"Self-Checkout but Asked for 20% Tip?"... US Consumers Feel Like 'Hogang'

WSJ "US Restaurants and Cafes Pass Wage Increase Pressure onto Consumers"

In the United States, there is a growing trend of restaurants and cafes requiring consumers who use kiosks for self-ordering and payment to leave tips as high as 20%. Critics argue that while business owners are increasing the burden on consumers already struggling with high inflation, they are also shifting the pressure to raise wages due to rising prices onto consumers through tips.

On the 8th (local time), The Wall Street Journal (WSJ) reported, "Messages urging tips of 20% are flooding self-checkout kiosks at airports, stadiums, cookie shops, and cafes nationwide, troubling consumers."

According to Square, a U.S. payment system company, tip transactions at 'quick service' restaurants like McDonald's increased by 16% in the fourth quarter of last year compared to the previous year. This is similar to the 17% increase in tip transactions at 'full service' restaurants where employees provide face-to-face service. This means that even restaurants with little or no face-to-face service are collecting tips from consumers as if employees were serving them.

Garrett Bemiller (26) recently experienced being asked for a tip while purchasing items and self-checking out at an OTG gift shop, a U.S. food distribution company, at Newark Liberty Airport in New Jersey. After taking out a $6 bottle of water and proceeding to pay at the kiosk, he encountered a message on the screen asking if he would leave a 10-20% tip. He refused to leave a tip and criticized the message as "emotional extortion." Warren Williamson (35) had a similar experience recently at an OTG gift shop at Houston Bush Intercontinental Airport in Texas.

The media reported that even when buying a single $5 cookie at a cookie shop, consumers are frequently asked if they want to leave a tip. Gracie Shepherd (20), a college student, encountered a tip request message while self-checking out through a kiosk at Crumbl Cookies, a famous cookie chain in Louisiana. She decided to leave a tip, but the only thing she heard from the staff was to go wait on the side.

Consumers criticize that business owners are forcing tips to shift the pressure of wage increases caused by inflation onto customers. Ishita Jamar, a student at American University in Washington D.C., said, "They are reducing labor costs through self-checkout machines," and added, "I don't know why they are asking for tips or where the tips are going."

Saru Jayaraman, director of the Food Labor Research Center at the University of California, Berkeley, emphasized, "Some employers are using increased tips as a way to avoid raising wages," and stated, "Restaurant workers' wages need to be increased."

The U.S. consumer price inflation rate was 5.0% as of March, down from the peak of 9.1% in June last year. However, it still far exceeds the Federal Reserve's target rate of 2%. With already high prices and the spread of a culture requiring tips even during self-checkout, American consumers' wallets are becoming even thinner.

WSJ pointed out, "Consumers, alarmed by rising prices, are questioning where the tips paid for contactless services are going," and added, "Business owners claim that automation increases tips and allows them to raise employee wages, but consumers are increasingly questioning exactly what the tips are for."