The point of tipping

A couple of weeks ago Helena Echlin, a writer for the food website CHOW, interviewed me for an advice column about the etiquette of tipping baristas. I get the opening quote:

Jacob Grier, a barista at Baked and Wired in Washington, DC, and cowriter of the blog Smelling the Coffee, says he tries to tip a dollar per drink. “You tip a bartender if he creates a good rapport, so why not tip a barista for the same?”

I actually said quite a bit more than that, but it beats my WSJ lead of “make sure it coats your tongue.” Not surprisingly, I do advocate tipping baristas, but not necessarily for the obvious reasons. And since I’m no longer actively working in a coffee shop I can’t be accused of letting self-interest bias my opinion.

The obvious reason to tip a barista is as a reward for a quality drink, but I think there are several flaws with this logic. The first is that tipping in coffee houses generally happens at a jar near the cash register, before the drink is made. Regular customers may have some expectation based on prior experience of how good their drink is going to be, but for the most part people can’t correlate drink quality with the tip they give.

Secondly, tipping could be considered insulting. When was the last time you tipped a chef? Almost never. Chefs are assumed to be duly compensated for their talents by the restaurant in which they work. Tipping them would be awkward, to say the least. Unlike waiters and bartenders, baristas generally are paid a significant wage, so it’s arguable that they already receive due compensation for their skills.

Finally, research shows quality of service has very little to do with how much patrons tip, at least in restaurants. Here’s one summary:

This view is reinforced by research conducted by Professor Lynn. He has analysed data involving 2,547 dining parties at 20 restaurants, and established scientifically what many waiters have long suspected – that there is only a very weak relationship between the size of a tip and the quality of service provided. It therefore makes little sense for a waiter to work harder in order to obtain a tip.

Michael Conlin, an economist at Syracuse University in New York state, investigated tipping by surveying 39 restaurants in Houston over 112 sessions, each lasting four hours. Conlin investigated whether adjusting for the number of courses in a meal produced a link between the quality of service and the size of a tip. (The idea being that the more courses to a meal, the more work the waiter has to do, and so the more information the customer has with which to evaluate the quality of service.) However, Conlin found that the number of courses had no effect on the size of the tip.

Tipping doesn’t vary much with quality of service for repeat customers, either. A lot of people think they tip as a reward for quality, but this appears to be a myth. Michael Lynn has written a lot on this subject, so check out his page for more info.

So if tipping doesn’t affect service quality, why do it?

The main reason — and this applies not just to baristas, but throughout the service industry — is that tipping is correlated with personable service. Wearing distinctive clothing, introducing themselves by name, and making eye contact with customers are all things Lynn has found servers can do to increase their tips.

Relatedly, tipping is most prevalent in extroverted, neurotic cultures:

Tipping exists around the world, but there are different customs in different countries. Lynn researched these variations, counting the number of service professions that were tipped in various countries. He then compared these numbers with the results of personality tests given to people in those countries.

It turned out that countries with the most extroverted and neurotic citizens (the United States leads in both categories) tipped the largest amounts and to the greatest number of professions. “Extroverts are outgoing, dominating, social people — and tipping is an incentive for the server to pay you attention. Neurotics are prone to guilt and generalized anxiety — maybe they tip more because of guilt over status differences between themselves and the server,” Lynn says.

Who likes coffee shops more than neurotics? A bit of recognition and conversation is something a lot of people want out of their coffee shop experience, so I don’t find it surprising that a custom of tipping would develop in that atmosphere. Rapport with one’s coffee shop staff is a good reason to tip. (From my personal experience, I’d say that tipping well doesn’t buy baristas’ friendship and tipping poorly can be offset by general niceness. But baristas do notice who tips and who doesn’t, and not tipping is a big strike against people who are already objectionable in some other way.)

