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Tipping point: The trouble with fatuous gratuities

Gratuities are as old as antiquity and spreading like a disease in the modern world. But they have a dark side. Can we put an end to this senseless giving?

Tipping point: The trouble with fatuous gratuities

TIPPING is a seemingly innocuous act that splits the peoples of the world. Americans do it with gusto. The French were once champions, but no longer. There are also regular attempts to abolish tipping and in some places a gratuity can offend.

Tipping divides economists too. Why would you pay more for something when you don’t have to? That’s irrational. Even if a tip is designed to encourage good service, surely the most logical time for cash to change hands is up front. Paying extra after the event makes little sense, especially if you’re a one-time customer in a restaurant or a passenger in a cab whose driver you will probably never see again. What’s going on?

The origins of this strange behaviour are murky. Some believe the Romans invented it. Others say it began in the feudal paternalism of Medieval Europe. Something akin to today’s tip is documented in Tudor England when guests in wealthy homes took to handing payments known as vails to servants at the end of their stay. The idea persisted, but it was only in the 19th century when visiting Americans took it home that it really flourished.

By the early 1900s, gratuities had become endemic in American restaurants, hotels and beyond, so much so that some employers used them to replace wages. In 1916, William R. Scott published The Itching Palm, condemning tipping as a moral disease and equating it with the demands for tribute by passing ships of 19th-century Barbary pirates. There were calls for a ban on the grounds that tipping was un-American, creating a servile class counter to national values. Not everyone agreed. In 1918, over 100 waiters were arrested in Chicago for plotting to poison opponents of tipping by lacing their orders with antimony potassium tartrate, which can cause headaches, vomiting and occasionally death. Illinois, Wisconsin, Iowa, Nebraska, Tennessee and South Carolina all tried to introduce tipping prohibition – to no avail.

Today the US is the centre of the tipping universe – an estimated $42 billion is tipped annually in restaurants and bars alone. It also appears to be exporting the practice worldwide. When Ed Mansfield at the University of Pennsylvania cross-checked tip size in 133 countries with the proportion of the population granted visas to visit the US, he found the two rose together (see diagram). Yet the practice continues to generate controversy. Millions of US service-sector workers are paid below minimum wage and rely on gratuities. In the UK . And economists still don’t see how the idea got off the ground.

TippingGraphic

Michael Lynn at Cornell University, who has made a career of trying to understand tipping, thinks he can explain that last conundrum, at least. Tipping starts, he argues, with a few people motivated by two altruistic notions and one self-serving: the desires to reward good service, boost income for low-paid workers and show off status through largesse. These pioneers get something back from their extra payments. , and service staff devote more attention to them if they make a habit of it. Others, observing this, start to follow suit. As the numbers increase so does the social pressure to join in and a feedback loop results. Eventually the behaviour becomes so common that people look down on those who don’t do it, and emotions such as shame afflict people who defy the custom. “That’s when a sense of duty to fulfil the social obligation to tip emerges,” says Lynn.

This explains why the act of tipping can be an awkward, conflicted moment. Are we doing it for the positive payback the pioneers enjoyed or just to fit in and avoid disapproval? Lynn suspects the latter, in most cases. This, he thinks, provides the strongest argument for . But it’s not the only one. that in the US, black restaurant staff are tipped less than their white counterparts for the same level of service. . Subtle, possibly subconscious, discrimination seems to permeate the gratuity, says Lynn. “It’s a class action lawsuit waiting to happen.”

That’s not all. There are also worrying similarities between tipping and bribery. In a comparison of 32 countries, Magnus Torfason at the University of Iceland found that countries where tipping was most prevalent also tended to have more corruption. “My intuition is that if you don’t have tipping, you don’t have a population that is experienced in informal exchange. That makes bribery difficult,” he says. His native Iceland is a case in point, with little tipping and a strong cultural bias for transactions to be very transparent.

So, how might we reverse the seemingly inexorable rise of tipping? “Add a fixed service charge in all restaurants, and it would almost disappear,” says economist Ofer Azar at Ben-Gurion University, Israel. This approach has proved successful in France, where gratuities were once so prevalent and lucrative that restaurants could charge waiters to work. From the 1920s, a fixed service charge gained favour and is now required by law. The law since 2008 says it must be passed on to staff – and .

Torfason is also optimistic that non-tipping cultures can resist the tide. “There is more discussion in the US about reducing the importance of tipping than there is in Iceland about it becoming a good thing,” he says.

(Image: Philjhill/Stockimo/Alamy Stock Photo)

Tips for tippees

is $3 million, given to pizza server Phyllis Penzo in New York in 1984 after a regular customer promised to tip her half his lottery win if his numbers came up. Most service staff can only dream of such a windfall, but there are tried and tested ways they can increase their tips. In fact, simple nudges have a much bigger impact than quality of service, which on average is of a tip.

Proven generosity-boosting ploys include , background music with feel-good lyrics, , a complimentary sweet and or a smiley face on the bill.

Michael Lynn at Cornell University has even written a free guide to maximising gratuities – . He adds body language to the arsenal – smiling, crouching to customer eye level or simply standing a bit closer have all been shown to reap rewards.

Topics: Economics / Festive science / Psychology