Tipping As a Consumer Behavior: a Qualitative Investigation

John A. McCarty, University of Illinois at Urbana-Champaign
L. J. Shrum, University of Illinois at Urbana-Champaign
Tracey E. Conrad-Katz, University of Illinois at Urbana-Champaign
Zacho Kanne, University of Illinois at Urbana-Champaign
ABSTRACT - The present study investigated the consumer behavior of tipping in the restaurant context. The methodology involved depth interviews with waitpersons in a representative sample of restaurant categories (diners, four star restaurants, etc.). Tipping was perceived to be a function of individual factors of the consumer, quality of service provided, and situational factors. Knowledge of the tipping custom was perceived as the primary individual factor that affected tipping behavior. Quality of service was discussed in terms of actual service provided and rapport with the customers that enhanced the dining experience. Situational factors included size of party and perceived social pressure to tip well in front of others.
[ to cite ]:
John A. McCarty, L. J. Shrum, Tracey E. Conrad-Katz, and Zacho Kanne (1990) ,"Tipping As a Consumer Behavior: a Qualitative Investigation", in NA - Advances in Consumer Research Volume 17, eds. Marvin E. Goldberg, Gerald Gorn, and Richard W. Pollay, Provo, UT : Association for Consumer Research, Pages: 723-728.

Advances in Consumer Research Volume 17, 1990      Pages 723-728

TIPPING AS A CONSUMER BEHAVIOR: A QUALITATIVE INVESTIGATION

John A. McCarty, University of Illinois at Urbana-Champaign

L. J. Shrum, University of Illinois at Urbana-Champaign

Tracey E. Conrad-Katz, University of Illinois at Urbana-Champaign

Zacho Kanne, University of Illinois at Urbana-Champaign

ABSTRACT -

The present study investigated the consumer behavior of tipping in the restaurant context. The methodology involved depth interviews with waitpersons in a representative sample of restaurant categories (diners, four star restaurants, etc.). Tipping was perceived to be a function of individual factors of the consumer, quality of service provided, and situational factors. Knowledge of the tipping custom was perceived as the primary individual factor that affected tipping behavior. Quality of service was discussed in terms of actual service provided and rapport with the customers that enhanced the dining experience. Situational factors included size of party and perceived social pressure to tip well in front of others.

These exploratory findings will lead to future qualitative and quantitative research on this neglected consumer behavior.

INTRODUCTION

The custom of tipping is very prevalent in American culture, as it is in many other cultures. In spite of this, there has been little academic work on the custom; virtually none has appeared in the consumer behavior literature. The custom of tipping is of potential interest, however, for a variety of reasons. First, tipping represents a direct exchange between the consumer and the service provider. The act of tipping does, therefore, represent a consumer behavior and one in which almost everyone engages at some time. Secondly, tipping represents the major source of income for individuals in many service industries, therefore, it is a consumer behavior of enormous importance in the economy.

The third and perhaps most important reason why tipping should be an area of research activity relates to the inherent uniqueness of the behavior. Tipping is one of the few areas of the economy where the exchange is dictated by informal rules of custom rather than explicitly stated procedures. While there are certainly other instances where informal rules dictate the exchange (e.g., the interchange at a swap meet (Belk, Sherry and Wallendorf 1988; Sherry 1988) or the purchase of a used car), these tend to be less prevalent than tipping. For most goods and services, the rules of exchange between buyer and seller are clearly known by the participants. Prices are ordinarily stated explicitly and the time and method of payment are known. In contrast, the custom of tipping is guided by informal rules and norms. While suggested amounts of tips and who should be tipped are indicated in books on etiquette (Post 1975) and on tipping (Star 1988), these are particular individuals' perceptions of the custom and many people are unaware of these sources.

Tipping is also unique as a consumer behavior because the payment for a service is set by the consumer rather than the service provider. While the informal rules suggest an amount or percentage to tip, how much to tip is still the choice of the consumer. Therefore, price, which is often used as a cue to quality for most services (Zeithaml 1981), cannot be used for tipped services since the consumer determines the price of the serVice.

For these reasons, tipping represents a viable and interesting area of study for consumer behavior. The current study will present some of the literature on this custom as well as an analysis of interviews conducted with waitpersons in the restaurant industry. These interviews represent preliminary findings of the current authors' research program in progress. While the analysis of these interviews leads to tentative conclusions, they are also considered by the authors to be a first step towards more qualitative and quantitative work.

