Why leave a tip? You have already received the food and service you are about to receive. Perhaps if you're a very regular customer, tipping could improve future service. But most people leave a tip even if they're stopping at a restaurant in a city they'll never visit again or giving a ride to a driver they'll never see again.
Tim Sablik says of the evolution of chip norms:Hint: From the scourge of democracy to the rituals of America„Over the course of the 20th century, tipping went from rare and stigmatized to an almost uniquely American habit. We still like to complain about it.“eco focus: Federal Reserve Bank of Richmond, Q1/Q2 2024, pp. 18-21).
What's especially interesting about tipping right now is that norms around tipping seem to be in flux. In particular, the pandemic and new technology seem to be fueling the rise in chips. Sablik writes:
According to a Pew Research Center survey released in November 2023, 72 percent of Americans agreed that tips are now expected in more places than they were five years ago. Social media is full of stories of customers being asked to tip on all sorts of transactions they weren't used to doing before, like buying office furniture, going through the drive-thru, and even paying for lunch at the self-checkout. .
Several factors appear to be driving this trend. More and more businesses are adopting more sophisticated POS payment terminals and software developed by companies like Square and ShopKeep. Square reports that in 2022 he processed 4 billion transactions. In addition to making it easy for small businesses to accept non-cash payments, these POS devices also give owners the option of requiring a tip as part of the checkout process. .
There's also some evidence that customers are tipping more during the pandemic. Michael Lin, professor of consumer behavior and marketing at Cornell University's School of Hotel Management, found that: Tipping frequency has decreased In 2021 and 2022 restaurants: chip size It went up. In a separate study of Square data, Lin found that tip amounts also increased at quick-service and takeout restaurants in 2020 and 2021. Lin and colleagues hypothesized that many Americans felt more compassion for service workers during the height of the pandemic. , urge them to be more generous. This experience, combined with inflation during the post-pandemic recovery, gave businesses even more incentive to tip.
If norms around tipping are indeed in flux, it wouldn't be the first time. The standard history is that chips originated in Western Europe, were brought back to America by American tourists in the late 19th century, and are now largely obsolete in Europe, but well established in America. Sablik provides a vivid overview of previous chip standards.
His 1998 book Tipping: An American Social History of Tipping, historian Kelly Segrave places its origins in the Middle Ages. In 16th century England, wealthy travelers who came to stay at a friend's house would hand over money to their host's servant. These sums, known as bails, were intended to reward servants for taking on the additional task of looking after guests in addition to their normal duties.
This habit grew rapidly. As travelers grew increasingly frustrated, domestic servants came to expect and even demand bail. Segrave pointed out that by the 18th century, even the British royal family was complaining that bailing was making it more expensive to stay with friends. Hotel staff reportedly even threatened guests who refused to pay. An unfriendly guest might spill food on the dinner table or come across an injured horse in the stables. Some nobles reduced their travel to avoid the problem altogether, while others tried to band together to abolish this practice. Such efforts met with fierce resistance. In 1764, a meeting in London to discuss the ban on bailing was interrupted by a servant throwing a stone through a window in the meeting hall.
Tipping was not welcomed as it spread to the United States.
Still, as chips became more widespread in America, they continued to face fierce opposition. Labor unions in the early 20th century frequently opposed this practice, feeling that it prevented them from paying workers a fair wage and made them overly dependent on the whims of customers. Business owners, especially hoteliers, were also concerned that the sudden increase in tipping demands would annoy guests and drive them away. Some hotels have something called a servidor installed on the door of the guest room. This is a compartment that can be opened from both sides and allows hotel staff to leave their cleaned laundry, allowing guests to leave their laundry in the room without having to meet staff or be asked to tip. I was able to take it out.
Between 1909 and 1915, six states (Arkansas, Iowa, Mississippi, South Carolina, Tennessee, and Washington) took things a step further and passed laws criminalizing the solicitation and provision of tips. Violators were subject to fines and, in the case of South Carolina, jail time. However, the law proved ineffective and was largely ignored. By the 1920s, they had all been abolished (or, in the case of Iowa, overturned by the state Supreme Court).
In modern times, many restaurants in the United States have experimented with adding mandatory tips to the bill. This step is understandably popular with restaurant owners, who can decide how the money will be paid. Generally, this is unpopular among those who should receive more tips, as well as among customers who act as if tipping is mandatory but prefer to think of it as optional. In most cases, a combination of dissatisfied customers and (at least some) dissatisfied employees has killed off experiments with no-tipping policies.
I liked the comment at the end of Sablik's article. Michael Lin, who conducts research on tipping, was asked by Sablik, „Who benefits from tipping?'' Lin replied: „People who tip poorly…are subsidized by those who tip.“ That's plausible, but is it really that simple?
If you want to learn more about the economics of tipping, the following starting points can be helpful. Ofer H. Azar “The Economics of Tipping” Published in the Spring 2020 issue Economic Outlook Journal (I work as the editor-in-chief.)