Tip Jar in a restaurant

The future of tips and gratuities

Whether it be a few extra coins in the dish, rounding up a taxi fare, or software calculating service charges on your restaurant bill, tipping is an every-day occurrence in the worldwide service sector.

Have you ever stopped to think why you tip? This was a question I asked a few friends on Facebook. Whilst clearly not a scientific study, (others have done the science – see the links at the end of this post) the most frequent response was simply tipping for good service. However, if we dig deeper and analyse what’s happening in the real world, we tip because:

  • It’s traditional
  • Convenience
  • Regional and cultural variations
  • Age and gender

If tipping feels automatic, does it mean the people who believe they’re tipping for good service are actually ignoring service standards? Are they rewarding ‘passable’ service which has already been paid for? Worse, are above-and-beyond endeavours overlooked?

How we got here

The origins of tipping go back much further than the 17th Century, but at this point in history, a weary traveller stopping at an inn for the night could order dinner and a pint of porter and have it brought to a bedroom. There is no such thing as room service; in fact, a dish was plated-up in the family kitchen, with no such thing as a waiter. Instead, there might be someone else’s footman, maid or local wench looking for casual work. You simply order one to go and get your meal brought from the kitchen, served to you in your quarters and have the dishes returned once you’ve eaten. For such a service a coin or two would be good pay and of course, very good service (and strong wine) might lead to greater generosity. Years later, this tradition continued as inns and restaurants began employing staff to provide table and room service. They were being paid by the inn, but customers were used to giving them a service charge as well.

And so is a tip a bribe for special service? The culture back in the 17th Century, especially in London, was ‘money could buy you anything’ – what we would now consider bribery was a common and accepted (although not necessarily encouraged) activity. Samuel Pepys wrote in his diary of how he could frequently be offered or would pay for inducements to get better service, privileged status or exclusive access to or by anyone. Here is an example of a tip paid to his doctor;

26th Oct 1663 – “I did give Dr Williams 20s tonight…besides the bill of £4 which I paid a good while since …etc”.

Would you consider tipping your GP?

What is the future for tips?

Returning to more recent times and in 2015 restaurants encountered challenges as minimum and living wage regulations clashed with decades of culture. Many restaurants were taking advantage of tipping and argued this formed part of the front of house staff wage – and so could be included when working out if they met minimum wage requirements. The ensuing backlash ensured that in the UK at least serving staff now get paid according to the law and therefore the tip is an extra.

Is the whole deal out of date and on the way out? In recent years many have asked if it should be banned here in the UK and US, and we are still asking that question. In Russia and Japan, it has always been a no-no so it looks like it is a matter of cultural inertia that service charges and tips have not been phased out already. With the increasing potential for a cashless society, my prediction is that tipping will be replaced by the Uber-style of quick rating feedback. We will in future rate our hairdresser, pizza delivery person and waiter and maybe they will also rate us. This system has worked very well in marketplaces like eBay and Amazon and we rate everything from apps to a country walk.

So here is my prediction; as we achieve a genuinely cashless culture we will also pay in experience ratings. If I’m wrong you can give me a poor rating!

Susannah Taylor is Head of Finance at Zupa

Further reading:
The diary of Samuel Pepys – 1660 – 1669 available at all good book retailers in paperback and on Kindle.

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