The Origins and Prevalence of Tipping

The origins of the custom of tipping are not entirely known, although the custom dates back to at least 18th century England where boxes were placed in inns and coffee houses in which people could place coins (Lynn and Latane 1984). Signs affixed to the boxes stated ':lo Insure Promptness," thus the supposed origin to the term "tip." Star (1988) indicates that the custom may date back to early Rome. If one equates tipping to a type of a bribe for special attention (in some countries, the same word is used for tipping as for bribing, Shamir 1984), it is indeed likely that some form of the custom has been around for as long as people have used money as a method of gaining special attention.

Tipping likely evolved as a bonus to wages, provided in an effort to garner better service. In this sense, it was a small bribe that was accepted by servants who were otherwise poorly paid. Over the years the custom has become more formal, although far from having the explicit rules of other areas of the economy. As etiquette books developed, such rules were recorded and presented in a manner to suggest that tipping is a proper behavior for cultured individuals. Furthermore, as services have become more prevalent, tipping has become recognized as a method of payment for many service employees and therefore not considered the "bonus" that it once may have been.

Tipping is relatively prevalent in the United States and books on etiquette have, through the years, indicated the degree to which someone should tip in various situations. The earliest book on etiquette by Emily Post (1922) mentions that a waiter should be tipped about ten percent. Later books by Post indicate levels of tipping for different situations (e.g., how much is tipped in a smorgasbord restaurant) and that 15 percent is the appropriate amount in a typical restaurant situation. Indeed, an examination of the books on etiquette since Post's first book indicates a degree of formalization of the custom in our culture with the rules having become more explicit in recent years (Post 1922; 1931; 1945; 1975; Towne 1939). The 1975 edition of Emily Post's book includes a separate chapter devoted to tipping in a variety of situations .

Literature Review

There is a paucity of research on tipping considering the prevalence of the custom and the research that does exist is spread rather thinly across several disciplines, primarily sociology, organizational behavior, and psychology. In general, the focus of sociological and organizational research has been on the employee in the exchange relationship and his or her perceptions of the job (satisfaction, autonomy) as a function of this form of payment. William Foote Whyte's (1948) extensive study of the restaurant industry indicated that tipped employees tended to believe that the custom was responsible for their feelings of inferiority relative to the customer. Analysis of the sociological literature by Shamir (1984) confirms this perception of status difference by tipped employees. Research by Butler and Skipper (1980, 1981) showed that waitpersons were more satisfied with the tipping arrangement when they were provided with autonomy by the organization for which they work. The less control employees had over their work situation and the more surveillance exerted by management, the less they were satisfied with tipping as a method of payment.

A study by Shamir (1983) investigated job satisfaction, perceptions of the relationship between performance and pay, attitudes toward customers, and role conflict among tipped employees and those not receiving tips. It was found that tipped employees perceived a greater relationship between pay and their performance compared to the perceptions of non-tipped employees. Shamir also discovered a greater tendency among tipped employees to take the perspective of the customer and to perceive more conflict between the demands of customers and the demands of management. He speculated that this relates to the direct reliance of the tipped employee on the customer for their pay.

Psychological investigations of tipping have tended to use tipping as a dependent measure in field experiments with the intent of lending ecological validity to phenomena previously investigated in laboratory settings. Seligman, et al. (1985), for example, investigated the link between attributions and subsequent behavior, finding that persons believing that a late delivery of a pizza was the responsibility of the delivery person tipped the delivery person less than those who were led to believe that the late delivery was caused by factors beyond the control of the delivery person.

Several have investigated group size and tipping behavior (Lynn and Latane 1984; Snyder 1976), finding that the larger the party, the smaller the tip on a per person basis. This phenomena was explained as diffusion of responsibility (the more people present, the less responsible each feels for the tip, Lynn and Latane 1984) and equity theory (the larger the party, the less energy a waitperson has to expend on each person at the table, Snyder 1976).

