Factors influencing the tipping propensity of restaurant customers

Journal of Retailing and Consumer Services 6 (1999) 27 — 37

Factors influencing the tipping propensity of restaurant customers Elizabeth M. Ineson *, Adrian J. Martin
Hotel, Catering and Tourism Management Department, Hollings Faculty, The Manchester Metropolitan University, Old Hall Lane, Manchester M14 6HR, UK.
Best Western Consortium, Bournemouth, UK

Abstract Tipping decisions of 207 UK restaurant customers were explored using factor analysis, Chi-square and t-tests. Tipping propensities centred on service provision and service/product delivery, possibly influenced by personal perspectives, and were significantly associated with certain demographical and situation-linked criteria. The importance of staff experience and training is highlighted.  1998 Elsevier Science Ltd. All rights reserved. Keywords: Service restaurants: Tipping; Customers

1. Introduction To tip, or not to tip — is that a question? The research explored the phenomenon of tipping by restaurant customers. A tip has been defined as a ‘gratuity voluntarily paid by a customer directly to staff 2 over and above the price, whether a service charge is included or not.’ (Nailon, 1978) and a restaurant as ‘an establishment where refreshments or meals are purchased and eaten on site’ (Oxford English Dictionary, 1989). For the purpose of this research the ‘restaurant’ definition was expanded to include ‘with a degree of service delivery at the table and where payment occurs after the meal has been consumed’. The reason for this decision was to exclude fast food restaurants, some public houses and cafes where there is payment in advance or no service delivery. Generally, in the UK, tipping is not the usual practice in these establishments and their inclusion might have distorted the results. As hospitality is accepted to be a low pay industry (Lucas, 1995), tipping can be an important and necessary supplement to wages. In the United States of America (USA), ‘custom prescribes that the tip be a sum between 10 and 20% of the meal charge’ (Butler and Skipper,

*Corresponding author. Tel: 0161-247-2741; fax: 0161-247-6334; e-mail: E. [email protected]. 0969-6989/98/$19.00  1998 Elsevier Science Ltd. All rights reserved. PII: S 0 9 6 9 - 6 9 8 9 ( 9 8 ) 0 0 0 0 3 - 4

1980). Although the pay for US service providers is notoriously low, it has been demonstrated that tips can raise total earnings above the minimum wage requirement (Williams, 1975). In the UK there is no such ‘custom’ with regard to tipping. A national survey (Hotel and Catering Economic Development Committee, 1969) revealed tipping as contributing 33—40% of gross pay. The following year, Kotas (1970) quoted a figure of 50% or more of total gross pay then Bowey (1974) cited examples where tips contributed between one-half and one-fifth of gross pay. More recently, Campbell (1988) pointed to a lack of investigations into the role of tipping in making up service providers’ wages even though he recorded earnings from tips of between 250 and 6000 per year after tax in central London. However, the beneficiaries of tips are a function of the tipping system in practice (Lucas, 1991). The current British legal position is that tips should be taxed as income and it is left to the employer to decide his/her method of declaring those tips earned in an establishment. Some companies operate schemes where the tips are collected, taxed and redistributed among staff (tronc system); others collect tips from individuals and include them in wage packets minus tax. At the opposite extreme, service providers are allowed to pocket any tips to which they have access — a free subsidy to low basic pay from the employer’s perspective (Lucas, 1995). A telephone interview (Senior Inspector from Inland Revenue 1995)

