Is Tipping Becoming Obsolete?
Recently some restaurants and other service businesses have started to ask customers not to tip their staff. Moreover, the Food Channel predicted a no-tipping future on its list of 2016 Top Ten Trends.
“I feel this strategy will be a win-win for both the customers and the servers. Servers can now focus on working together as a team by sharing job duties and not getting territorial,” according to Teresa Miller, Associate Professor of Hospitality Management & Marketing at Tiffin University. “Servers won't have to worry about getting "stiffed" and can concentrate on giving customers the best service possible.” Thus, service jobs would become more professional.
Some shrewd restaurant servers have discovered ways that research shows can increase tips without necessarily providing better service. The more common ploys include touching customers on shoulder or hand, crouching at the table to get to eye level with diners, and drawing smiley faces on checks. Smiley faces only work for female servers.
Female servers also have some advantages not related to service such as being a blonde, wearing a flower in their hair, and wearing red. Men especially leave larger tips for women servers wearing red.
Technology is playing a role in moving to no tipping. Chip and PIN credit cards discourage tipping by keeping customers from being able to write in a tip on a paper receipt.
Tipping can cause much variability in employees’ incomes. Paying employees a wage that does not depend on tips can make the amount of take home pay more predictable for both employees and restaurant owners.
To increase the pay of servers who do not receive tips, many restaurants are increasing prices or adding service fees to the bill.
No tipping started in high-end international restaurants in larger U.S. cities. Tipping is much less common in Asia and Europe, so restaurants with a significant international clientele did not want to offend customers by expecting them to tip.
Restaurants with a no-tipping policy report that it has taken a while for customers to catch on. Eventually though, customers appreciate not having to rate the server and the absence of post-meal math to calculate how much to leave. It simplifies the customer experience.
Customers behavior is part of the reason for this move away from tipping. A recent survey from consumer research firm Vouchercloud.net shows that 46% of Americans are tipping less now than five years ago.
Not everyone agrees that the no-tipping trend is good. Tipping for good service is an ingrained consumer habit that will be difficult to change.
“I think one question customers are now asking is if this strategy will decrease the service and hospitality delivered by servers,” said Miller. Many people believe that providing motivation for a larger tip is good. Customers feel like they can express their satisfaction with the service experience.
In addition, many small local restaurants and other service providers, like nail and hair salons that run on razor-thin margins, use tips to help their cash flow. In slow times, paying a higher wage to service providers in an empty restaurant or salon could become quite expensive.
The days of consumers having to worry about how much of a tip to leave appear to be numbered.
Dr. Perry Haan is Professor of Marketing and Entrepreneurship, and former Dean of the Business School at Tiffin University. He resides in Rocky River and can be reached at 419-618-2867 or firstname.lastname@example.org.