Tip or skip? What drives our tipping behavior, with Michael Lynn, PhD

Tipping has long been a part of service culture in the U. S., but in the last few years, the number of places where we're asked to tip has multiplied. Social psychologist and tipping researcher Michael Lynn, PhD, discusses “tip creep” and how digital payment screens are reshaping expectations; why social norms drive our tipping behavior; how tipping norms vary from country to country; how biases affect who gets tipped more; and whether tipping is a fair way to compensate people. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed-sponsored jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed-sponsored jobs. Get a $75 sponsored job credit at indeed.com/podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed-sponsored jobs.

• 0:30Kim Mills?

  Does this situation sound familiar? You grab a coffee or pick up a takeout order, tap your credit card to pay, and you're faced with a choice. The tablet suggests that you tip either 18%, 20%, or 25%. Do you accept the suggestion? Or do you press "no tip" or maybe "custom tip"? With the barista and the person behind you in line watching, this decision feels loaded. Tipping has long been a part of service culture in the US, but in the last few years, the number of places where we're asked for a tip by a person or even a machine has multiplied. Today, we're going to talk to an expert in tipping about what drives our tipping behavior.

• 1:11Kim Mills?

  How much of tipping is about rewarding good service versus following a social norm or avoiding the feeling of being judged? How do biases affect who gets tipped more? Why do tipping norms vary so much from country to country? Is tipping a fair way to compensate people? And if not, what could be done to make things more equitable? Welcome to Speaking of Psychology, the flagship podcast of the American Psychological Association that examines the links between psychological science and everyday life. I'm Kim Mills. My guest today is Dr. Michael Lynn, a professor of consumer behavior and marketing at the Peter and Stephanie Nolan School of Hotel Administration at Cornell University.

• 1:54Kim Mills?

  He has studied tipping behavior for more than 30 years. His interest was first sparked when he paid his way through school by waiting tables and bartending. He's published more than 50 journal articles on tipping, and his work has been covered by dozens of mainstream media outlets, including The Wall Street Journal, The New York Times, NPR, the PBS NewsHour, and CBS News. His new book, published in February, is called The Psychology of Tipping: Scientific Insights for Services Customers, Workers, and Managers. Dr. Lynn, thank you for joining me today.

• 2:27Speaker 02

  Oh, thank you for inviting me. It's my pleasure to be here.

• 2:30Kim Mills?

  Let's start with the big picture. Why do people tip? And when you ask people what motivates them, what do they say?

• 2:38Speaker 02

  When you ask people, the overwhelming majority response is that people say they tip to reward good service. It turns out that's not as big a factor as people think. When I stand outside of restaurants and interview customers about their dining experience, for example, I find that the customer's own rating of service quality explains about 4% of the differences in tips left by different dining parties. That's bigger than you would expect by chance. There is a tendency to tip more for better service, but it's not the biggest driver of differences in tipping.

• 3:14Speaker 02

  What are the bigger motivations and drivers of tipping? It's really social expectations and the desire to live up to those social expectations to avoid disapproval, gain liking, et cetera. Why do I say that? Again, in interviews with customers outside of restaurants, what I find is that the biggest predictor of tipping is bill size, which isn't surprising. There's this 15% to 20% tipping norm in this country. What may be surprising to people is to learn that that explains about 70% of the differences in tips left by different dining parties, which means that there's only 30% left to be explained by everything else.

• 3:59Speaker 02

  In other words, bill size is twice as powerful as everything else combined in driving tipping behavior. That social expectation is the biggest driver. The second biggest set of factors that influence tipping is the social rapport or connection between the service worker and the customer. And we believe that that works because obviously you care about the approval and living up to the expectations of people that you have a connection with more than complete strangers or anonymous faces.

• 4:29Kim Mills?

  Now, I heard a long time ago that the term tip is short for to ensure promptness, which I think is not true. But where did the term come from?

• 4:39Speaker 02

  So there's a lot to that. First, you're absolutely right. Tipping does not stand for to ensure promptness, even though there's plenty of people arguing that it does. But the fact is that acronyms didn't really become popular until the 19th century, and the term tipping has been around longer than that. There are lots of different explanations. There is the word tip in thieves can't is give me. And so people have argued that it derives from this kind of criminal language that people have argued that it comes from the word tipple, as in drinking. The argument here is that tipping evolved in eating and

• 5:22Speaker 02

  drinking establishments as a way of forestalling service providers envy. After all, you're enjoying yourself, having a social, you know, time, eating, drinking, and their laboring to serve you would be natural for them to be a little envious. And who knows what they might do. So tipping evolved as a way of saying, hey, don't envy me. Here's some money. You can have a drink on me later. This is the theory of an anthropologist named George Foster. And consistent with that explanation, the word for tip in many different languages translates to drink money, money for drink. So that's certainly a theory about where tipping

• 6:02Speaker 02

  came from. But there's not a whole lot of good research, historical research, on the origins of tipping worldwide.

