The culture of tipping is widespread in many countries around the world
As BBC notes, the concept of "tips" originated in England in the 16th century. It was then that the British developed the tradition of tea drinking, and if guests stayed overnight at the host's house, they left money for his servants.
The phenomenon of tipping has long aroused genuine interest among economists: after all, paying extra, especially when we are not legally obligated to do so, seems to contradict our personal interests?
If you travel a lot, you probably know that each country has its own rules on this matter. In the United States, it is customary to leave a waiter or waitress 15-25% of the bill, in Brazil – 10%, and in Sweden – 5-10%.
The culture of tipping in the East differs markedly from that in the West. In particular, the situation with tipping in Japan is not obvious. The generally accepted view is that tips are not left in this country. If you leave a coin on the table when leaving, there is a high probability that the waiter will rush after you to return the "forgotten" item.
"Research shows that nations that score high on the extroversion scale leave more generous tips," notes Michael Lynn, professor of hospitality management at Cornell University. The practice of tipping falls within this scholar's field of research.
However, specific traits of national character are not the only reason why some countries have a tradition of materially thanking for service, the professor believes. Social norms, differences in salaries, and the tradition of paying extra for service play a major role here. In addition, the way the tipping system works can also be influenced by the practices of other cultures. For example, a 2016 study showed that after returning from trips to the United States, people changed their habits and left larger tips.
"The practice of additional monetary reward is certainly linked to the economy, but it is based on social norms," notes Edward Mansfield, a professor of international relations at the University of Pennsylvania and author of the mentioned study. According to Professor Lynn, there are quite specific reasons that make us leave tips. It could be an attempt to motivate staff to serve you better next time, a desire to thank for good work, or to gain approval from others. However, the main factor, as Lynn's research showed, is the desire to comply with established rules and avoid judgment.
The reasons that prompt us to leave tips determine when and for which services we are willing to give them. For example, those for whom tipping is a confirmation of their own social status more often leave tips for services where it is not very customary to tip – for example, for the work of an auto mechanic or a veterinarian. Those for whom the main motive is a desire to thank the staff leave tips to representatives of all professions, especially those who rarely receive tips. And those who leave tips "out of duty" usually do so only in generally accepted and long-regulated situations – for example, for parking a car.
Sometimes restaurants include a recommended tip amount on the bill, which can reach 20%. Offering a tip higher than the socially accepted norm often repels customers, and in this case, the majority may leave nothing at all. However, those who do tip often leave more than recommended on the bill – and as a result, waiters receive significant compensation, explains Professor Lynn, who used a mobile app to track the amount of tips left by customers at a laundromat.
However, can this practice be considered correct, appropriate, and even fair? It all depends on the point of view, Lynn explains. The government undoubtedly benefits from a ban on tipping, because it is cash turnover that the state can neither control nor tax. However, service workers live better in a society where tipping is customary.
"For example, waiters in New York restaurants earn about $30 per hour. Meanwhile, cooks [who do not work directly with customers] in the same establishments earn half as much," says Lynn.
"One might think that tips make waiters' salaries unjustifiably high," he comments. However, from the restaurateur's perspective, tips allow them to pay staff less and therefore set lower menu prices. On the other hand, establishment owners do not have access to the tipping system and cannot redistribute tips among other employees.
Tipping policy also affects customer attitudes. For example, one study showed that restaurants where the tip amount is included in the bill received low ratings in online reviews. "By offering tips, customers hope to receive higher quality service. In addition, in restaurants without tips, the service charge is either included in the bill, which customers do not always like, or in the menu prices, which immediately makes the restaurant more expensive," Lynn explains.
This rule, however, does not apply to premium restaurants, the researcher adds. Elite restaurants that included service in prices did not suffer from customer outflow. "The point is that in expensive restaurants, service must by definition be top-notch, even in those where tips are not provided. In addition, elite restaurants are usually small, with one waiter serving fewer customers, and therefore it is easier for management to ensure that waiters perform their duties conscientiously," says Professor Lynn. Moreover, wealthy patrons of such establishments are generally not concerned about higher prices. Additionally, they often travel to other countries and are not surprised, for example, when they pay exactly the bill amount at a restaurant.
Despite these difficulties, some establishments are still trying to do away with tips, as the New York restaurant chain Union Square Hospitality Group did. The goal was to increase the salaries of staff not directly involved in customer service and to create a clearer career advancement system. Implementing the new strategy proved more difficult than expected. However, visitors to this restaurant chain gradually accepted the changes, and staff turnover decreased. According to management, in the long term, eliminating tips will definitely bring benefits.