Frank Sinatra was known for giving serving staff crispy $100-bill tips (€86.1). That was a long time ago when . What are the rules for tipping today, and why are customers confused?
Many people wouldn’t think twice about tipping a waiter in a nice restaurant, the hairdresser, a good bartender or the porter carrying heavy luggage through a busy hotel. These are situations with clear, long-standing norms in many countries.
But what about the barista at Starbucks? Or the person taking your order at a fast-food takeaway window? What about a self-service kiosk?
To tip or not to tip?
Most historians agree that tipping started in medieval Europe with aristocrats handing out gratuities to servants or those who worked their land.
By the 19th century, the idea was disappearing in Europe but had arrived in the US. Later, it was re-exported around the world.
Today, people tip for any number of reasons: To feel better about themselves, to impress others, to help make up for paltry service-staff pay or because they are asked to.
Tipping is primarily driven by motivations to help servers or reward good service, says Michael Lynn, a professor of services marketing at Cornell University in the United States, who studies tipping.
Others tip to fulfill a perceived obligation to tip, Lynn told DW. Still others are more self-interested. These people tip to gain or maintain future preferential service or social approval, said Lynn, who is currently writing a book on the subject slated to be called “The Psychology of Tipping: Insights for Service Workers, Managers and Customers.”
Digital tipping: How did we get here?
Now is changing how and where tips are expected. In the past, a few dollars were left on the restaurant table or was put in the tip jar next to the cash register.
Increased card use, apps and touch-screen payment systems have added tipping options — and more confusion for customers.
“We have seen an explosion in tip requests, though the tip amounts have not changed drastically,” says Ismail Karabas, an associate professor of marketing at Kentucky’s Murray State University.
During the pandemic, many businesses moved further away from cash and , and the point-of-sales companies that provide these digital devices decided to include a tip request.
“The tip request is already embedded in the process, so the businesses have to opt out of this option. Many did not, for various reasons, and then we started experiencing tip request inflation across the board,” Karabas, who specializes in services marketing, tipping and advertising, told DW.
The design of not opting out
When customers are presented with pre-calculated tips of 15%, 20% or 25% what should they do? Just hit one of the buttons and get it over with, take the time to add in their own amount or leave nothing while looking directly at the cashier?
Customers often just choose a pre-set tip option instead of holding up the line. This gives a lot of influence over tipping.
Lynn argues that the question of how the design of interfaces affects tipping is a “hot new area of research.”
“Increasing the ask size of tip options increases the amount given — even though it can decrease the proportion of people leaving a tips,” he said.
Designers have an incentive to make tipping the default option and make it harder to opt out of tipping. Anyone who wants to opt out is forced to fumble around or ask how to do it.
“More tips mean better income for employees, but also for the tech designers because they charge a fee per transaction that goes through their systems,” Karabas added.
What do tippers actually think?
A survey by YouGov done in May 2023 in the US, UK, France, Germany, Denmark, Sweden, Spain and Italy showed that the overwhelming majority of restaurant tippers in these countries would tip 5-10% and not much more.
The US was an outlier with two-thirds of tippers adding 15% or more. The survey also found that many Americans would leave a tip at a restaurant despite poor or terrible service.
Another survey on American tipping culture by the Pew Research Center published in November 2023 looked into tipping and so-called tipflation in the US.
The Pew report found that 72% of adults say tipping service workers is indeed expected more often than compared to five years ago. Additionally, only 34% of the adults polled said it is extremely or very easy to know when it is actually appropriate to tip.
A few tips for tricky situations
How to deal with this new tipping culture? First, know where you are. What is the local situation and how are staff paid. Are they earning a minimum wage where a tip is a gratuity on top? Or do they get a much smaller sub-minimum wage and therefore rely on tips to subsidize their take-home pay?
In some places in the US, this sub-minimum wage for tipped workers can mean earning just $2.13 (€1.84) an hour. Knowing how much people earn can help when deciding if and how much of a tip to leave.
Second, take time to understand the system. Once you know the local norms and wage situation, then you can deal with the actual tipping technology, like calculating what that 25% button really means in dollars and cents.
Don’t be pressured by the line behind you or the group sitting at the table with you — though admittedly this is probably the hardest part, especially if it is a date.
Don’t tip out of guilt either. “Guilt tipping leaves a bad impression on customers, makes them irritated about the request, and less likely to return to the same establishment,” said Karabas.
Finally, as a last resort to avoid confusing or unexpected tip requests, customers should consider paying with cash, says Karabas. That way, everything is in their hands, even if it is a brand-new $100 bill like Frank Sinatra.
Edited by: Uwe Hessler
The post ‘Tipflation:’ The growing pitfalls of proper tipping appeared first on Deutsche Welle.