• 6:11Kim Mills?

  How much is tipping driven by social approval? I mean, do people want to be seen as the person who leaves a good tip?

• 6:20Speaker 02

  Oh, absolutely. I think that's the major driver of tipping. For the reasons that we've already mentioned, right? The biggest determinant of tipping is the social norm, the social expectation. And the second biggest set of factors are the degree to which you care about the approval and liking of that service provider. Lots of little things that service providers can do to make themselves more likeable, to make you care about their opinion more, have a pretty substantial impact on tipping.

• 6:51Kim Mills?

  Well, we'll get to those in a minute, but I want to ask, in your new book about tipping, you talk about time of day as influencing tipping. How does that work and why?

• 7:02Speaker 02

  I can tell you what the effect is, and that is that people leave larger tip percentages early in the morning at breakfast and late in the evening, and moderate tip percentages at lunch and dinner. Why is a totally open question. I am not sure.

• 7:18Kim Mills?

  Well, you also found that tipping rates vary by geography. So tell us about that. What are the differences?

• 7:26Speaker 02

  Urban areas tend to tip more than rural areas in this country. There are state differences in tipping. The biggest predictor of those state differences is how servers are paid. In the United States, it is not uncommon for servers to get less than the standard minimum wage, but how much less varies from one state to the next. The states where servers are paid the smallest amount are the states where people tip higher percentages. That's the major driver of differences in tipping, although I've done some research showing, for example, that in coffee shops, states where people score higher on kindness tend to tip more.

• 8:09Kim Mills?

  Let's talk for a minute about tip creep. In the last few years, those digital payment screens are popping up everywhere, even at self-service kiosks. Have they changed the norms around tipping and are we now expected to tip in situations where we weren't in the past?

• 8:27Speaker 02

  Yes, we are expected to tip in situations where we weren't in the past, but you need to ask yourself, who has that expectation and does it really matter? I get asked all the time, how much should I tip? And I don't want to tell people that because I'm not an authority. What basis do I have to tell you what you should do? And guess what? Emily Post, Amy Vanderbilt, etiquette experts don't really have that authority either. There is no god of tipping. Tipping norms don't come from on high. They evolve from the behavior of consumers and they become so common and so prevalent that we tend to judge people who don't follow that descriptive norm, and that's how we get the injunctive norm of tipping.

• 9:08Speaker 02

  What's important for people to realize is when people ask for tips, they want the tip and they expect you to give it to them. And they're going to be unhappy with you if you don't. On the other hand, in many of these circumstances, most people are not tipping. For example, restaurant carryout today, if you order food from a restaurant, go pick it up and bring it home, almost all of those places are going to ask you for a tip. Only 22% of customers say they usually tip in that circumstance. Is it really a norm if only 22% of people are doing it? And it's something to keep in mind. If you say no tip, that service provider is going to be unhappy with you. But you're not the only person they're going to be unhappy with.

• 9:51Speaker 02

  70% of their other customers are also going to be subject to that disapproval. And that diffuses the impact a bit, at least for me it does.

• 10:02Kim Mills?

  Why do you think that seeing a screen prompt feels different from seeing a tip jar on the counter? Does the screen actually help us determine how much to tip? Or was it created to just push us to leave more?

• 10:15Speaker 02

  First off, the screen does typically contain one-touch options, which come across as defining social expectations and norms, whereas a tip jar doesn't have that. By the way, research shows that the more you ask for, the more you get. The larger the options, the more likely people are to opt out and say, I'm not going to tip at all. But the tips from those who do decide to tip are larger and the net effect on income is to increase income. And that's one of the reasons you see this escalation in the amounts people are asking for, because it increases tip income. But it's not just those one-touch options that are different.

• 10:59Speaker 02

  In a tip jar, if I don't tip, I simply refrain from putting money into the tip jar. It is a sin of omission. To leave no tip and these digital devices, I have to actively hit a button that says no tip. That's a sin of commission. And we tend to judge people more for things they do than for things they don't do. So these digital devices increase social pressure. They also increase social pressure because they hide information that's available with the tip jar. In a tip jar, first off, it's pretty evident when someone puts money in. So if I'm standing in line, I can see how many people before me have put money in.

• 11:39Speaker 02

  And in addition, the tip jar is typically, you can see into it and you can see how much money there is. In counter service and other circumstances, most people don't tip and the tip jar is not likely to be full unless the staff salted it. And even in that case, you can tell that you didn't see other people put money in. These digital screens hide that information. You don't know how much other people have tipped. And yes, I'm standing in line behind someone, but their back is blocking the screen. And pulling money out and putting it into a jar is much more visible than hitting a button on a screen. And so I think the fact that we don't have information about what other people are doing, combined with the fact that everybody's asking, leads people to assume if they're asking, it must be the new norm.

