I have to say – point blank – that tipping is out of control! What was once “giving a little extra” when someone had gone above and beyond is now an expectation. Moreover, it’s one that now borders on mandatory for anything service-related.

Now, some might argue that this is a by-product of the fact that there is no realistic minimum wage, which means that the wage differential is passed along to the consumer, who covers it through the gratuity.

I don’t doubt that is the case for some venues or services, but from my perspective that argument does not have the same weight that it used to.

Now before I go on about the “for-my-convenience” fee, as I like to call it, I thought it might be useful to look at the history of the gratuity, particularly given that I grew up in Australia, where tipping was not part of the culture. This probably explains why I am a little prickly when it comes to this subject.

Here is what I found: in ancient Greece and Rome, upper-class or wealthy individuals might give small gifts or tokens of appreciation, but leaving extra money was rare. In medieval Europe, wealthy people would give small presents or cash to servants, innkeepers or other helpers as a way of saying thank you. The word “tip” apparently originates from a medieval European phrase “to insure promptness”.

In England during the 17th and 18th centuries, “tipping” was typically only for wealthy households. Each year, families would provide a small gift or a few coins to their servants and staff as a sign of gratitude.

Tipping only extended outside of the household when something needed to be done quickly or privately, in which case it was a way to say thank you to someone for their service and/or discretion.

On the other side of the pond, in the US tipping really took off in the 1800s, particularly after the Civil War, when American travellers who visited Europe saw how tipping was done there and brought the custom back to the US. However, over time tipping evolved and became a standard part of service-based industries (Mabud, 2019).

So, now we know where tipping came from, how did it go from reward to requirement? Or let me put it another way: how is it that the consumer is now expected to reward a person with an additional 18 per cent to 20 per cent of their total bill for doing a job they are contracted to do? It makes no sense.

In addition, a new wave of “for-my-convenience” fees has emerged. After dining recently, I looked at my bill and noted there was a “service charge”. When I asked if this was the tip, the server told me that the service charge is a gratuity for the entire service staff and kitchen. If I wanted to tip them directly for their service I would need to include extra on the bill.

This was one of the most uncomfortable experiences I’ve had in a long time: if I didn’t tip extra, I would basically be insulting them. So, my bill for a dinner for two that should have been $150 ending up being $207, with the difference being a 20 per cent service charge and a 18 per cent gratuity to the server. I am sorry, but I do have a problem with that.

Now, don’t get me wrong: I don’t have an issue with tipping. But it is growing excessive and getting out of control. It seems that people are expecting tips for doing very little, and from my perspective, this amounts to financially taking advantage of the consumer.

Should you need to tip for picking up a takeout order or waiting in line to grab a coffee? Apparently so. I see tip containers everywhere now, and certainly there’s a tip option on almost any credit card machine, along with suggested percentages.

Recently, I was in the US on business. I went out for dinner, and when I got my bill and the credit-card machine arrived, it not only suggested these tip percentages, it also explained what each percentage meant:

• 15 per cent – not great service

• 20 per cent – service was acceptable

• 35 per cent – service was amazing

Honestly, I was flabbergasted and appalled. This is a classic example of tipping getting out of control.

With all that said, taking advantage of consumers through gratuities is a controversial practice that raises ethical concerns. Gratuities, or tips, are traditionally viewed as a way to reward good service and supplement income for service workers such as wait staff, hotel staff and delivery personnel.

However, some businesses exploit this system by intentionally underpaying employees, relying heavily on tips to make up their wages. This shifts the burden to consumers, who may feel pressured to tip generously, even if the service was sub-par, simply to ensure fair compensation for workers (Stoller, 2025).

In some cases, companies implement policies that obscure the true cost of services, encouraging customers to tip more than they might otherwise.

For example, adding automatic gratuities for large groups or including service charges without a clear explanation can lead consumers to spend more than intended. This practice takes advantage of consumers’ genuine goodwill. Moreover, from an ethical standpoint, it raises concerns regarding transparency, fairness and respecting consumers’ rights to make informed choices.

Some might argue that if you can’t afford to pay for the tip – or don’t want to tip – then don’t go to the establishment. Fair point. However, this is not about affordability, it’s about the principle and truly feeling that consumers are being taking advantage of by this excessive emphasis on tipping.

At the end of the day, based on my research for this article, it’s becoming more and more evident that consumers are feeling that tipping is getting out of control. Tipping should be at the discretion of the consumer, not placed on my bill ‘for my convenience’.

References

Mabud, R. (February 12, 2019) The Racist Roots Of Tipping Reemerge In The Gig Economy. Forbes. Available from: https://www.forbes.com/sites/rakeenmabud/2019/02/12/the-racist-roots-of-tipping-reappearing-in-the-gig-economy/ [Accessed 13 July 2025].

Stoller, G. (March 11, 2025) Americans Believe Tipping Has Gone Haywire, According To A New Survey. Forbes. Available from: https://www.forbes.com/sites/garystoller/2025/03/11/tipping-has-gone-haywire-according-to-a-new-survey/ [Accessed 13 July 2025].

• Carla Seely has 25 years of experience in the international financial services, wealth management and insurance industries. During her career, she has obtained several investment licences through the Canadian Securities Institute. She holds the ACSI certification through the Chartered Institute for Securities and Investments (UK), the QAFP designation through FP Canada, and the AINS designation through The Institutes. She also holds a master’s degree in business and management