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revealed that the majority of establishments leave the declaration of tips as income to the employee, without advice or aid in recording their tips or in fact without telling them they need to do so. As a result the majority of tips go undeclared. Since the Inland Revenue does not keep figures on tips, they are very rarely chased up. From the customer’s perspective, there are no international rules or obligations with regard to tipping practices. Whether or not an individual leaves a tip may depend not only on his/her previous experiences but also on his/her perceptions of that meal experience. Few British people tip every time they eat out. A conversation with an experienced service provider clarified the notion that service was being tailored to meet the perceived needs of individual customers in an attempt to increase the personal reward, hopefully given as a tip (Martin, 1994). However, even in this large metropolitan hotel, very limited training was offered for a service provider’s job. Is there a set of objective criteria which influence customers’ tipping propensities? Is there an association between service quality and tipping propensity? Much of the research into the practice of tipping has been concerned with fuelling a ‘tips versus service charge’ debate (such as Brown and Rolle, 1991), generally conducted from an employee perspective and employing ethnographic techniques, leading to a preoccupation with the service provider-diner relationship and the ‘entrepreneurial element’ of tipping (Themen, 1996). Through job analysis (Sparrow, et al., 1992) observed behavioural changes in service providers when dealing with different customers. Although these behavioural changes might have been purely to attain customer satisfaction, they could also have been associated with desire to improve tips. When Gardner and Wood (1991) explored the ‘alternative’ culture, typical of American style theme restaurants, with an emphasis on team-work and tip-sharing, they argued that this ‘entrepreneurial element’ was conducive to manpower problems. Nevertheless, it cannot be ignored. Accepting the fact that tips can, and do, make up a proportion of service providers’ wages, how can staff best tailor their service to improve tips?

2. Background to the study Fuller and Currie (1966) matched the success of a restaurant with repeat visitors and a homely pleasant atmosphere created by courtesy, good quality, well-cooked food, knowledgeable waiters/waitresses and quiet, efficient, unostentatious service. Dahmer and Kahl (1988) declared the role of the staff was to welcome the visitors and attend to their needs whilst ensuring smooth and efficient service, citing the following essential personal qualities: reliable, cooperative, personable, healthy,

knowledgeable, persuasive. Clearly, the differing levels of service depend not only on the staff but also on the quality of the restaurant. In any instance, the customer/service provider interaction could have a great effect on customers’ perceptions of the service delivery. It is possible for a service provider to be efficient and yet spoil the meal experience by looking miserable or treating the customer with contempt. Without doubt, service providers can have a positive or negative effect on customers’ levels of satisfaction when eating at a restaurant and, in turn, levels of customer satisfaction are related to their tipping propensities. In the context of entrepreneurship, Butler and Snizek (1978) advised product promotional activity, increased ritualisation (emphasis on the service act) and friendly rapport techniques (reduce social distance between customer/waiter; ingratiate the customer) to maximise sales. Then Campbell (1988) refuted these ideas and stated that ‘gratuities are as varied and unpredictable as people. There are no hard and fast rules and a customers’ feast can be a waiter’s famine’. The differing needs and wants of customer types were discussed by Mars and Nicod (1984), who noticed that: usually, men are better tippers than women, especially if accompanied by a partner of the opposite gender; older people are ‘better tippers’ than younger ones; customers with children, those on package tours, large parties and the socially insecure are ‘low tippers’. Further to this, Sparrow et al. (1992) perceived certain subgroups of the population, such as business or family diners, large groups or couples to have different wants and expectations in a restaurant. They proposed that experienced staff might tailor their service accordingly to increase customer satisfaction. Casado (1994) expanded on these assertions by offering advice to service providers in terms of tailoring their service: guests in a hurry require speedy service; solo guests generally appreciate some conversation; guests who expect special recognition should be accorded extra attention; some guests need help with their menu selections whereas others may be irritated by an insistent explanation. Jackson (1988) reported business customer perspectives on tipping: ‘one is naturally familiar with what might be called strategic tipping, rich men swear by it. A tenner in Gaston’s hand as soon as you come to the restaurant works wonders 2 it is far easier to spot bad tippers than good ones. Something about their demeanour from the moment they sit down 2’ Benton (1990) said: ‘in some cases giving may temporarily improve the lot of an individual whereas for others it will ensure or reward good service’, then Low (1994) wrote: ‘when the doorman or room service attendant starts to lurk in that certain way, even the most reluctant tippers usually lose their nerve and reach into their pockets to ease their embarrassment’. In essence, it appears that some guests tip to press servers into action and, at the other extreme, the servers press guests into tipping! It is clear that certain unwritten

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assumptions are made by staff as to differing customer needs and, if these are at least satisfied, the likelihood of a tip should increase (Economic Development Committee for Hotels and Catering, 1968; Mars and Nicod, 1984).

