Apr 18, 2020 - Economy & Business

Some customers tip more generously as coronavirus slams service sector

Restaurant posts "open" sign during coronavirus pandemic

Photo: David L. Ryan/The Boston Globe via Getty Images

Some restaurants and other businesses, primarily in the service sector, are seeing spikes in tips as the coronavirus pandemic stalls the U.S. economy.

Why it matters: The restaurant industry has been hit hard as mandated dining area closures have forced businesses to restructure operations. Many workers rely heavily on tips, so the uptick in discretionary gratuity can help make up the difference.

The state of play: Matthew Danna, co-founder and CEO of Boulevard Labs Inc., a software provider to salons and spas, told the Wall Street Journal, "Historically, the only time we’ve seen gratuity rates shift this much is during the week before Christmas, when clients are feeling extra generous and thankful to the professionals that help them look and feel their best all year long."

  • The average tip for a pizza pickup in the U.S. was $5.32 in the second week of April, a 40% increase in what pizzerias saw in late February.
  • Instacart, a delivery service, said its drivers received tips in mid-March that were 30% higher on average than four weeks prior.

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