Weekend spending habits trim restaurant tips by 1 percentage point

A recent study analyzing 68 million credit-card transactions found that restaurant patrons tip their servers up to 1 percentage point less on Saturdays and Sundays compared to weekdays. The study, co-authored by Chris Pantzalis, a professor at the University of South Florida’s Muma College of Business, suggests that increased spending on other weekend activities leads to tighter tipping.

"Tips and donations seem to come out of the same mental account," Pantzalis said. The study points to a direct correlation between weekend expenditures and gratuity amounts, impacting the earnings of service staff.

The average tip during the week was 21.30 percent, peaking on Tuesdays and Thursdays. However, on weekends, the average dropped to as low as 20.25 percent. For a server handling $1,000 to $2,000 in meals during a shift, this 1 percentage point reduction can translate to a loss of $7.50 to $20 per shift, amounting to thousands of dollars in lost income annually. The study controlled for various factors, but the trend remained consistent across 47 restaurant chains in 41 states.

The findings highlight a potential challenge for restaurant operators in maintaining consistent hourly wages for their staff. The study delved into specific weekend spending patterns, finding that in more religious counties, Sunday lunch tips were nearly 0.88 percentage point lower than on Mondays, suggesting church donations impact tipping. Similarly, on weekends with high box-office revenues, tipping rates saw a slight decrease, further supporting the theory that discretionary spending competes with gratuities.

This article is for informational purposes only and does not constitute investment advice.