Expert Advice: Some tips on tipping

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Joseph C. Miller is an assistant professor of marketing in Saunders College of Business. He holds a Ph.D. in marketing from Michigan State University, an MBA in marketing and finance with a graduate concentration in economic development from Wayne State University and a bachelor’s degree from Grand Valley State University.

Having recently done research regarding “tip jars” (jars typically posted in the area of cash registers in fast-casual restaurants) with my students in marketing research classes, I have become acutely aware of some of the pervasive attitudes and cultural norms as applied to tipping in the general sense, as well as the special application of tip jars. Because of my work in that arena, I would like to give six tips on the nature of tipping—five geared toward the tippers (the customers), and one big one toward the tipped (the service workers).

Customers

1. Recall the ideal, recognize the reality—Ask people what their general philosophy is on tipping and the vast majority of responses will reflect that people believe that tipping is done in response to appreciating the server’s efforts or for excellent service quality. To a lesser degree, however, fewer people will recognize that tipping is something that is done because it is part of our cultural norms—and those people would be correct. Tipping is an act that is deeply embedded in the American service industry. Be aware that many in the service industry rely on tips as part of their income. Recent research indicates that up to 40 percent of coffee barista salaries are generated from tips, hotel bellmen and valets up to 75 percent, and for restaurant wait staff and bartenders, money from tips represents 85 to 100 percent of their income.

2. Not a global phenomenon— Anyone who has ever read or heard insights from foreign travelers to the U.S. knows that our standard of tipping is confounding to many outside observers. Be sure to research local customs when traveling abroad. Instead of our norm of tipping, restaurants in South America and some European nations often tack on service charges to customer tabs. In other European nations, the norm is a 10 percent tip. China typically has no cultural norm of tipping at all, and in most restaurants in Japan, tipping is often seen as insulting to the server—a message indicating that the server needs money because they are so bad at their job they will soon be terminated. And virtually no nation save the U.S. extends the tipping norm to taxicab drivers, hairstylists or delivery workers.

3. Reward specialization—Typically, you will want to tip people particularly well (perhaps even above and beyond the accepted cultural norm of 20 percent for good service) when they take time out of their normal work operations in order to make something special for you, such as the bartender who arranges a fancy mixed drink, or a waitress who serves you a delicious dessert to your exact specifications, or a taxicab driver who sacrifices other fares while helping you with your bags. The delivery guy giving you that toner cartridge from Amazon could probably do without a $5 tip, but the deliveryman who sets up your new armoire in your boudoir needs to be recognized well.

4. Factors other than quality— Some of the previous research by tipping expert Michael Lynn seems to support the notion that how good a service customers think they were provided in a transaction is a poor predictor of how much money they leave for a tip. That’s an important takeaway for consumers, because they have to realize that their propensity to tip is predicated often not on the service received, but how connected they might feel to the person performing the service. Research reveals that servers who are the opposite gender of the customer and those who lightly touch the customer tend to receive greater tips, for instance. It’s important for customers to be aware of their propensity to ascribe a bias to their tipping behavior.

5. Restaurant tips affect workers you don’t see—One thing restaurant patrons often don’t realize is that when they leave a tip for restaurant wait staff, that server must then “tip out” other staff like bartenders, busing staff, hosts and others. So if you find yourself dissatisfied with a service, it’s probably the best policy (unless your bad service was personal) to tip the standard amount and then speak to the manager. Also, if you leave no tip, or a very sparse tip, please do the courtesy of explaining to the server why. Communication with the people who serve you is a part of the new social bargain.

Service workers

Provide memorable experiences—Having said that, when you ask people to recall a time in which they have donated to a tip jar (an act that is not as ingrained in the social rubric as traditional tipping), they will not hesitate to describe a time in which they were treated to a special kind of service experience. Making each customer feel as if they are individuals instead of monolithic buyers will go a long way toward boosting the experience component of the transaction. Reports from wait staff indicate that some rock-solid means of increasing tips are to: Introduce yourself by name; sit or squat to get at eye-level with customers when they place their order; and bring candy when you present them with the bill.

Oh and by the way, thinking about the customer experience isn’t just for wait staff and bartenders. We can all get better results in all of our relationships, be they firm-client, buyer-seller, or spouse-to-spouse, when we take into account the perceptions of the other. Invoking a little emotional intelligence into our relationships will provide us with “tips” in perpetuity.