Tipping plunges 40pc as consumers choose to tighten their belts

Squeezed British consumers are tipping almost 40pc less than a year ago as the cost of living crisis bites.

SumUp, a company that makes contactless payment devices, has reported that the average value of tips given to cafés, restaurants, hairdressers and other small businesses that use its payment system has plunged from £4.65 in August 2022 to just £ 2.85 in the same month this year.

The contactless card readers made by SumUp come with a “smart tipping” feature allowing retailers to add a message on a device’s display that requests customers consider making tips £ 1, £ 2 or £ 3 for transactions under £ 10. Unlike conventional tipping, where customers leave cash, SumUp’s devices will prompt customers to pay an extra markup.

For payments over £10, the tipping rates suggested are 10pc, 15pc and 20pc if a business decides to enable the feature. This can be applied on top of the cost of goods and services, such as a meal which will usually already include a “discretionary” service charge per cover. The practice has become increasingly widespread in the last year, with a 28pc increase in businesses using the tipping function on SumUp’s machines, according to the firm, which analysed data from thousands of transactions.

However, overall takings in gratuity using the company’s devices have fallen 39pc in the last year, which it blames on financial pressures brought on by the cost of living crisis.

Luke Beavon, chief executive of SumUp, said: “Over the last year, the economic landscape has presented challenges for both the British public and hospitality merchants across the UK. As consumers grapple with reduced disposable income, contributions to the cafés and restaurants they frequent significantly dwindled over the past year.” Kate Nicholls, chief executive of UKHospitality, said: “It is little surprise that customers are being more cautious with their spending and that this appears to be impacting tipping.”

Not so generous The average value of tips last August, down from £4.65 two years earlier.

Have you cut back on how much you tip? We want to hear from you.

Noah Eastwood