2.1. Tipping, service and customer expectations Parasuraman et al. (1988) argued that service quality equals the difference between the expected service and the service experienced. It appears that customers’ perceptions of these service quality differences or gaps (Saleh and Ryan, 1991) have some bearing on their propensities to tip. In a similar vein, Zeithaml et al. (1991) introduced the concept of zones of tolerance within which Liljander and Strandvik (1993) estimated customers’ willingness to pay. As criteria such as feelings, mood and occasion were not considered by Parasuraman et al., the findings from a report (Economic Development Committee for Hotels and Catering, 1968) together with Barrington and Olsen’s (1987) anticipation and residue theory seemed to offer a useful adjunct to their SERVQUAL criteria. Although the study was criticised for ignoring variables pertaining to value for money, service quality and food quality, and for missing the opportunity to measure differences between subgroups, the effect of certain personal attitudes or opinions on tipping (N"2000#) had been examined (Economic Development Committee for Hotels and Catering, 1968). The top eight reasons for tipping were: a good way of showing gratitude (53%); the accepted practice (50%); embarrassment (30%); staff need the extra income from tips (19%); not tipping means bad service next time (13%); tipping means good service next time (13%); it helps round off the bill (7%); it promotes feelings of generosity (7%). Much later, Barrington and Olsen (1987) put customer expectations into the context of a restaurant situation with their ‘residue’ concept after leaving a restaurant customers begin to evaluate the experience; they must take away memories of a positive experience, especially from a first time visit. The residue factor offers staff opportunities to deal with negative experiences and transform them into positive ones. Barrington and Olsen (1987) renamed ‘expectation’ as ‘anticipation’ and split it into seven areas: value system, utility, occasion, emotion, risk, financial and reference bank. If, for any reason, the meal anticipation is below customer expectations, as positive memories are more fixed than negative ones over time (Lindsay and Norman, 1979), the problem must be dealt with effectively so that it becomes a positive experience. Otherwise, customers take away the memory of bad service, dwelling on the fact that they were not compensated. Barrington and Olsen (1987) argued that customers’ only way of gaining some sort of compensation was then to avoid and decry the restaurant or its staff.

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Based on the above evidence, tipping decisions appear to be affected by customers’ attitudes or opinions with regard to their anticipation/expectations compared to the actual experience, the quality residue and certain customer-specific variables connected with that particular dining occasion or personal moods and feelings. It was hypothesised that tipping is related not only to service provision and service/product delivery but also to the predispositions and preconceptions of customers.

3. Methodology Within the above categories, three lists of potential reasons for tipping/not tipping (questionnaire items) were established. Data were collected using two threepart questionnaires, one for the tipping and the other for the non-tipping population. Thirty-six items were derived from the literature supplemented by observations and discussion with service providers and managers (Martin, 1994). Using this information, each item was allocated to one of each of three hypothesised categories as follows, namely, service provision (N"12), service/ product delivery (N"10) and predispositions and preconceptions of customers (N"16). The 22 items allocated to the first two categories are listed in Tables 3 and 4. The remainder were in the affective domain (Krathwohl et al., 1964) and are listed (refer Results (2)) although not discussed in detail in the context of this particular study. Using a five-point horizontal numeric scale (Oppenheim, 1986), where ‘1’ was ‘no effect’ and ‘5’ was ‘a great effect’, respondents rated the extent to which each item affected their tipping decision. With a few exceptions, the ‘nontipping’ questionnaire was a negative of the ‘tipping’ version (See Tables 3 and 4 for clarification). Further to the scaled items, the interviewees were asked to provide demographic and situation-linked (cf. Sparrow et al., 1992) information including details regarding the nature and type of the visit, i.e., if the meal was for business or leisure, the nature and size of the party, their occupations (from which an indication of their social grade was derived using National Readership Survey 1991—1992 definitions) age and gender. Overall restaurant and service quality ratings (scale 1—5 as before) and a record of any inclusive compulsory service charge at the restaurant completed the data collected. Following 20 pilot street interviews, the questionnaires were shortened by combining similar reasons and a few customer-sourced reasons were added. The revised version took about 10 min to administer. Almost 30% of the pilot sample had not left a tip on their last restaurant visit. Some of these people never left a tip. A decision was taken to interview only people who claimed to ‘normally leave a tip’. As the data were collected by street interviews, the emphasis was on measuring straightforward variables which could be observed immediately or assessed quickly and objectively in

