Interviews with chefs provide insights

Anyone who likes to visit their local cafe is familiar with the following scenario. Upon purchasing your lunch, a cashier turns a payment screen toward you: “This will just ask you a few questions.”

Buttons on the screen prompt you to leave a tip—maybe a dollar or two, maybe a percentage of the bill. But what if all the employee did was fill a cup with black coffee? What if you’re with someone you want to impress with your generosity? What questions go through your mind when you’re deciding if, and how much, to tip for a service?

These common conundrums are what inspired Omar Shehryar, a marketing professor in Montana State University’s Jake Jabs College of Business and Entrepreneurship, to research the ethical and moral dimensions of tipping in the United States.

Shehryar conducted a study with colleagues from the University of Vermont. The resulting paper, “Dishing up Morality: How Chefs Account for Gratuity,” is published in the Journal of Business Ethics.

“Customers try to minimize cost and maximize benefit in all circumstances, but tipping turns that upside down,” Shehryar said. “Say you’re going to a bakery, and you pick up an $8 baguette, but then you’re paying $2 more on top of that. Economists are baffled by this. It doesn’t fit with their perspective of how people do things. So, we were trying to figure out what people’s justifications are for leaving tips, or not.”

Shehryar said while previous scholars have studied attitudes towards tipping, this study is the first to center on the perspectives of chefs, who spoke to customer dynamics they have observed for years. The researchers interviewed chefs because, unlike servers and customers, they are not directly involved in tipping and so could speak to the practice more objectively.

The study was built on interviews with 25 Vermont-based chefs and restaurateurs who had a cumulative 471 years in the industry. In sum, the interviews painted a picture of a tipping system that leaves a bad taste in the mouth of chefs, servers and customers, but is too engrained to easily change.

Shehryar said one of the more surprising findings was that chefs believed many customers could not afford to eat at restaurants if the menu prices reflected the actual costs of the meal. By relying on tips to help pay servers, restaurants artificially lower the price of food, and fear that any change to this system would leave patrons with “sticker shock,” he said.

In the paper, one chef commented that “restaurants are being held hostage. You either up the prices by 30% and risk going out of business or do what we are currently doing.”

Chefs said patrons sometimes exploit their power, knowing a server’s wages are largely at their mercy. Past research has also identified that a server’s attractiveness, race and gender impact the tips they receive, raising questions of equity.

The outcome is that “good” tippers are essentially subsidizing “bad” ones. No matter how you feel about tipping, there are situations where the service has economic value not included in the price tag, Shehryar said—for example, deliveries by drivers who work during bad weather, risking their safety and personal vehicles.

A consumer who purchases a $15 burger that comes out to $25 with delivery fees and tips, Shehryar continued, may feel ripped off. However, if a person used his or her own time, car and fuel to get the burger, the cost realistically could still be around $25.

“The onus is on the customer to acknowledge that there’s some value they are paying for,” Shehryar said. “They think tipping is an extra, whereas, as an economist, you could see that tipping in that situation is not an extra.”

Still, Shehryar said the question of whether people are morally obligated to tip is matter of opinion—all the researchers can do is gather information that paints a picture of how the current system is working.

The study also touched on how COVID-19 changed tipping, including the advent of “tip coercion.” During the pandemic, people performing services that involved direct human contact, like cutting hair, saw their tips increase, Shehryar said. Additionally, some who perform services that people have not historically tipped for, such as auto mechanics, started offering customers the option to add gratuity. At the same time, tips for food delivery decreased—researchers theorize that customers, frustrated by lockdown orders and inflation, were taking their anger out on delivery drivers.

Shehryar said it would be interesting to do future studies analyzing the causes of tip coercion and its consequences—such as how increased requests for tips are impacting consumer behavior.

In terms of policy recommendations for tipping, there are no easy answers, Shehryar said. While data show that increased wages would address some issues, a system overhaul would mean a huge shift in cultural and economic norms.

“Like the chefs said, in the U.S., tipping is just tradition. It’s what they are working with. They have to find the most optimal way to run the business while not fundamentally challenging why tipping exists,” Shehryar said.