Did the COVID-19 Pandemic Dampen Americans' Tipping for Food Services? Insights From Two Studies.

Abstract

The recent COVID-19 pandemic raises questions about consumer willingness to give tips during such times of hardship. Analyses of a Texas pizza delivery driver's tip records and of nationwide Square payment data for quick- and full-service restaurants explored this issue by comparing tips during the pandemic with those before it. These data suggest that the pandemic increased the average tip-per-order given to a pizza delivery driver as well as the average tip percentage given for many transactions at quick- and full-service restaurants. They also suggest that the pandemic decreased the average tip percentage for face-to-face transactions at full-service restaurants but only by a modest 1 to 2 percentage points. The findings suggest that the tipping model remains a viable means of employee compensation even during periods of public health and economic crises if the nature of the services provided does not change substantially.