Lynn and Latane's (1984) study related tipping to numerous other factors in addition to group size. These authors found that tipping was related to customer's gender (men tipped higher than women), method of payment (credit card customers tipped higher than those paying cash), and per person bill size in some cases (the larger the per person bill size the smalls the percentage tipped on the total bill, although this differed as a function of type of restaurant). Tipping was not found to be related to the atmosphere or food of the restaurant, the waitperson's gender, or the waitperson's efforts, nor was it related to customers' perceptions of  service quality. However, other research (May 1978, cited in Lynn and Latane 1984) indicated that tip size was related to the number of non-task visits by the waitperson, although not related to observers'  independent ratings of service. In a different line of  research, investigators have found that merely  touching the customer had an effect on the size of tip received by the waitperson (Crusco and Wetzel 1984; Stephen and Zweigenhaft 1986). These latter studies seem to indicate that tip size may be related to the rapport (visits to the table, touching) between waitperson and customer.

Purpose of the Study

The present study represents an initial exploration of the custom of tipping from a consumer behavior perspective. The academic literature on tipping raises some interesting questions, although this literature does not exist as a coherent body of work on the behavior of consumers. The present authors felt that the subtle aspects of the custom could best be investigated initially through a qualitative study involving individuals who interact most directly with consumers, namely restaurant waitpersons.

The academic literature on tipping and anecdotal information guided the authors in outlining general areas to be investigated. The most general area addressed was the waitpersons' overall feelings about the custom and their receptivity to alternative methods of payment for their services. The interest here was in their satisfaction with the exchange as a consequence of the behavior of the consumers.

Much of the academic literature has dealt with the factors that affect tip size and this was the second area of concern. The literature seems to indicate that characteristics of the customer as well as situational factors (size of party, etc.) affect tip size and these were addressed in the current study. In general, tip size has not been found to have a strong relationship to service quality. This counterintuitive finding was thought by the authors to need further scrutiny, particularly in light of the findings that suggest that attention by waitpersons (trips to the table, touching) do relate to tip size.

Shamir's (1983) research showed that waitpersons experience a certain amount of role conflict due to their direct reliance on the customer for their pay. Other work has indicated servers are placed in a subservient position relative to the customer which may led to feelings of inferiority. These findings prompted an interest in waitpersons' relationships with the consumers and this was yet another broad area of concern.

Finally, the authors felt it would be useful to investigate the behavior of waitpersons when they are in the role of customer. Therefore, an additional area of interest related to the tipping behavior of waitpersons when they dine out.

METHOD

Informants

A non-random sample of informants was selected for this project. Restaurant waitpersons were selected such that the following criteria were met: 1) a broad range of work experience (from less than one year of experience to over twenty years), 2) a broad range of age (early twenties to mid forties), 3) a broad sampling of restaurant class (diner, four-star, continental, etc.) and 4) a varied geographic representation (small, medium, and large cities predominantly in the Midwest). A total of thirteen interviews were conducted.

Data Collection and Analysis

Data were collected through personal interviews. The venues for the interviews varied, some occurring in the homes of the informants, others occurring at the restaurant. Audio recorders were used to document the interviews, along with supplemental journal notes made by the authors. The data were then transcribed for subsequent analysis.

Although the interviews were purposeful and positivistic, every attempt was made to keep them as unstructured as possible. Consequently, no set script or series of questions were followed; rather, general topics of interest were pursued. The interviewers did not go into the interview process with specific a priori assumptions or propositions to be tested, but certain areas of inquiry (previously described) were discussed by the interviewers prior to data collection. In order to allow for nonpreconceived themes to emerge as well, care was taken to allow the informants the utmost freedom to take the conversation or interview in whichever directions they desired.

General standards for the analysis of qualitative data were followed. It should be noted that the analysis of this type of data is not a distinct process completely separable from data collection, but occurs continually throughout the collection process. The primary analysis involved thematic interpretations based on the collected interviews. These interpretations resulted initially from individual analysis of the transcribed data, followed by a discussion among the interviewers of emerging patterns and themes. Once patterns and themes were identified, they were assembled and a search for contradictions to these findings was conducted. Judgments were then made as to whether the themes were strong enough to stand alone; if they weren't, they were rejected.

RESULTS AND DISCUSSION

The interviews with restaurant employees yielded a rich body of data. The current discussion will deal primarily with themes that relate to the behavior of the consumer and the attitudes and behavior of the waitpersons that have a direct bearing on their relationship with the consumer. These themes are classified by the general headings that follow. (Some themes dealt with the waitpersons' relationships with management and these will not be presented here).