• 12:24Speaker 02

  And I'm here to tell you that's not true.

• 12:27Kim Mills?

  Do you have any theory as to why Americans tip more than most other people of other nationalities?

• 12:33Speaker 02

  I can speculate. I have done research on national differences in tipping. And those differences reflect in part differences in the values and the personality traits of the national populations. So for example, tipping is more common and people tip larger amounts, the more extroverted the people in a country are. And the United States is a part of those studies and is consistent with that. So we tip more people in larger amounts than other countries. And we tend to be above average in extroversion. But we're not extreme on extroversion and we are very extreme in our tipping behavior.

• 13:12Speaker 02

  And so because we're this outlier, a single case, it makes it hard to have any definitive answer to why are we so unique? But we can speculate. And my guess is that it has to do with labor laws. And we're the only country I know of where waiters and waitresses are allowed to be paid less than the standard minimum wage. And most consumers in this country are aware of that. And that puts pressure on them to try to make up for those low wages and contribute certainly to the amounts we're willing to tip waiters and waitresses. Why we tip a greater range of service providers, I don't have as compelling an explanation for.

• 13:57Kim Mills?

  What are some of the other countries where people tip a little?

• 14:00Speaker 02

  Japan, Iceland, Denmark, those are countries where tipping is pretty rare. You know, I want to say, of course, Canada, Mexico, parts of the Americas, they don't tip as much as us, but more than elsewhere.

• 14:16Kim Mills?

  We're going to take a short break. When we return, I'll talk with Dr. Lynn about bias in tipping, who gets tipped more and who gets tipped less, and whether there are ways to make tipping more equitable.

• 14:28Speaker 00

  This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed sponsored jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed sponsored jobs. Get a $75 sponsored job credit at indeed.com/podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed sponsored jobs.

• 14:59Kim Mills?

  Your research has looked at bias in tipping as well. Are there patterns of discrimination that show up in terms of who gets more, who gets tipped less, and why?

• 15:09Speaker 02

  So first off, waiters tend to get more in tips than waitresses, but that is almost certainly because of where they work and the times that they work. They're more likely to work at upscale restaurants and to work evening shifts. Waitresses are more likely to work at less fancy restaurants and to work breakfast lunch shifts, and that contributes to differences in tip income.

• 15:35Speaker 02

  Controlling for where people work, nowadays, we don't get huge differences in tips between waiters and waitresses. There is research showing that waitresses who are physically attractive get better tips than those who are less attractive. And then we can look at race. There's pretty good data that black servers in this country get lower tips than white servers. And what's really interesting is that that's true even if the customer is black.

• 16:05Kim Mills?

  Now, given that inherent bias, do you think we'd be better off just doing away with tipping? I mean, or are there ways to keep tipping, but make it more fair?

• 16:15Speaker 02

  Yeah, that's a good question. And frankly, I've done other interviews like this, so I'm on record being on both sides of that issue, in part because my opinion changes as I do more research and learn more. I used to think, yeah, because of these inherent biases, we'd be better off getting rid of tipping. But it turns out that lots of restaurants have tried this, and their online ratings go down. Customer satisfaction is improved by tipping. And since there are way more customers than servers, I'm a little loathe to get rid of this benefit to consumers to protect a few servers, right? There's got to be a better way. What is that better way?

• 16:56Speaker 02

  I'm not 100% sure. Perhaps we could allow tip pooling and sharing of tips more equitably among the waitstaff. Currently, you can do that if you don't take the tip credit. If you pay the standard minimum wage by federal law, you can require your servers to pool their tips, and then you can distribute them in an equitable way. But if you take the tip credit, which most people do, you're not allowed to have that kind of tip pooling. Certainly, one option would be to liberalize the laws and allow for more tip pooling. But there's a downside to that, too. Consumers don't like the idea of forcing servers to share tips.

• 17:36Speaker 02

  If I give a waiter money, I want that waiter to have the money, not to put it in a pool where people that didn't wait on me receive a share. So do I have a, you know, magic wand, a magic answer? No. I'm sorry. I wish I did. I can only tell you what the issues are and how people view them.

• 17:56Kim Mills?

  How would consumers know that tips are being pooled? I mean, I worked in one restaurant where tips were pooled. And I also wondered whether, um, whether the, the servers felt it was unfair. You know, I worked harder, I'm a better server and I'm getting as much as, you know, the person at the next table.

• 18:13Speaker 02

  Servers don't like the idea of tip pooling. They would prefer to keep their own tips. How would customers know? Obviously only if someone told them. But it's hard to imagine that that wouldn't get out at some point.

