On the Ethics of Tipping
At lunch-time, I will often venture out of the office for lunch to a sandwich shop with a friend. In my sandwich shop of choice, the staff have placed a small jar labelled ‘tips’ on the counter. Now, in the UK at least, sandwich shop staff seem to fall into something of a ‘grey area’ with regards to tipping convention. Whilst we normally tip waiters and waitresses in restaurants, and bartenders (amongst others), we don’t tend to tip people who serve us in other ways. For example, I don’t feel it incumbent upon me to tip my butcher, who arguably does a lot more work in an individual transaction than someone serving me a sandwich. However, this discrepancy is perhaps not surprising; a great deal of research suggests that tipping decisions are influenced by various social norms; tipping waiters and waitresses is simply ‘the done thing’, whilst tipping butchers is not. Perhaps we just lack a clear social norm in the case of sandwich shops.
If this is right, it might seem that my decision about whether to leave a tip in the sandwich shop is, to some extent, more ‘my own decision’, than my decision about what to tip my waiter in a restaurant. However, in both cases, I believe that my decision about what to tip involves some degree of rationality. Again, although there are social norms about what constitutes an adequate tip, I will also make my decision about how much to tip upon the basis of the quality of service that I receive. I might also think that leaving a good tip will be prudentially good if I believe that doing so will lead to my receiving better service on my next visit.
A recent development (commented upon here) in ‘tipping technology’ suggests that the social norms that influence our decision-making may become more prevalent in our day-to-day transactions. As the report suggests, instead of leaving a jar on the till, some coffee shops and sandwich shops have started asking customers to press a button on an iPad to indicate how much they would like to tip their server. The linked report highlights how a sandwich shop owner in the US who uses this sort of technology commented:
Before, customers had the option to tip, but it was easy to ignore; they could plead ignorant, order a sandwich, and just walk away. Now, the suggestion is right there in front of them.
Is there anything wrong with this practice? The first thing to note is that complying with the social norm here may involve considerable cost. This is not the case with all social norms. For instance, adhering to the social norm of holding open a door for someone requires very little effort. However, in the case we are considering, the iPad software recommends tips of up to 25%; arguably, if consumers felt obliged to tip the maximum amount under the observation of the shop staff, then they plausibly feel that they cannot actually afford to buy the object in question, if it will cost an extra 25% including a tip, rather than say an extra 12%.
However, it seems that if this technology were to be utilised in establishments where there is a clear tipping culture, there would perhaps not be much to discuss here. However, it might be argued that the use of this technology in places where a tipping culture does not exist might be viewed as pressurising customers to conform to a social norm that they would normally reject. As I suggested above, there are some services that we do not tip for; we might go further and say that there are some that we should not be expected to tip for. For instance, I don’t think that we ought to be expected to tip butchers for the sorts of services that they normally provide. However, whilst it is easy to write that in the comfort of my office, I might feel less prepared to defend that view if my butcher asked me how much I wanted to tip him for his services (to avoid complications, assume that the butcher is not wielding a cleaver at this point!); the force of the perceived social norm might override my thoughts on the matter.
So, one might try and claim that manipulating social norms in this way in the context of tipping is that it undermines the autonomy of a consumer’s tipping decision in some way. However, the problem with this line of argument is that our tipping decisions are influenced in any number of covert ways that arguably seem to threaten our autonomous decision-making; the waiters and waitresses who make the most tips are often masters of taking advantage of consumers’ cognitive biases. For instance, a study in the Journal of Applied Social Psychology suggests that waiter or waitress’ post purchase actions can significantly affect the customer’s perception of their service; leaving a second tray of mints after a transaction led to a 23% tip increase. Similarly, research also suggests that waiters and waitresses receive more tips if their restaurant plays music with pro-social lyrics. 
These considerations suggest that my decision about how much to tip my waiters and waitresses is not always as rational as I would believe. Now, one response to this is to maintain that our tipping decisions are still autonomous despite these sorts of influence. Yet if that is so, it seems difficult to regard the introduction of new tipping technologies as anything other than just one more influence on our tipping behaviours that works at a sub-rational level. But perhaps the devil is in the detail; whilst some ‘nudges’ in the direction of tipping seem compatible with autonomous consumer choice, it seems important that these strategies nudge, rather than push us towards pro-tipping behaviour. The question is the extent to which we regard the social norms that might potentially be introduced by these new tipping technologies as nudging us towards tipping more, or pushing us.
 Azar, ‘Why pay extra? Tipping and the importance of social norms and feelings in economic theory’. Journal of Socio-Economics; 36, (2) 2007, p250-265.
 Strohmetz et al. ‘Sweetening the Til: The Use of Candy to Increase Restaurant Tipping’, Journal of Applied Social Psychology, 32 (2), 2002.
 Jacob et al, ‘Effects of songs with prosocial lyrics on tipping behavior in a restaurant’, International Journal of Hospitality Management, 29(4), 2010.