You shouldn’t feel obligated to tip when ordering a coffee or takeout, says Shake Shack founder

• Shake Shack’s founder told CNBC that customers shouldn’t feel obligated to tip on takeout orders.
• Last year, Shake Shack added the option to tip at all its locations.
• More restaurants are prompting customers to tip during payment, causing confusion and frustration.

Shake Shack founder Danny Meyer weighed in on the debate about tipping in the US on CNBC’s “Squawk Box” this Thursday.

Meyer said customers shouldn’t feel obliged to tip when ordering takeout or coffee from a restaurant. 

“If you’re just taking out food, and it was just a transaction, I give you money, you give me a cup of coffee – I don’t think there’s any obligation to tip,” he said. 

This isn’t the first time Meyer has vocalized his disapproval of America’s tipping culture, which has become a hot debate on social media in recent months. 

In 2015, Meyer banned tipping at all of his Union Square Hospitality Group restaurants and raised prices on his menu in what he said was an attempt to give employees fairer wages. This decision was reversed after the COVID-19 pandemic when its restaurants began reopening and rehiring. Meyer founded Union Square Hospitality Group, and while the group doesn’t oversee Shake Shack, it does manage many restaurants in New York City. 

In 2017, Meyer told podcast “The Sporkful,” that tipping was “one of the biggest hoaxes pulled on an entire culture.” He said that tipping was established after the abolition of slavery so that businesses wouldn’t have to pay workers. This mostly affected employees in the service industry, who were predominantly Black. 

According to CNBC, many restaurants use point-of-sale systems like Square and Toast where customers are prompted to tip – either on a tablet or the card reader. This sometimes causes confusion about how much to tip or frustration as patrons feel they have been overcharged. 

Tipped employees like servers are usually paid less than the standard minimum wage. According to the US Department of Labor, the federal minimum wage is $7.25, but for employees who make tips, it’s $2.13 an hour. During the 2020 presidential race, President Joe Biden promised to ban the tipped wage.