Waitpersons' Shared Culture

It was apparent from the interviews that tipping is something that virtually every tipped employee in the restaurant business thinks about a lot and discusses with fellow employees. As many said, it will often be the topic of conversation during breaks or after work. Consequently, there was a great deal of consistency across interviews in terms of what was discussed. It is unclear therefore, to what extent any individual informant's comments reflect his or her own observations versus a report of these shared beliefs. Most informants admitted that conversation often centered on the tipping behavior of various customers, and also admitted to making certain value Judgments about the customer based on the size of the tip. It is important to note, however, that many of the respondents would tell the interviewers of a shared belief, then explain how their own experiences have deviated from this folk wisdom. This was particularly true of their beliefs about what kind of customers tip well.

It is ironic that tipping is constantly on the mind of restaurant employees and is discussed among them frequently, yet it is rarely discussed with customers. To a great extent, the custom seems to dictate that one cannot directly confront a customer about a bad tip. Also, it was evident from the interviews that most restaurants have a stated or unstated policy concerning this. Even if not restaurant policy, the employee culture dictates that they not talk about tips with customers. Therefore, one side of the exchange, the service provider, thinks about tipping a lot, yet is powerless to "educate" the other party in the exchange, the customer.

Factors Affecting Tipping

The informants indicated that they believe several factors affect the amount tipped. The waitpersons interviewed tended to perceive the amount of their tip to be a function of the customer (some people simply tip more than others) as well as 8 function of their own performance. Therefore, contrary to previous findings, waitpersons believed the quality of service does affect tip size. Further, situational factors were seen as playing a significant role in the size of the tip. Informants indicated that the same person may tip differently in various situations. For example, a person may not tip well when alone, yet tip a greater percentage when with others

Beliefs About Customers

According to the informants, there are stereotypes about kinds of restaurant patrons in terms of who are good tippers and who are not. This seems to be a part of the folk wisdom among the people in the industry. For example, it is generally held that a table of older women are the worst tippers. What is interesting, however, is that in spite of these shared stereotypes, most waitpersons indicated that one never knows who is going to tip well. They indicated that they may size a customer up when he or she sits in their station, thinking about the kind of tip they will get from the individual or party. Many mentioned that they were often surprised. For example:

Interviewer: "Are there any rules of thumb that you can use to determine if someone is going to be a good tipper?"

Informant: "No, you'd be surprised. Its something that we talk about at the restaurant occasionally. That you can't ever peg a customer. And you really shouldn't try to because you'd be surprised in the end who's going to tip and who isn't. And sometimes by stereotyping or pegging, you end up getting the kind of tip you expected because subconsciously or consciously you end up giving worse service because you expected it."

The respondents tended to attribute poor tipping on the part of someone to a lack of knowledge. Therefore, even if they believe one of the stereotypical beliefs, such as gender and tipping, they attribute it to people not knowing any better. Several informants, for example, mentioned that older women do not tip well because they are used to their husbands paying, however, younger working women tend to be good tippers.

This lack of knowledge on the part of many customers is obviously a point of frustration for tipped employees. Many indicated that customers simply do not understand that waitpersons are paid less than minimum wage and must rely on the tip as income. They are often frustrated because they have little recourse if they are not tipped well. This indicates that tipping has evolved from being a "bonus" for extra service to the main source of income for these employees.

Relationships With Customers

Contrary to earlier findings, informants did not seem to view tipping as reflecting any status difference between them and the consumer. While they may at times feel inferior to the customer, it does not appear to be the case that tipping per se causes this feeling. This finding is inconsistent with previous research. This inconsistency may be related to the increase in services in our culture. To serve or wait on someone in a business establishment is more prevalent than in previous years. Furthermore, it is likely that individuals who are tip recipients have higher status now than forty years ago when Whyte was engaged in his project. There are fewer class distinctions with the burgeoning middle class. Restaurant employees include students on their way towards another profession, as well as aspiring actors and actresses, etc. Moreover, our interviews tend to show that waitpersons perceive the tip as their pay rather than an act of a superior to an inferior.

Another aspect of waitpersons' relationships with customers that was apparent from the interviews is that tipping places them in a liaison position between customer and management. This seems to be true since their pay is directly dependent on their relationship with the customer. This is consistent with the findings of Shamir (1983) who found role conflict among tipped employees. It is clear that waitpersons act as advocates for customers on occasions such as returning food or getting something taken off the check if the customer did not like it. This liaison or "middleperson" relationship is evident from the following:

"It's like now you're a sub-contractor, you know, you go in and work for this guy but you really have your own little business in there and how well you do is a reflection of Your abilitY at your job . . ."

