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Do tips improve customer service?

There is one aspect of the service industry that is difficult to get right. Tipping. There are so many factors that affect our attitude to tipping. It is quite normal in most cultures to tip waiters in a taxi or a sit-down restaurant but no one thinks of tipping the bus driver or the guard on the train. We tip the hairdresser but not the person on the till at the grocery store. In North America it is not unusual to tip 20% of the cost of the meal whereas in Switzerland it is normal to round up the price by a mere 5%.

For Europeans holidaying in the US tipping is fraught with anxiety. Even lousy or indifferent service requires a 15% tip. When checking into a hotel how many people are you expected to tip? The doorman, the person who checks you in, the person who opens the door of your room, the person who cleans your room, the waiters that serve you coffee at breakfast – it’s a long list?

Historically tips have been in cash. What is going to happen as we move into a cashless society? A gratuity can easily be added to a restaurant bill but how do you reward the bellboy at the hotel if you aren't carrying any notes or coins?

Anxieties associated with tipping are not only working out who to tip but how much they deserve. Since tipping is supposed to be a reward for good service you would imagine that the amount proffered would be variable - the better the service, the greater the tip. The hope is that a generous tip encourages better service while a measly one prompts the server to make improvements. A number of studies have examined the relationship between the quality of service in restaurants and the effect of tipping and the results are murky. Surprisingly there is no strong correlation between tipping and the improvement of services. It appears that a number of things confuse this relationship. Servers in restaurants become adept at recognising patrons who are likely to be generous tippers and prioritise them leading to inequalities and discrimination in service provision.

You would think that the problems associated with tipping would result in a change. In theory there is no reason why tipping couldn’t be replaced by service charges or higher basic wages. There appears to be resistance to this from customers and the businesses that provide the service. For many customers tipping has now become an ingrained behaviour. They feel that tipping gives them some sense of control over the purchased service. Businesses fret that without tips they would have to supplement the income of the service staff which in turn would increase advertised prices and discourage custom.

Much as we may dislike tipping, it looks as if it is here to stay. This being the case it is worthwhile training the servers so that at least they know how to maximise their reward and maintain high levels of customer satisfaction. As with most elements of customer experience this isn’t rocket science, just a little bit of hard work:

1 A friendly server has a name. It pays to say who you are with a big smile.

2 This second piece of advice requires some decorum. A couple of American studies have shown that a brief touch on the customer’s arm or shoulder substantially increases the size and likelihood of a tip.

3 A well turned out server creates a better impression and will earn a larger tip. A French study showed that waitresses who wear red receive significantly higher tips. Red lipstick and a flower in the hair also seem beneficial.

4 Punters like to know that their order has been recognised and so repeating and confirming the order increases the level of satisfaction and the tip. We've seen this before in another aspects of behaviour – people appreciate subtle imitation or mimicry. It confirms they are on the same wavelength.

5 Compliments also help. Simply saying "good choice" can increase the tip by 2%.

6 And finally, writing "Thank you" on the bill or drawing a picture of the sun has been shown to increase the average tip size by 7%.


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