Starbucks (SBUX) Plan to Expand Tipping Could Backfire. Here’s Why

2026-04-02 23:13:59

Starbucks SBUX +0.09% ▲ is giving customers more ways to tip baristas at its store locations, a plan some analysts say could backfire.

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In an effort to boost their remuneration, Starbucks has announced that it is giving customers more methods to tip their baristas and employees. Anyone who orders and pays through Starbucks’ mobile app will be able to tip, as well as customers who scan the app at the register to pay for their coffee.

Starbucks said the expanded tipping, combined with a new bonus incentive plan, could lead to an 8% increase in the pay of baristas and other employees at the company’s more than 35,000 store locations. There’s only one problem with the plan, note analysts. People are fed-up with tipping.

How Consumers Feel About Tipping

A recent survey by Popmenu, a technology leader that serves more than 10,000 restaurants, found that 77% of consumers say that tipping in the U.S. has become “ridiculous.” Two-thirds (65%) of U.S. consumers say that they are fed-up with tipping, up from 53% in 2023.

People who were polled say that tipping has gotten out of control since the pandemic ended and stores and restaurants reopened after the Covid-19 crisis. On average, over the last year, American consumers say they have paid around $150 in tips that they didn’t think were customary or necessary.

The restaurant industry has coined a phrase for the growing backlash, referring to it as “tipping fatigue.” Just because Starbucks provides more ways for consumers to tip doesn’t mean that employee compensation will rise as a result, say some analysts.

Is SBUX Stock a Buy?

Starbucks stock has a consensus Moderate Buy rating among 27 Wall Street analysts. That rating is based on 13 Buy, 11 Hold, and three Sell recommendations issued in the last three months. The average SBUX price target of $100.26 implies 10% upside from current levels.

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