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conversation by service providers; complex dimensions which required predominantly subjective assessments of the interviewees, such as personality features and their ‘customer’ motivations, were avoided. Having ascertained the information base, those features which might be influenced by service provision and service/product delivery were linked to customer profiles with a view to the findings being used to enable service providers to maximise their effect on tipping decisions. The face-to face interviews took place in Summer 1995 at five sites each within a 10 mile radius of a large UK city centre. The interviewer used quota sampling (200#) and recorded the responses manually. Only people who had eaten in a restaurant in the previous 10 days and had been responsible for paying the bill personally were questioned, so that the experience was still fresh in their minds. The specific time and date of each respondent’s ‘last eating-out experience’ was not recorded in this preliminary study. However, the name of the restaurant was recorded and checked later to ensure that it matched the earlier definition. The sample of 207 useable questionnaires was composed as follows: Nature of visit Purpose of visit: Social Grade: Age: Gender: Party composition by gender: Dining alone: Party composition by nature Party composition by size: Children in party

First (45%), Repeat (55%) Business (33%), Leisure (67%) A and B (52%), C1 and C2 (22%), D and E (26%) 18–25 (24%), 26–40 (36%), 41–55 (26%), 56#(14%) Male (66%), Female (34%) Mixed gender (54%), Single gender (46%) Yes (11%), No (89%) With partner (34%), Other (66%) 1 (11%), 2 (52%), 3 (11%), 4 (15%), 4# (11%) Yes (8%), No (92%)

It is acknowledged that the data collected are not representative of the UK population as a whole with respect to gender and Social Grade (cf. National Readership Survey, 1991—1992). Although an attempt was made

to stratify the initial quota by gender and social class, the above distribution arose as a result of the above exclusion criterion (in italics). Nevertheless, it is postulated that the sample is likely to be fairly representative for the area under study. Frequencies, descriptive statistics and preliminary chi-square and t-tests were followed by correlational analyses. Key dimensions pertaining to reasons for tipping/not tipping were produced through confirmatory factor analysis (principal components varimax rotation). t-tests identified differences between the factor means of the sample strata; significance levels are reported at 5, 1, 0.1% and N.S. (not statistically significant at 5% or below).

4. Results The results are reported in relation to (i) the propensity of customers to tip, (ii) the effect of service and personal dimensions on customers’ propensities to tip and (iii) customer segmentation according to propensity to tip. (1) ¹he propensity of customers to tip. One hundred and forty-nine (72%) of the respondents had left a tip and 58 (28%) had not on the visit under scrutiny. Firstly, the propensity to leave a tip was explored using t-tests based on perceptions of the overall quality ratings of the service and the restaurant (Refer Table 1). It may be seen that in each case, there was a statistically significant difference (p"0.001) between the customers’ ratings according to whether or not they had left a tip. These results suggest that customers’ perceptions of quality are closely associated with their propensities to leave tips. The reasons for this phenomenon are explored in detail in subsection (ii). The next issue under consideration pertained to the propensity of subgroups of the research population to leave a tip. This enquiry centred on the subgroups listed in Table 2 and chi- square tests were employed. The first statistically significant result (p"0.001) in Table 2 suggests that the propensity of repeat visitors to leave a tip is very high (82%) in comparison with first time visitors (48%). With respect to the customers’ reasons for dining out, 78%

Table 1 A comparison of the overall quality ratings with customers’ propensity to tip using t-tests Left a tip on last visit Yes

No

(N"149)

(N"58)

(p-value)

t-value

Quality rating (N"207) Overall service quality rating (1 low!5 high)

Mean S.D.

3.48 0.98

1.98 0.87

t"10.77 (p"0.001)

Overall restaurant quality rating (1 low!5 high)

Mean S.D.

