024, consumers spent more than $450 on guilt tipping. The survey found that people tipped out of guilt an average of 4.2 times a month this year, compared with 6.3 times a month last year.
This means many Americans are becoming more forceful in saying “no” to exorbitant tipping, especially with everyday expenses like food, rent, and gas constantly on the rise.
The pressure to tip
The poll also found that 37% of shoppers know that tip prompts are higher than they have been in the past. Most point-of-sale systems now ask for 20% tips or more, even for things like takeout or quick-service coffee. Nearly half of the people said they noticed the trend last year as well.
Roughly 20% of respondents admitted they often tip more than they’d like out of guilt. However, 29% said they never or rarely feel compelled to tip.
Why people are tipping less
The main reason tipping is on the decrease is the rising cost of living. Almost half of the people who answered said that rising costs made them cut back. Over one in five people said that they are tipping less in general.
At the same time, many believe that businesses should pay their employees more instead of depending so much on tips from patrons.
But not everyone is cutting back on tips. Around 11% said they are tipping more than normal. Half of them said they were doing it to assist workers during challenging times.
New law changes tipping rules
The results come after the signing of a new law that can have a considerable effect on tipped workers. The One Big Beautiful Bill Act, signed into law on July 4, 2025, allows eligible employees to exclude up to $25,000 in tips from taxable income.
The law will be effective from 2025 through 2028, or longer if renewed. It covers more than 60 professions in eight groups, including:
- Bartenders
- Wait staff
- Dishwashers
- Cooks and bakers
- Cafeteria attendants
- Food servers outside restaurants
- Food preparers
- Hosts and hostesses
These are jobs that are based mainly on tips, and the new tax deduction can enable employees to keep more of their earnings.
The big picture
The decline in guilt tipping suggests that Americans are reevaluating tipping culture. Individuals are no longer as willing to hand over additional money out of embarrassment or social expectation. They are now choosing when and how much to tip based on the quality of service and their own financial situation.
For businesses, the shift might ignite arguments over living wages and whether customer tips can be a sustainable crutch. For workers, the updated tax code might soften the blow of fewer tips.
Final thoughts
Tipping is anything but dead, but the days of guilt tipping out of obligation may be behind us. With inflation tightening purse strings, more people are rebelling against electronic suggestions and paying what they think is fair.
In the meantime, government reforms like the new tax break for tipped workers could bring some equilibrium, offering more protection to workers while easing the squeeze on consumers.
One thing is sure for the moment: Americans would prefer tipping to return to what it was supposed to be — a reward for good service, not something guilt-driven.
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