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by Scott Edwards

Tipping in America: How Does Your State Stack Up?

In this edition of Simple Insights, we analyzed anonymized transactions at restaurants, bars and coffee shops and looked at the average tipping rate.

One of my favorite Simple features is seeing how much I tip on transactions at restaurants, or how much cash back I get at the register. I love being able to search for “tipped” and instantly bring up a list of every tip I’ve ever left on Simple. We get a lot of Twitter love from our customers for this feature, too.

Because Simple makes it so easy to know your tipping habits, our last Simple Insights post generated requests for some stats on tips. We analyzed anonymized transactions at restaurants, bars and coffee shops and looked at the average tipping rate. We looked at four slices of data. Tipping rates by state, city, hour of the day and day of the week. Here is what we found.

Tipping Analysis by State

The chart above shows tip rates by state. Tipping rate is calculated as the average tip amount of all customers in a given state. The darker the color, the greater the tipping rate.

First, as you can plainly see, not all states tip equally. We found a large range in mean tip rates, with Utah coming in at the low end (10.6%). Montana topped the charts as America’s highest tipping state (16.3%).

  • 5 States with the
    highest tipping rate

    1. Montana 16.3%
    2. Wyoming 16.1%
    3. Colorado 15.2%
    4. Alabama 15.0%
    5. West Virginia 15.0%
  • 5 States with the
    lowest tipping rate

    1. Utah 10.6%
    2. Delaware 11.1%
    3. Hawaii 11.1%
    4. New Jersey 11.1%
    5. New York 11.3%

States also tended to cluster together along regional lines. The tri-state area, and the Northeast in general tip in a tight band between 11% and 12%. Likewise, Southern states cluster between 13% and 14%. Here in the Pacific Northwest, Oregon and Washington are very similar in their tipping behavior at more than 14%. The Great Plains States hover around 13%, while Ohio, Indiana and Michigan are all very close to 14.5%. Idaho and Utah are two islands of low tipping rates amongst higher tipping surrounding Western States. It’s also interesting to see that while California is separated by 3000 miles from New York, it tips at very similar rates to Northeastern states.

Let’s briefly talk about the caveats in our data. Simple hasn’t signed up everyone in the United States (yet). As such this data is limited to spending recorded by Simple, and can be influenced by demographic differences between our customers and national representative samples. Additionally it’s likely tips are sometimes left in cash, or disproportionately split between parties. Transactions classified as coming from restaurants could of course be takeout or delivery orders, which typically result in lower tips than traditional meals at a restaurant. Likewise if certain areas frequent coffee shops more than others, overall mean tip rates could be affected.

Phew! Now that that’s out of the way, let’s move on to cities.

Tipping Analysis by City

The chart above shows tip rates by city. The darker the color, the greater the tipping rate.

Let’s go one layer deeper and look at tipping behaviors at the city level. Only cities with at least 75,000 people were considered in this view.

5 cities with the highest tipping rate

  • 5 cities with the
    highest tipping rate

    1. New Orleans, LA 16.8%
    2. Columbus, OH 16.1%
    3. Denver, CO 16.0%
    4. Richmond, VA 15.8%
    5. Portland, OR 15.6%
  • 5 cities with the
    lowest tipping rate

    1. Sunnyvale, CA 9.7%
    2. Irvine, CA 9.9%
    3. Mountain View, CA 10.4%
    4. Miami, FL 10.5%
    5. San Jose, CA 10.9%

Again, we find some fascinating regional trends emerging. In casual internal polling prior to running this data, many people we asked thought New York City would have the highest tip rate. The data shows medium sized cities end up tipping the most, with New Orleans topping the charts.

Florida

Whereas tipping rates are around the 15% mark in northern Florida, Miami tips less, at about 10%.

Midwest

Tipping is generally strong across cities in America’s heartland. Mid-sized cities like Raleigh, Indianapolis, Columbus, and Louisville all tipped better than 14% on average.

California

Bay Area cities’ average tipping rates were the lowest nationwide– most of their rates hovered around 10%. Meanwhile in SoCal, there is a gradual decline in tipping rates as you move from Santa Barbara (13.5%) down to Irvine (9.8%).

Tipping Rates by Time of Day

tipping-simple-insights-tipping-by-hour

The time of day has an impact on how much we tip, which isn’t so surprising when you think about it. What is fascinating is how dramatic the change is over the course of a day.

We don’t tip very much in the early morning, starting off at around 7%. Tips rise gradually through the morning and then dip again just before and during the 12pm lunch hour. As soon as 1pm hits, tips jump up to 12%. Once happy hour arrives tips gradually rise, then accelerate the later it gets. Tips top out at an amazing 23% in the 1am hour. Tips steadily drop off in the wee hours of the morning.

Why is this happening? Well there are a number of possible explanations for this trend. The most obvious is many of us go to coffee shops and bakeries in the morning where tipping is not as expected. At lunch it’s also common to pick up your order and bring it back to the office. In the late evening, its more likely for us to be eating at restaurants with table service or drinking at bars with open tabs. Not to mention the later it gets, the more likely our math skills suffer from one too many drinks.

Tipping Rates by Day of the Week

tipping-3-simple-insights-tipping-by-day

Tipping is at its lowest on Mondays, then gradually rises throughout the week, peaking on Saturday. This isn’t very revelatory, but it’s fascinating to see the cyclical weekly pattern. The biggest day over day gains are seen on Friday and Saturday. More people head out to bars and dinners out on weekends, so it’s not surprising to see the uptick here.

If you’ve got a question you’d like answered about spending and saving trends with Simple, let us know on Facebook, Twitter, or Google+. Use the hashtag #simpleinsights.

The data in this post is composed of the last 12 months of transactions categorized in the restaurant, bar or coffee shop categories for all Simple customers. Each customer’s average tipping rate was calculated, then aggregated to city and state levels. For time of day and day of week calculations the time the transaction was recorded was used. Tipping rates reported are mean tipping rates, though median tipping rates were close to the mean in most cases.