James Surowiecki reaches a similar conclusion about why the practice of tipping lives on:

This is, on both sides, a more uncertain process than a simple service charge would be. But that uncertainty—that freedom to exercise discretion, to leave as little or as much as you wish—is why tipping has flourished as a social institution. (In the same spirit, Americans prefer giving charity privately rather than through their government.) Diners—eighty per cent of whom say that they prefer tipping to a set service charge—like the power that the ability to tip gives them. Waiters like tipping because it gives them the chance to distinguish themselves from the crowd and to score an occasional windfall. Tipping, curiously, has gone from being the antithesis of individualism to its apotheosis.

Another reason to tip is as a form of price discrimination. As I noted previously, skilled baristas in the US are underpaid. Compared to other markets, American consumers are less discriminating in their taste for espresso drinks. This means that artisan baristas are unlikely to stay in the field for long. Higher wages could induce them to stay, but the price sensitivity of many consumers makes this hard to fund. Tipping serves as a form of voluntary price discrimination for customers who care about good coffee without raising prices for those who don’t. (I usually tip wherever I get coffee, but I certainly tend to tip more in places where I know the baristas care about what they’re doing. I wouldn’t be surprised if tips are correlated more highly with quality in coffee than in other industries, while still being a secondary factor.)

Lastly, baristas are better off getting tips than getting a higher wage (and charging correspondingly more for drinks). Receiving part of their income through tips gives baristas greater liquidity and lets them avoid, to some extent, income taxes and the regressive FICA “contribution.”

So, in short, here’s three reasons to tip your baristas:

1) They’re friendly, eccentric, personable, etc., and that’s what you want out of your coffee shop interaction.

2) Even if customers less discriminating than yourself don’t realize it, they’re good at what they do and deserve more than they’re paid.

3) They deserve the money more than the government does.

[Cross-posted on Smelling the Coffee.]


2 thoughts on “The point of tipping”

  1. While I pretty much accept your proposed reasons for tipping a barista, I don’t see how most coffeehouse tipping arrangements actually allow the customer to demonstrate his or her motives for tipping. The basic problem with tipping in coffeehouses, in my opinion, is that people generally prefer to tip an individual and most drinks in a coffeehouse are prepared in a highly interactive team environment.

    Let’s say I want to tip for a personable experience. That experience probably comes from my interaction with the cashier, and now I feel like I’m either tipping for punching buttons on the register or demonstrating that I know I make more money (Dr. Lynn’s neurotic guilt thing). On the other hand, let’s say I want to tip because I know baristas are skilled employees who deserve it. Now I’m putting money into a jar the baristas probably can’t see, and I could just as easily be rewarded with a poorly prepared drink as a high quality one. Moreover, I know that if I put my money into a tip jar there’s almost certainly tip sharing, which means that my revealed preference is diluted beyond recognition. In other words, regardless of the intent of my tip, in reality my tip is essentially a gesture of altruism.

    To be fair, things aren’t quite as bad as I’m describing, mainly because the coffeehouses you’re concerned with are designed to cater to the repeat customer. Baristas can easily information share as they get to know the tipping habits of the regulars, and if I’m a regular I have an incentive to tip visibly and often in an effort to build a favorable relationship. But if I’m too infrequent a customer to earn visual recognition, I don’t see how I have any incentive to tip because even if I have a good reason to do so I have no way of signaling that reason to the baristas.

    If we really can’t think of a way for the individual customer to demonstrate preference through tipping, I’d love to see a coffeehouse — or perhaps a restaurant that practices tip sharing — try to tackle the problem of incentivizing desired barista behavior through internal tip allocation. Could a manager find a way to evaluate the quality of drink preparation and distribute tips accordingly? Could the manager institute some sort of mystery or secret shopping program to incentivize personability? I dunno — would love to see the experiment though.

  2. I think you offer solid reasons in support of tipping. As a frequent tea drinker at coffeehouses that use prepackaged tea bags, I often feel awkward about tipping. It is like saying, “Thanks for, uh, pouring hot water into a cup for me.”

    Having said that, I do tip for personable service.

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