• 18:26Kim Mills?

  Another question, and I'm harking back to my days waiting tables, because I did in a number of places when I was young and in college like you. So when I was a waitress many years ago, I had one colleague who routinely told customers that it was her birthday, pretty much every day. And that got her better tips. So what are some of the things that service providers should do to get better tips short of lying?

• 18:50Speaker 02

  Anything that increases social rapport and connection. Big open mouth smiles have been shown to increase tips. Touching customers briefly on the arm or shoulder at some point during the dining experience increases tips. Standing closer to the table, say a half a foot as opposed to a foot and a half away, has been shown to increase tips. Squatting down, not every time you interact, but at least on some of the occasions when you interact with the table, especially when you're just coming to introduce yourself, describe what's specials of the day, et cetera. If you squat down next to the table, it brings your eye level down to the same eye level

• 19:33Speaker 02

  of the customer, facilitates eye contact, also makes you appear to be physically closer, and it's been shown to increase tips. In one study, a waiter got a dollar more per table if he squatted down than if he remained standing all the time. Writing thank you on the back of the check. And if you write thank you and you have the customer's name, because for example, they gave a credit card instead of just saying thank you, say, "Thank you, Mr. Smith." That increases tips.

• 20:00Kim Mills?

  Has your research influenced your own tipping behavior? I mean, do you think about research when you're eating out and the check comes?

• 20:08Speaker 02

  Yes, and it's influenced it in a couple of ways. First off, because I do a lot of interviews like this, and people ask me about tipping, my own tipping habits, that puts pressure on me to be able to truthfully say I'm a good tipper. And so. I routinely give 18% in restaurants because I don't want to seem like I'm extravagant, but I don't want to be cheap. But having said that, my awareness of actual tipping behavior in many of these new contexts in that people are asking for tips, but consumers aren't giving them in many of these counter service kinds of situations, that absolutely frees me up to join those people who say,

• 20:53Speaker 02

  no, I'm not going to tip in that circumstance. And I do, I refuse to tip for counter service unless I ask for some special treatment that's provided at some effort, then I'll leave a tip. But otherwise, no. And I do think it's awareness through my research of what other people are doing that lets me say no.

• 21:13Kim Mills?

  Have we maxed out? I mean, are we at the point where 20% is the ceiling or is it going to keep going up, do you think?

• 21:22Speaker 02

  There's not a lot of systematic research, but I did do a study looking at academic research on restaurant tipping and we looked at actual tips left in real restaurants, not just self reports of general tendencies. And tips have increased over the last 50 years. That increase was linear. It didn't start off big increases that slowly got smaller. No, it's a straight linear effect, which suggests that they're going to continue to go up. There's no indication. Having said that, there's got to be a ceiling somewhere. The question is where? And I don't know of any basis for making that prediction. I'm sorry.

• 22:02Kim Mills?

  Let me just wrap up by asking you what you're working on now. I mean, you just finished, you know, but published a book and I'm sure that took a lot of time and effort, but what are the areas where you continue to do research?

• 22:13Speaker 02

  Right now I have two projects going on, one with a high school student named Arjun Agarwal. He developed an app that allows people to scan a QR code and leave a tip and he's testing this with the shuttle drivers to the Austin Airport in Austin, Texas. He contacted me wanting to do some research. So I I'm guiding him through this project where he's got different conditions, one where there's just a custom tip and no one-touch options, one condition where there are one-touch options where they're ascending, five, 10, 15, and the other, a third condition where there are one-touch options and descending.

• 22:55Speaker 02

  And we want to see which of those impacts tipping and how they impact customers' ratings of the service as well. The only other study that I'm actively involved in is with a colleague named Mike McCaw, where we're looking at some additional predictors of national differences in tipping.

• 23:12Kim Mills?

  Well, Dr. Lynn, I want to thank you for joining me. I think you've given us a lot of interesting information that may well influence how our listeners tip in the future. But I hope that we're not going to stiff anybody who doesn't deserve to be stiffed.

• 23:27Speaker 02

  By the way, I'm not encouraging people to stiff servers. I'm saying you get to make that decision yourself, right? And don't feel pressured, don't tip out of a sense of obligation. But if you like this person and you want to help them out, or if they did a really fantastic job and you want to reward them and say, thank you, by all means, do so.

• 23:50Kim Mills?

  Good advice. Thank you. You can find previous episodes of Speaking of Psychology on our website at speakingofpsychology.org, or on Apple, Spotify, YouTube, or wherever you get your podcasts. And if you like what you've heard, please follow us and leave a rating. If you have comments or ideas for future episodes, you can email us at [email protected]. Speaking of Psychology is produced by Lee Weinerman. Thank you for listening. For the American Psychological Association, I'm Kim Mills.