3.46 0.90

2.91 0.82

t"4.20 (p"0.001)

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Table 2 A comparison of the propensity of subgroups to tip using chi-square tests Left a tip on last visit

Variable

Subgroup

Yes (N"149)

No (N"58)

P-value (p-value)

Previous customer, i.e., repeat visitor

Yes No Business leisure A/B C1/C2 D/E 18—40 41# Male Female Mixed Single Couple Other Yes No )4 '4 Yes No

104 45 41 108 70 39 40 84 65 94 55 87 62 57 92 19 130 139 10 11 138

10 48 27 31 37 7 14 43 15 42 16 24 34 14 44 3 55 46 12 6 52

P"46.6 (p"0.001) P"6.85 (p"0.01) P"6.14 (p"0.05)

Purpose of visit to restaurant Social grade

Age group Gender Party composition by gender Party composition by nature Dining alone Party composition by size Children in party

(N"108) of the leisure, as opposed to 60% (N"41) of the business, customers left a tip. In terms of social grades (p"0.05), the C1/C2s were most likely to tip (84%), followed by the D/Es (74%) then the A/Bs (65%). This finding contrasted with that of Mars and Nicod (1984). It should be noted at this point that membership of the higher (A/B) social grade was associated closely with membership of the business category (r"0.49; p"0.001). Preliminary exploration of the data resulted in the age ranges being regrouped into two categories. People over 40 years of age (81%) were more likely (p"0.05) than those between 18 and 40 (66%) to leave a tip (cf. Mars and Nicod, 1984). Although generally gender alone was not significantly associated with propensity to tip, mixed groups of diners were found to be more likely (p"0.05) than single gender groups to leave a tip (78%, cf. 65% respectively). In particular, couples had a statistically significantly (p"0.05) higher propensity to leave a tip (80%) than the remainder of the parties (68%). This difference was not apparent if the pair was defined as ‘friends’ as opposed to being a ‘couple’! Although only a minority (11%) of the parties was ‘large’, when party size was taken into account, 75% of the parties with fewer than five people left a tip in contrast with only 45% of the larger groups (p"0.01). Parties including children and lone diners constituted only 9 and 11% of the sample respectively and there were no apparent differences in their propensities to tip. However, an inspection of the

P"5.55 (p"0.05) P"1.61 (N.S.) P"4.86 (p"0.05) P"3.7 (p"0.05) P"2.54 (N.S.) P"8.59 (p"0.01) P"0.49 (N.S.)

distribution of the responses in Table 2, bearing in mind previous research (Mars and Nicod 1984), suggests that exploration of a larger sample might yield some interesting results in the context of party size and composition; small subgroup samples precluded their further consideration at present. (2) ¹he effect of service and personal dimensions on customers’ propensities to tip. An inspection of their intercorrelations ratified the decision to divide the 22 relevant items common to both questionnaires (N"207 respondents) into two subgroups relating to service provision (N"12) and service/product delivery (N"10). Each subgroup of variables was subjected to factor analysis. Further to this, the personal dimensions considered to be in the affective domain were factor analysed. The service provision and service/product delivery variables are considered to be those which could be affected by service providers or other staff, including managers, in the restaurant. The affective domain variables comprised those items which are predominantly outside the influence of the restaurant staff, including the service providers. The results from the service quality dimensions of the factor analysis are displayed in Tables 3 (service provision) and 4 (service/product delivery). Differences between the positive and negative items from each of the questionnaires are signalled using parentheses. In each case, the magnitude of the factor scores was indicative of the effect of the component variables on customers’ tipping decisions. The communalities of the service provision variables

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Table 3 Varimax rotated factor matrix for service provision variables (N"207) Factors 1

Variables

2

3

Reliability

Presentability Service provider (not) clean and (not) well-presented Staff (in) flexible and (un) willing to help Service provider was (not) good communicator Did (not) have to wait too long for order Service provider (not) knowledgeable and (in) experienced Service provider (im) polite and (dis) respectful

0.718

0.725 0.713 0.698 0.584 0.537 0.505

¹ransactionalisation Service Service Service Service

provider provider provider provider

(not) apologetic for errors did not try (tried) to hard sell (not) friendly and easy to talk to enjoyed (did not enjoy) the work

