Category Archives: Behavioural Economics

To tip or not to tip? That is the question…

The prospect of giving a tip can be one of controversy and is something that has triggered much debate and discussion among friends, family and colleagues over the years. As such, I thought I’d share some views and stories of recent tipping experiences whilst travelling, as the whole concept and the unknown ‘rules’ between different countries is one which continues to baffle me.

Tipping is clearly a point of anxiety for many travellers. The fact that we now see sections in travel guides advising on the appropriate percentage to tip when visiting specific countries shows this is something that plays on peoples’ minds during and even prior to a trip…and I am testament to this! There is nothing more awkward than a bell boy taking luggage up to your room and then hovering around for a few moments whilst you have an internal moral dilemma about how much to give him. And that’s made even worse when you have just arrived in the country you are visiting, unable to think straight after a long flight and haven’t yet grasped the currency break down. Then after some fumbling around you realise you don’t even have any small change. Mega awkward! I wonder if these moments of mild discomfort are intensified because I am British or whether the experience is just as uncomfortable for others around the world?

So, correct me if I’m wrong but I always thought that you tip someone based on how you rate their service and their ability to make your experience in a restaurant, hotel, taxi or whatever it may be painless…perhaps even enjoyable. That’s the way it works right?

Apparently not…

A friend recently told me about how she was asked to pay AND provide a tip upfront when having a manicure done in the states. I get that it would be easier to deal with payment before having wet nails, but how on earth was she expected to decide upfront how much tip she should award the manicurist? Surely a tip is something that should be earned and the amount given should be based on my friend’s judgement post receiving the service and assessing how good the manicure was?

Another friend actually got kicked out of a restaurant in San Francisco because she is Australian and Australians have a reputation for not tipping. She was told whilst ordering drinks that unless she paid $11 upfront (which the waitress described as ‘the worth of her seat’) she would have to go outside. That’s pretty shocking on a number of levels.

Now I know in the likes of America it seems that people in the service industry are not paid particularly well and rely on tips to beef up their wage. But what I don’t think I’ll ever really understand is why they can’t be paid more in the first place to avoid relying on customer donations so the actual cost of something is spelt out from the start. Anything extra should be earned and awarded at the discretion of the customer. Because what really starts to anger me is when customer facing staff don’t provide an adequate level of service but STILL expect a tip.

I was in a restaurant at JFK airport last week and received some appalling service. The waiter pretty much forgot about my colleagues and I to the extent that one of us had to go and get the drinks ourselves, Larry David style. When another waitress walked past with a tray of dirty plates half the food got spilt over another colleague and there was a mix up with orders (among a number of other mishaps). Consequently, when calculating the bill we decided that our waiter did not worthy a tip. After handing back the payment to him and swiftly trying to leave the restaurant (obviously being British and wanting to avoid confrontation) I caught a glimpse of him frowning and adding up the dollars against the bill. He was confirming that we had indeed not given him the tip he somehow felt he deserved for his non existent service and started shaking his head in disbelief. He then turned towards us and gave what can only be described as ‘the look of death’ – not what you want before getting on a plane – leaving me questioning what planet this guy was on if he thought he deserved a reward for his horrific ability to ‘serve’.

I’ve also started to notice on restaurant bills that some places actually dictate how much tip you should give on the bill itself. A few months ago I was actually chased out of a Mexican restaurant in New York for not aligning my tip to the one that was ‘suggested’ on the bill. The service was average at best and the food wasn’t anything worthy of an Instagram upload, so my colleagues and I thought a 15% tip was actually quite generous all things considered. And that is what we decided to award our waiter, despite the bill giving three tip options only with a little check box beside each one for 18%, 20% or 22.5%. This did mean having to calculate the amount ourselves rather than ticking one of the three pre-calculated options, but we were standing our ground here! The waiter clearly disagreed and just as I was opening the door to leave the restaurant I heard heavy footsteps and a voice behind me shouting “maaaam I think you’ve miscalculated this!” I glanced back awkwardly, told him it was perfectly correct based on 15% and left feeling like I’d committed some sort of crime. Ridiculous!

It seems these tipping games are played by lots of people I know and there are actually a number of different ways that people approach the ‘to tip or not to tip?’… or ‘how much to tip?’ dilemma:

The tip Jar approach is most suited to a restaurant type situation and involves setting a maximum amount that you are prepared to tip upfront (say 18%). Then each time something goes wrong during a meal, whether that be a waiter getting an order wrong or forgetting to bring something, a deduction of 1% is made to the final amount.

The pre-tip is something a friend told me their father does from time to time. When checking into a hotel he’ll hand over say a couple of $50 notes and give the simple instruction ‘make it a good stay’. Apparently he has seen this pay off a number of times and has been known to have staff in hotels (clearly thinking there might be more where that came from) running round him as a result.

The tip and run is probably the one that I and most Brits are guilty of. Assessing the service you have just experienced, deciding the amount the waiter or whoever it may be deserves (which is often likely to be lower than they expect) then shooting off as quickly as possible and not hanging around for a confrontation. BEWARE – sometimes this results in being chased out like a criminal.

The reluctant is actually my Ozzie friend’s attitude – she does not enjoy the whole concept of tipping because she feels “putting a five dollar note in a grown man’s hand is like tapping him on the head like a dog” as she describes it.

And my favourite which another friend recently told me about… The just get drunk or Pretend to be more drunk than you are approach to avoid the situation outright. This isn’t necessarily designed to get out of giving a tip full stop, but could help you get away with only giving the amount you feel is deserved by playing dumb to subsequent confrontation or help to innocently justify your inability to add up correctly.

I’m sure many more approaches exist (which I’d love to hear about). But just a final point to end on… I have mentioned how tipping is not really part of the Australian way of doing things. Australians are in fact paid a lot better and the minimum wage is higher than most other countries. As a potential result of this, I think some of the best customer experience I have ever encountered has taken place in Australia. The service over there feels genuine – not just with a potential reward in mind like it is in many other countries. The impact of this actually on some level made me want to be more generous with my tipping for the duration of my trip down under. Go figure!