Here's why most people think tipping has gotten out of hand

The key second-order effect is not “less tipping,” but a normalization of labor-cost transparency. If consumers increasingly reject discretionary checkout prompts, operators will be pushed to reprice menus, compress promo intensity, or absorb wage pressure — which is better for firms with pricing power and worse for low-ticket, high-frequency concepts that rely on impulse gratuity to subsidize labor. That shifts advantage toward chains that can spread wage inflation across a broader basket size and away from SMB-heavy restaurant software ecosystems that monetize digital tip flows.

The fastest-moving beneficiaries are likely to be payments and ordering platforms that can reconfigure checkout UX without harming conversion. If tipping screens become a headwind, merchants will optimize for fewer prompts, lower friction, and higher basket conversion; that favors vendors with enterprise menus, loyalty, and stored-value rails, while punishing point solutions tied to tip-enabled workflows. Over 6-18 months, the real risk is that a small behavioral change in tipping becomes a larger change in wage expectations, making labor expense more fixed and less variable across the industry.

From an investor perspective, the market may be underestimating how much of this is a consumer sentiment reset versus a temporary inflation-era annoyance. If consumers accept higher sticker prices in exchange for no tipping, restaurant operators with disciplined menu engineering can actually stabilize revenue quality, but traffic-sensitive formats will struggle if they over-index on price hikes. The disinflationary angle is also meaningful: lower expected tip outlays can free modest wallet share back to discretionary goods, which is mildly supportive for broad consumer spend but not enough to offset margin pressure for service-heavy businesses.