Gen Z’s Relationship With Drinking

When Gen Z goes out for a night on the town, they generally no longer keep open a bar tab. Instead, they close out after every transaction, no matter how many times they go up to buy a drink. That’s having a ripple effect across the nightlife economy.

Why It Hits: Gen Z is drinking less than previous generations, while also being more money-conscious than their older cohorts (although that doesn’t always translate into them actually spending less). Those characteristics are fueling some changes at the till that impact not just a bar’s bottom line, but the entire culture of going out with friends.

Between the Drinks: Gone are the days of your buddy proclaiming, “Next round’s on me!”

• NYT found that Gen Zers think keeping a tab open could make them lose track of how much they’re spending, could make them overindulge in alcohol, or not allow them to leave a place quickly if they want to.
• And since most young people don’t carry cash and pay via their phones, closing out every time is as simple as either hovering your device over a point-of-sale terminal or handing your unlocked phone to the bartender.

Closing Out: While closing out after each transaction only takes an extra minute for customers, that’s precious time bartenders need to serve others and keep drinks flowing, especially on a Friday or Saturday night. So, going through the whole payment process after each drink is slowing the whole operation down. That affects how many tips they receive that night.

Additionally, each transaction multiplies the number of credit-card transaction fees that bars have to pay — a typical $100 transaction done as one payment could lead to a $4 fee, while a $100 transaction done over the course of ten payments leads to a $7 fee. That’s money left on the table.

Prediction: To combat the operation slowdown and higher fees, some bars may start enforcing house payment rules that push Gen Z to learn some old-school bar etiquette.