Monday, 1 February 2010

Why we tip and how to get a bigger tip

Stats from the USA suggest that $40 billion is spent on tips every year. Yet from the traditional economic perspective, which sees us as rational agents operating in our own interest, tipping waiters, barbers, taxi drivers and other service workers is crazy. You don't have to so why do you? That's if you do. Not everyone does. In an effort to explore our motivations for tipping, Stephen Saunders and Michael Lynn sent out 29 fieldworkers to survey 530 South African citizens after they'd had an encounter with a car guard. These unpaid workers are a common sight in South Africa at shopping centres, hospitals and schools. They help with parking, protect the car from vandalism and assist drivers with loading shopping and luggage.

One explanation for why we tip is that we're trying to encourage good service in the future. However, Saunders and Lynn found no evidence that people who used a car guard more were more likely to tip, as you'd expect if this were their true motive. By contrast, perceived service quality was associated with both the likelihood of giving a tip and the amount tipped, thus suggesting that participants were using tipping as a form of reward. Similarly, those who said they thought it was important to help others in need tended to tip more (although they weren't any more likely to tip), suggesting altruism was another motive. Finally, social norms were a key factor - participants who said their friends and relatives thought it was important to tip were more likely to tip themselves, especially if there were more people with them at the time of questioning. Size of tip was not associated with this factor, perhaps because it's only the act of tipping that's visible to others, rather than the amount tipped.

'Hopefully this paper will encourage more economists to look beyond the apparent irrationality of tipping and to study it from both a behavioural economics and psychological perspective,' the researchers said.

In a separate study, based in Utah, John Seiter and Harry Weger tested the effects of ingratiation on food servers' tips. They had two waiters and two waitresses go about their usual duties but with a twist: for half the parties they served they were instructed to compliment the customers, telling them that they'd made an excellent choice in what they'd ordered. Counting the tips received from 348 dinner parties showed that complimenting customers on making a shrewd order led to tips that were three per cent greater on average than when no compliment was made - a statistically significant boost.

'A roughly 3 per cent increase may seem a small amount,' the researchers said, '[but] an additional $1 to $5 per shift could translate into hundreds of dollars per year for each food server.'

More in-depth analysis showed that complimenting customers on their order only led to bigger tips for parties of two to three people. It made to no difference with a party of four and actually led to smaller tips for groups larger than this (the research involved parties of up to seven). It also turned out that one of the waiting staff had received smaller tips after complimenting customers (even though the group average was for larger tips in this condition). Seiter and Weger surmised this could be because she didn't come across as sincere.

This study builds on earlier research showing that use of mimicry, light touches on customers' shoulders, happy faces on the bill and squatting to customers' eye level can all help provoke larger tips.

ResearchBlogging.orgSaunders, S., & Lynn, M. (2010). Why tip? An empirical test of motivations for tipping car guards. Journal of Economic Psychology, 31(1), 106-113 DOI: 10.1016/j.joep.2009.11.007

Seiter, J., & Weger, Jr., H. (2010). The Effect of Generalized Compliments, Sex of Server, and Size of Dining Party on Tipping Behavior in Restaurants. Journal of Applied Social Psychology, 40 (1), 1-12 DOI: 10.1111/j.1559-1816.2009.00560.x

Post written by Christian Jarrett (@psych_writer) for the BPS Research Digest.


Anonymous said...

Why do people feel that it is necessary to point out that making 3% more a day, when extrapolated to a yearly basis, is a "large" amount of money?

Its a 3% increase, we get it, its not huge.

Anonymous said...

Good thing researchers don't work for tips, cause these guys would get nothing.

They site two studies. One is of Car Guards in South Africa. This is a category of worker that seems like it might be unique to this area. Most tips are given to people who have a job (waitors, cab drivers, bellhops) as opposed to these kinds of freelancers, and it would seem that there are a bunch of social factors that would apply to the car guards that wouldn't to waitors, etc.

Then there is another survey that measured one particular thing among 350 parties and showed a difference of 3%, but look at all the holes in the research.

First, is telling a customer than they made an excellent choice really effective ingratiating? If a server tells me something nice about me, that's flattery, but telling me that I picked a nice item off the menu is less personal. Besides, what if you tell me that and the item is only so-so. I admit, I like it when a waitor tells me I made a good choice, but I'm far more impressed when a waitor goes out on a limb and tells me that perhaps there is something I would enjoy better.

And it's no wonder this works better with a party of two than with six. If you tell two people they made excellent choices, it's beleivable. If you say the same thing to six people, it sounds like something you say to everybody.

This article has zero value to tippers or tip receivers.

Anonymous said...

BEING NICE is a Good thing- Thats My Tip.
Also Leaving a tip is Common sense,esp when the servers are Nice.
Minimum-for minumum service Max for MAx Service.
We all know cheap rich ppl + Generous poorer ppl.
So its Personality that a Big Factor too.

Anonymous said...

Who looks after the rights of the car guards that work for a person.They do not get a contract of employment, live off what tips people give them and have to pay a daily fee to the person in charge to work.

Anonymous said...

Honestly, depending where servers get paid crud, below minimum wage and are allowed to because the government believes their tips count as income, so saying that's what they get paid for is false, yes they get paid to take your order and modify everything, and act as a waiter, but some people completely abuse!
I'm a cashier at a restaurant and was running food when this table literally stopped me and kept asking me for hot sauce, side of rice, ketchup, and beer, I'd return with something and got asked something else I DO NOT GET PAID TO DEAL WITH YOU.
so next time if you don't want to tip go to McDonald's or del taco, that's the difference, go out to a nice restaurant, expect to pay for it.

Anonymous said...

I work for tips as a pizza delivery driver, I've had years of experience and on average, I make twice the amount of the other drivers on any given night. It still amazes me what some people think is an acceptable tip. We make $5.50 an hour, and we have to claim our tips up to the minimum wage in our state. We also get compensated for gas, which is not nearly enough to cover the gas we use. We also are not covered by our insurance companies for delivering pizza, nor have I ever heard of a company that has an Employee Non Ownership Liability Endorsement. We take a huge risk everyday to drive your food from a restaurant straight to your front door, a little gratuity isn't really too much to ask for. I think the biggest thing is to educate people, there are far too many people out there like Steve Buscemi's character in Reservoir Dogs.

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