Monday, July 16, 2007

The tipping point

Jessica Osborne enjoyed serving Becky and her family every Friday at the Angola, Indiana Pizza Hut where she’s a waitress. Jessica had wanted to study photography at a local college but couldn’t get financial aid. Becky had problems, too: her husband and eldest daughter were killed in a car accident. Becky liked Jessica’s warm and consistently friendly manner, and wanted to help out with a large tip, and was able to after receiving a large settlement. The total bill amount was not made public but the tip percentage was probably in the neighbor hood of forty thousand percent: Becky’s tip was for $10,000.

Surveys of restaurant customers indicate an average tip of 15 to 20 percent; the national average is 18.6% of the total bill including tax; Philadelphia has the biggest tippers. One in twenty tip 25% or more, one in eight tip 10% or less, and one in fifty tip under 2%. By the way, restaurant service experts suggest that instead of punishing bad service with no tip, it’s better to complain to management.

Tipping goes way back in the USA: George Washington tipped his brother-in-law’s slaves in 1768. The earliest tipping records date to 16th century England, but tipping is likely as old as business itself.

But it’s not universal: in Australia, China, Denmark, Japan, and Iceland, restaurant tipping is the exception, not the rule. The reason: Researchers believe that consumer tipping behavior is motivated by the region’s social norms. Which brings us back to Indiana.

With customers like Becky, I don’t think Pizza Hut will have any trouble lining up a replacement for Jessica.

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