Spain has got the hang of it: cash payments have been massively replaced by card payments since the pandemic. While this is the path institutions want to take, there is a major downside to this trend. A trend that is devastating for the hospitality industry.
The hospitality industry is massively affected by the fact that more and more card payments are being made in Spain. First some figures from the Bank of Spain; in 2019, 16% of people paid with a card. Whereas, in 2022 this number grew to 30%. Furthermore, this increase seems to be continuing this year as well. On the other hand, we see cash payments decreasing; from 83% in 2019 to 65% in 2022.
Also read: Smishing scam to steal your bank cards details
Tipping for Spanish catering staff is the exception rather than the rule
The hospitality industry is one of the sectors that liked to receive cash payments. There is a clear reason for this, namely the tip. The Spanish newspaper Niusdiario.es writes about catering staff who previously easily collected €100 a day in tips. However, since the pandemic and the crisis, that is sometimes not even €20.
Pandemic and crisis make short work of cash payments
“In the past” – meaning the years before the pandemic – this was really unthinkable. Only a few years ago it was very common to leave a tip for waiters, taxi drivers, hairdressers, depending on the level of satisfaction with the service provided. But when the pandemic hit Spain, no one wanted to touch cash anymore. Moreover, it was seen as an important source of infection.
As a result, large and small companies were forced to accept debit card payments and even the smallest purchases were paid for by card. Since then, tips have also dropped significantly, according to waiters from various restaurants in Spain. According to them, 80%mers no longer tip at all.
What happens if you add an extra tip to the bill?
For the record; tipping is also possible with a card payment, but it is not as easy as it used to be. If you pay a larger amount than the amount of the bill with your bank card, with the idea that the remainder is for the staff, the entire tip will not automatically end up with the relevant waiter.
Paying a tip with a card means an extra commission for the restaurant. It is also questionable whether this ‘extra payment’ is distributed fairly by the owner of the business or whether only a small part (or nothing at all) ends up with the employees. And precisely this has a major impact on the income of the catering staff.
Spaniards experience less financial room for tips
Not only has the pandemic ensured that bills are rarely paid in cash, the subsequent crisis also means that people keep the money in their pockets and simply have no financial room to give an extra tip.
As a result, some restaurants in Barcelona and Madrid have adopted the American way of tipping. A certain percentage is then stated on the receipt, between 5% – 10%, which is customary for the customer to give. But, the customer is not obliged to provide this.
However, this approach has met with resistance. Although this practice is not illegal, it seems to create a sense of guilt in the customer when they decide not to tip. Also, a tip should not be a substitute for a decent wage, a problem that really needs to be addressed within the hospitality industry.
Also read: To tip or not to tip in Spain