0.756

0.772 0.751 0.738 0.591

Perpetuity of standards Customer (not) known to/(not) recognised by staff Service (not) as good as usual Eigenvalues 4.66 1.45 Percentage of explained variance 38.8 12.1 Total explained variance 60.1 Kaiser—Meyer—Olkin (sampling adequacy)"0.831; Bartlett test of sphericity p"0.001 (Norusis, 1993)

ranged from: 0.42 ‘Customer (not) known to/(not) recognised by staff ’ to 0.73 ‘Did (not) have to wait too long for order’ and of the service/product delivery variables from 0.49 ‘Food order was above (below) expectations’ to 0.82 ‘Good (poor) value for money and large (small) portions’. From Table 3, one may observe three emergent factors, namely, presentability (cf. Parasuraman et al., 1988: responsiveness; assurance; Dahmer and Kahl, 1988: knowledgeable; cooperative), transactionalisation (cf. Parasuraman, et al., 1988: courtesy; Dahmer and Kahl: personable; persuasiveness; perpetuity of standards (cf. Parasuraman et al., 1988: empathy; reliability; Dahmer and Kahl, 1988: reliable) — the latter was seen to be meeting the expectations of repeat customers. The service/product delivery dimension comprised a further three factors as displayed in Table 4, namely product quality, value and adequacy (staff and facilities). To complete the picture, the personal dimension (predispositions and preconceptions of the customers) was explored. The detail is not presented here because, as stated above, the affective domain was considered to be outside the aim and scope of this paper. However, for interest and the sake of completeness, the composite variables which arose from a third factor analysis centred on the customer’s personal reasons/opinions (pertaining to: the customer’s mood, possible fellow diners’ impressions; the nature of the occasion; unfounded notions about the service provider; the need to ‘round off the bill’), rationalisation (relating to perceptions of: the ‘class’ of the restaurant; the potential effect on future visits; the needs of the staff), social (in)security (embarrassment; obligation)

0.824 0.816 1.10 9.2

0.660

and self-justification (previous tipping practices; displays of feelings; self-satisfaction). Taking an overview of the ranking of the factor means (refer Table 5), it may be seen that service/product delivery features (a high quality product offering value) had a greater impact on the customers’ tipping decision than service provision (E Diff. in ranks"13 cf. E Diff. in ranks"5). This finding suggests that, however, good the service provision, it is harder for the service provider to earn a tip if the service/product delivery (product quality and value) is below the ‘acceptable’ or expected standard. In contrast, although, the customers’ decisions not to leave a tip were most influenced by inadequate staffing and facilities, the service provision variables featured relatively highly. There appears to be little doubt that poor service provision also promotes customer unwillingness to leave a tip. (3) Customer segmentation according to propensity to tip. In order to segment the market according to the likelihood of particular subgroups to leave a tip so that attention might be concentrated in the appropriate service provision or service/product delivery factors, a matrix was produced (refer Table 6). Within the matrix, the result of a series of t-tests for the tipping subsample only (N"149) are recorded. It may be noted that one cell is marked N/A because the test was invalid due to a small subgroup sample and that a significant difference was apparent only when the Social Grade categories were combined, i.e. to compare A/Bs with the remainder. On inspection of the cell contents, it is clear that certain variables may be linked with each factor in

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Table 4 Varimax rotated factor matrix for service/product delivery variables (N"207) Factors 1

Variables

2

3

Reliability

Product quality Good (poor) quality food served at (in)correct temperature Food order was above (below) expectations (ºn)pleasant/(un)comfortable environment Clean (dirty) table/utensils Product did (not) meet customer expectations Extensive (limited) menu/drinks list

0.818

0.802

0.684 0.683 0.670 0.632 0.571

»alue Good (poor) value for money and large (small) portions Value for money better (worse) than expected

0.901 0.876

0.847

Adequacy (staff and facilities) (Not) easy to get the service provider’s attention (Not) easy to get a table

0.884 0.594

Eigenvalues 3.38 2.06 Percentage of explained variance 33.8 20.6 Total explained variance 65.1 Kaiser—Meyer—Olkin (sampling adequacy)"0.731; Bartlett test of sphericity p"0.001 (Norusis, 1993)

0.486

1.07 10.7

Table 5 The relative effect of the service provision and service/product delivery factors on the customers’ tipping decision Ranking of relative effect on decision: Category: factor

To tip (N"149)

