Tipping and Customer Service

I wanted to raise some questions about tipping and how it relates to customer service. First though an explanation: I live in New Zealand, where tipping isn’t a regular occurrence – our labor laws are such that wait staff and the like earn a livable wage without the promise of extra tips – so I’ve grown accustomed to paying the menu price for a meal and not having to think about tipping.

I’m visiting the US frequently now but still get confused at the mental shuffle that is the tipping process.  From my perspective it breaks the flow of a meal, introduces discomfort and generally introduces bad feeling and resentment into the staff/customer relationship.

But beyond this I wanted to explore what tipping actually does for customer service. My contention is that a culture of tipping is actually detrimental to the overall customer service experience and I found an interesting (if a little dated) article in the New York Times about this very issue.

The article tells the story of The Linkery, a small restaurant in San Diego that a few years ago decided to eliminate tipping. Front and centre in their menu it says – “We believe that charging for service and declining tips is an appropriate option for professionals in any industry including hospitality..”

The Linkery rationalizes this decision by saying that they’re attempting to ensure the entire staff operates together to provide the best service for their customers, without the artificial barrier (or inducement) of tipping.

They even provide some academic research (“Tip Levels and Service: An Update, Extension and Reconciliation” by Michael Lynn of Cornell University, 2003 and “Incentives and Service Quality in the Restaurant Industry: The Tipping – Service Puzzle”, by Ofer H. Azar of Ben-Gurion University, 2007) that found that level of tipping, and quality of service are very loosely correlated and that “people generally just tip what they tip”.

In other words, while tipping may have it’s roots as an incentive for good service — according to the article, some speculate that “tip” is an acronym for the phrase “To insure Promptitude” — it’s become mostly a standardized cost of going out.

The Linkery have been doing this for four years now, and they report that feedback from their guests regarding service improved significantly since the change and that (as they contend) this means that by not accepting tips they were able to improve their service.

So what does this mean in a customer service setting?  My belief is that by focusing on tipping we’ve actually reduced the motivation for wait staff to provide authentic attention and care to their customers in place of a sort of performance of “niceness”. In fact the NYT article tells of research that has shown how waiters can increase their tips by introducing themselves by name, squatting alongside tables, touching diners and drawing smiley faces on the backs of checks. Such shallow ploys do nothing to increase authentic service levels but rather feel sham-like.

Contrast this with the thoughts of Chelsea Boyd, a waitress at The Linkery who says that: “For the first time, I get to concentrate on the job, and I’m looking at the guests without seeing dollar signs…”

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

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