TIPPING MAKES FOR BETTER MEALS.
Research shows diners like feeling generous
Tipping the wait staff at the end of a restaurant meal seems to make people enjoy the experience more, according to new research.
The positive effect of tipping on self-reported customer satisfaction is even stronger in less expensive restaurants, according to hospitality researchers who reviewed thousands of online ratings at restaurants that have experimented with alternatives to tipping.
Their conclusion is that getting rid of tipping drives down customer satisfaction. If restaurants want their diners to leave feeling happy, they ought to let them tip freely and voluntarily, rather than building it into the price of the meals or by adding it to the bill.
The research is presented as a cautionary tale for restaurants, many of whom are responding to increasing operating costs by trying to bring money that would otherwise go directly to wait staff into the restaurants own budget. The upshot is that, if customer service is an important consideration, this is a dangerous strategy.
The authors of the paper in the International Journal of Hospitality Management suggest this effect might reflect lowered customer expectations. If there are no tips, this theory goes, the staff may be less motivated to provide good service, and customers might expect a poorer experiences.
The authors, led by Michael Lynn of Cornell University, also point out that tipping is a form of “altruistic conspicuous consumption” that delivers psychological benefits all by itself. People enjoy feeling generous and rich, like the sort of person who tips big.
“Overall, the current findings suggest that, if any restaurants are going to lead the movement away from tipping, it should be upscale restaurants and those restaurants should replace tipping, not with service charges, but with service inclusive pricing,” the authors write. “Indeed, the data suggest that only upscale restaurants can abandon tipping without suffering a reduction in overall customer satisfaction and only if they replace it with service-inclusive-pricing.”
The restaurants studied included some of America’s best known fine dining destinations, including Alinea in Chicago and Maialino in New York City. The data came from the website Review Trackers, which scraped the 5-point ratings of nearly 10,000 ratings of 41 different restaurants between 2014 and 2016. The ratings had originally been posted on more familiar websites like Yelp, Google, Facebook, or Trip Advisor.
All the restaurants studied had a no-tipping policy for at least a brief period during the study.
“These findings indicate that restaurants at all price tiers should expect the elimination of tipping to reduce online customer ratings. The only exception is expensive restaurants replacing tipping with service-inclusive-menu-pricing; in that case only can tipping be eliminated without reducing online customer ratings,” the research concluded.
Other research suggests that as many as one restaurant in five had already adopted no-tipping policies, and that a sizable percentage of others were moving in that direction.
The reasons given typically centre on the rise in legally enforced minimum wages, which drives up the cost of restaurant operations.
“Many restaurateurs hope to offset such costs by replacing tipping, which generates revenue management cannot legally access, with service charges or higher menu prices, which generate revenue management can control and distribute more equitably between frontand back-of-house employees.”
Until now, the only research on how tipping affects customer satisfaction was on the chain of restaurants called Joe’s Crab Shack, where the replacement of tipping with “service inclusive pricing” was shown to reduce overall dining satisfaction.
The authors point out that they have discovered a correlation, not necessarily a causal relationship. But they claim the research “adds to a limited body of evidence that tipping increases overall customer satisfaction relative to that under alternative compensation/pricing systems — especially when compared to service charge systems and at less expensive establishments.”