Not to tip (N"58)

Difference in rankings

Service provision: Presentability Service provision: ¹ransactionalisation Service provision: Perpetuity of standards Service/product delivery: Product quality Service/product delivery: »alue Service/product delivery: Adequacy (staff and facilities)

5 3 4 1 2 6

2 4 3 6 5 1

3 1 1 5 3 5

that they had a statistically significant effect on customers’ tipping decisions to leave a tip. In particular, the propensity of older repeat visitors to tip is associated with perpetuity of standards (p"0.001) whilst leisure diners appreciate the dimensions of the transactionalisation factor (p"0.001). Based on the findings reported in Table 6, taking each factor in turn, the nature of the customers who might comprise the potential tipping population was examined. Reference to Table 7 indicates that service/product delivery factors impinge on mixed parties, regardless of the gender of the person who pays the bill. Of specific import are product quality to older guests, value to repeat visitors from the middle and lower social grades and adequacy to leisure diners. With regard to the service provision factors, the tipping intentions are significantly associated with presentability regardless of who pays the

bill in mixed parties, transactionalisation for mixed or all female parties of leisure diners, but with a female from the middle or lower social grades paying the bill, and perpetuity of standards with either mixed or single gender repeat visitors where the payment is made by someone who is over 40.

5. Discussion From the results it is clear that the majority (72%) of customers leave a tip after eating at a restaurant. Taking a general overview, the data indicate that the best tipping potential (100% in this sample) lies with older couples (40 plus) who are repeat visitors and leisure diners. However, on segmenting the data, this group comprised under 18% (N"37) of the market. When the business element was

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Table 6 The propensity of subgroups of the population to tip using t-tests Likelihood of effect of variable on customer to-leave a tip (N"149) Category: Factor

Nature of visit

Purpose of visit

Social grade

Age group

Gender

Service provision: Presentability

N.S.

N.S.

N.S.

N.S.

Service provision: ¹ransactionalisation

N.S.

Leisure p"0.001

C1/C2/ D/E p"0.01

Service provision: Perpetuity of standards (N"104)

N/A

N.S.

Service/product delivery: Product quality

N.S.

Service/product delivery: »alue

Service/product delivery: Adequacy (staff and facilities)

Nature of party

Type of party

N.S.

Mixed p"0.01

N.S.

N.S.

Female p"0.01

N.S.

N.S.

N.S.

40 plus p"0.001

N.S.

N.S.

N.S.

N.S.

N.S.

40 plus p"0.01

N.S.

Mixed p"0.05

N.S.

Repeat p"0.05

N.S.

C1/C2/ D/E p"0.01

Under 40 p"0.01

N.S.

Mixed p"0.01

With partner p"0.01

N.S.

Leisure p"0.05

N.S.

N.S.

N.S.

Mixed p"0.001

With partner p"0.001

Note: N.S., Not statistically significant at 5% or below; N/A, Not applicable.

Table 7 The nature of the customers who comprise the potential tipping population Potential tipping population Category: factor

Specific party characteristics

Person responsible for bill

Service provision: Presentability

Mixed party

Any member of party

Service provision: ¹ransactionalisation Service provision: Perpetuity of standards Service/product delivery: Product quality Service/product delivery: »alue Service/product delivery: Adequacy (staff and facilities)

Mixed Mixed Mixed Mixed Mixed

Female from social grade C1, C2, D or E Male or female over 40 years Male or femaleover 40 years Male or female from social grade C1, C2, D or E Male or female

or all female party; leisure diners or single gender party; repeat visitors party couple; repeat visitors couple; leisure diners

included (N"53), the tipping percentage fell to 91 which is still well above the overall average. Although the sample which arose from the preliminary screening questions was two-thirds male, the propensity of males to leave a tip was found to be no greater than that of females. The data analysis pointed to mixed groups being more likely to tip than single gender groups and males being less inclined to leave a tip than females under certain circumstances (cf. Mars and Nicod 1984 who claimed that males were more likely to tip than females). Business guests seem to be less likely than their leisure counterparts to tip. The decision whether or not a business person leaves a tip has a unique component — his/her company’s policy on tipping. Some companies permit

their employees to leave a tip of a certain percentage and some do not reimburse tips. Hence, one might categorise business customers four ways: those who tip because they can claim on expenses; those who do not tip despite being able to claim on expenses, those who do tip despite not being able to claim on expenses and finally those who do not tip because they cannot claim on expenses. Further to this, some of interviewees who had dined in large groups were charged for service (usually six or more customers). Consequently they had not left a tip. Others used tipping to ‘round off the bill’, i.e. to simplify dividing the cost among members of the party or group equally to ‘make life easier’, despite on occasions their receiving bad service. Unfortunately, these issues could not be explored further from the data collected.

