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Are Californians Particularly Cheap Tippers? New Study Says Yes

Written by Sarah HoltzPublished May 31, 2023 • 5:30am
Owner Romania Daza selling pastries to a customer at Tabita’s Cafe in San Francisco on Dec. 8, 2022. | Michaela Vatcheva for The Standard

Californians rank dead last in the nation for tipping, according to findings from a 2019 to 2023 restaurant sales report.

Toast, a transaction platform used by about 79,000 businesses in the United States, compiled credit card sales data from full-service and quick-service restaurants that use its technology, finding that Californians tipped 17.6% on average in the first quarter of 2023. That’s compared with a national average of 19.8%. 

Drilling down on the data, the results out of San Francisco paint an even bleaker picture. The average tip in San Francisco is 17.1% so far this year

Of course, to some extent, this discrepancy could be due to California’s high minimum wage for tipped workers—$15.50 per hour—whereas the national minimum hovers at $2.13 per hour. 

Yet, given the soaring cost of living in the Bay Area, it’s also worth noting that the minimum wage has been decoupled from inflation for decades

Amid a national backlash against what many call “tip creep” or “tipflation” at fast-food restaurants and convenience stores, Toast found that the average tip at quick-service restaurants has slumped to a five-year low of 16.7% nationally.

The study also reported on lunchtime sales data that reflects the national coverage of San Francisco’s sluggish economic recovery from Covid. In San Francisco, lunch transactions on Toast are down by 22% from 2019.

Lunchtime cocktail specials don’t appear to be helping matters, either. While states like Wisconsin and Wyoming seem to be bringing back the “three-martini lunch”—with a significant uptick in drink orders during lunch hour—California lags behind, with 15% of the bill going to booze on average. 

But it’s not all bad news. Evidently, California’s epic rainy season has finally borne fruit. The study used the average price of avocado toast to explore whether inflation has eased at all, finding that the brunch staple costs restaurants 16% less than it did at this time last year. 

So, what gives? Toast theorizes that the trend follows the end of a temporary ban on imported Mexican avocados, which led to a price increase in 2022. That, and California rainfall has produced an unprecedented bounty of avocados, according to the California Avocado Commission

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