Heuristics

Why Good Service Earns a Good Tip From Many, But Not All

As the price of everything goes up, our tipping strategy may be changing, too.

Posted March 31, 2022 | Reviewed by Michelle Quirk

Key points

The anonymity that comes with food delivery apps makes it easier than ever to leave lousy tips.
Those who have been labeled "good tippers" are more likely to live up to the reputation.
"Tip-promising" will improve service over time but opens the door for "tip-baiters" who promise a big tip up front and pull it back at the end.

Source: Mohamed Hassan / Pixabay

One of my favorite scenes from Goodfellas, the classic 1990 Martin Scorsese mobster movie, shows Robert DeNiro dropping cash in employee shirt pockets and casually slipping money into handshakes as he swaggers through the nightclub. For some reason, I don't feel as cool when I slowly—and with great purpose—deposit a dollar into the barista's tip jar pretending I don't care if he sees me or not. Anyway, here are five questions about the future of tipping that we should talk about:

1. Has tipping changed since technology-assisted deliveries took over?

Generally speaking, we are all more likely to tip more in situations involving meaningful face-to-face interactions. These social exchanges can impact tip amounts significantly. Current technology minimizes these high-quality social exchanges—trading it off for efficiency and speed. Without the social pressure that comes from real interactions, people feel more empowered to leave a lousy tip. Everyone is also more anonymous and this makes it less psychologically costly to tip poorly because there is less guilt.

2. Do people tip to increase the quality of their service? Do people who look like generous tippers actually receive better service?

People sometimes tip because they feel there is a causal relationship between the tip and the quality of their service, but this only works with repeat customers. Someone who dines at the same restaurant regularly will form relationships with the servers. When a person earns the label “good tipper,” they now have a reputation to live up to. You have been labeled a good tipper, and you want to behave accordingly.

Stereotypes and perceptions play a critical role in navigating through our social world in general, and tipping is no exception. Those working in the service industry who rely on tips for income naturally use stereotypes and mental heuristics to make predictions about others. We all do it—for better or worse—because we all face decisions about how to allocate our time and energy. We simply cannot give 100 percent all of the time.

3. Why do people sometimes tip well even though the service wasn't exceptional?

Social psychologists describe compliance as publicly conforming without necessarily privately agreeing. “OK. Sure. I’d love to add a $1.00 donation to the Human Fund to my grocery purchase.” Acceptance, another term used in social influence research, involves both acting and believing. That is, you do something and you really buy into the purpose of your action—for example, washing your hands in the restroom because you truly believe it is the healthy and right thing to do. There may be a level of conformity here, in addition; you perform the behavior because it is part of your private value system.

4. What is "tip-baiting," and does it work?

When you place an order through a service like Uber Eats, you might be asked how much you plan to tip as an incentive for drivers to deliver the goods faster, with the option to change the tip last minute. The theory is that we can shape the behavior of the delivery driver and boost our chances of better or faster service. This is a fascinating topic that we are going to hear more about in the years to come. Tip-promising will result in better service in the long run but only for those who gain a reputation for dangling a big tip out there and then following through with that payment in the end. That is, the tip that is offered at the beginning is an honest signal of the real tip at the end. Those on the opposite end of the spectrum who tease with a big tip but never come through will earn the reputation of a “tip-baiter.”

5. Should delivery services (e.g., Uber and Lyft) use psychological manipulation and societal pressure to get more tips from customers?

As long as there is a social norm for tipping in those situations, services like Uber and Lyft would be smart to exploit our psychological mechanisms of reciprocity to get as much money out of customers as possible. The psychological mechanism of reciprocity is what motivates us to return a favor from someone of approximately the same value.