"The service person is the link between that customer and the cook and management and it's their job to make sure that person's satisfied. So if something happens in the kitchen to screw things up then people should be compensated in some way, you know, they shouldn't be expected to pay for inferior food, and if they fail in that responsibility, if they fail to make amends for shortages elsewhere then they haven't been doing their job and consequently, if the tip suffers, it's understandable."

Quality of Service and Tipping

Informants indicated that quality of service would decline if tipping was replaced by another method of payment (e.g., a flat service charge, higher wages). That is, they believe that the amount of effort and enthusiasm that is put in the job by waitpersons is, to some degree, related to the incentive of the tip. Furthermore, they seemed to believe that customers have a right to this control and customers should be able to pay as a function of the service that they receive.

Respondents also believed that the size of a tip is related to quality of service provided. It is interesting to note, however, that service was defined by respondents in a couple of different ways. On the one hand, service quality was discussed in terms of anticipating customers needs, keeping the water glasses filled, etc. On the other hand, good service was often equated with rapport with the customers. Service was frequently discussed in terms of smiling, being pleasant, and friendly. For example:

"Probably the biggest thing is being friendly overall. Because even if I'm really busy and I don't spend as much time as I should, as long as you're really friendly then they are more willing to forgive you.

"... because their perception of service and the personal interaction that is going on between you and the table, how much you can entertain them and make them feel comfortable, different customers have different ideas of what they want from the waiter. Some waiters are very good at entertaining a table . . ."

This is interesting, in light of the findings of May (1978, cited in Lynn and Latane 1984) mentioned earlier. May found that tips were related to non- task trips to the table but not to quality as rated by independent observers. It appears that waitpersons seem to know that enhancement of the total dining experience is related to tip size and they seem to define general attention and rapport as an aspects of service.

Although not mentioned by all respondents, there seemed to be a sense that customers would not necessarily tip less in cases when the restaurant got busy and the waitperson could not be as attentive. Some mentioned that customers would sometimes tip better in these instances because they felt a certain empathy for the waitperson.

The Waitperson as Customer

The individuals who were interviewed were asked about their own tipping behavior when they are a customer in a restaurant. A clear finding is that people who are waitpersons are good tippers. This is probably the case for several reasons. Since they are in the industry, they may empathize with similar others. Also, there is a good chance that they may know their waitperson personally since people in the industry socialize a lot with others in the business. Further, informants generally admitted to making value judgments about customers based on how much the customer tipped. It is likely that the waitperson is acutely aware of this when they are a customer and want to be looked upon favorably by their server. Most informants said they would tip 20 percent or more in the general case. Most also said that they would never go below 15 percent even if the service they received was extremely poor. In spite of this floor of 15 percent, most felt that they usually tipped as a function of the quality of service that they received.

SUMMARY AND CONCLUSIONS

Tipping is an exchange between consumer and service provider that is guided by informal rules and custom. It appears that those who occupy one side of this exchange relationship, the waitpersons, feel that many who occupy the other role, the customers, do not understand the rules, since these rules are not explicit. The waitpersons, on the other hand, are part of a culture that considers and discusses the custom at length and these discussions pass on the shared beliefs and folk wisdom about the custom and about customers.

Consistent with previous findings, the custom of tipping helps place the service provider in a liaison position between restaurant management and the customer. While the service provider represents the restaurant to the customer, he or she also acts as advocate for-the customer if something is not correct with the meaL Most waitpersons believe that the customer and service will suffer if the system of payment is changed to higher wages or a service charge.

People in the restaurant business believe that the amount they receive for their service is a function of aspects of the consumer, perceptions of service quality provided, and situational factors. In general, while stereotypes exist about different customer groups, waitpersons seem to believe that the causal variable related to individual differences is degree of knowledge of the tipping custom. Quality of service is perceived to be a matter of actual service as well as rapport with the consumer. Situational factors include who is present with the paying customer (e.g., whether the tip is a method of impressing someone) and the number of people present at a table.

Future research will investigate the consumer behavior of tipping in more detail and will include surveys of consumers and service providers. Particular areas of interest are how consumers define service quality, the extent to which consumers are knowledgeable of tipping protocol and what factors consumers identify as most important in determining tip size. The authors are also interested in individual difference variables that may mediate tipping behavior. A cross-cultural investigation of tipping as custom is also planned.

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