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It has been stated that customer expectations are a basic component influencing the decisions of the potential tipping population. In this context, product quality, i.e., relating to the food, the extent of the menu and the immediate environment, is of most importance accompanied by presentability. The latter feature comprises certain personal qualities expected by the customer from an adept service provider such as self-presentation, welldeveloped communication and social skills, respectfulness, helpfulness, flexibility and speed of service. 5.1. Implications and recommendations Given that there is variability in the composition of parties, how might service providers improve their chances of receiving tip? Firstly, from the point of entry into the restaurant, they need to observe the customers so that they can categorise them according to gender, age, party composition and, perhaps, responsibility for the bill (apparent party leader). Then the service provision and service/product delivery can be tailored to best meet the customers’ needs, dealing with and rectifying any problems as quickly and smoothly as possible. In order to maximise their opportunities for reward, service providers need to pay particular attention to transactionalisation issues (apologise for errors, try to sell without putting customers under any pressure, approach customers in a friendly unintimidating way, etc.). With respect to all female parties of leisure diners who appear to be from middle/lower social grades, the service provider’s concentration should be on the interpersonal dimension. It is sensible to employ a friendly approach initially, talking to customer and judging how much conversation the customer wants but without being pushy and ensuring adequate but not profuse apology for any errors or problems. If older clients (40#) are ‘in charge’ of a party, service providers should be especially attentive to product quality. If problems arise, such as food served at an incorrect temperature or a glass with a lipstick trace, clearly, it is imperative to apologise and rectify the problem immediately to maintain a satisfactory service provider/customer relationship which, in turn, could have a direct effect on the customer’s propensity to tip. Most importantly, repeat visitors should be acknowledged. Taking an overview, the findings suggest that repeat, possibly older — 40 plus — visitors from the middle and lower social grades show their appreciation if standards are maintained and they receive value for their money. Displays of recognition and a memory for fine, possibly personal, detail are requirements for service providers who should be particularly attentive to the needs of this important market segment. Older people feel relatively secure in a familiar environment. They may like to sit at a ‘regular’ table on repeat visits and enjoy being attended to by a ‘regular’ member of staff.

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An additional pertinent feature of the party, ‘purpose of visit’, may not be salient. However, speed of service could be a prominent service provision feature with business parties. Listening and observational skills together with early communication could help to clarify the issue - are the guests in a hurry? Do they want a relaxed, or relatively uninterrupted, discussion over the meal? In this context, there is an affective domain issue which might colour the tipping decision: leisure groups want to enjoy the meal experience, whereas business diners may have their minds on work or impressing a client. Finally, social grade may not be easy to judge; perhaps this aspect of customer assessment offers the greatest challenge to service providers. On the basis of the findings a series of recommendations are made for: (i) Managers. It is in the interests of the employer that staff make as much money from tips as possible, firstly to reduce the high labour turnover, which is common in the Industry (Mitchell, 1989; Ineson and Brown, 1992), and also to motivate the staff. Bearing these points in mind, and in the light of the comments above, employers may wish to reconsider their work allocation methods. Managers could supplement customer care training with perspectives on how to tailor service to maximise tipping potential. This additional feature could improve not only customer satisfaction but also keep staff happy by raising their take home pay. It would be feasible for companies, chains or units as appropriate to produce a framework for a training manual, offering advice on how to identify, deal with and satisfy, different types of party with particular concentration on how to meet the expectations and needs of repeat guests. Within a computerised accounting system, it is not difficult to set up a database of repeat visitors and record their needs and preferences. Employees could be encouraged to recognise repeat customers and treat them accordingly. Also, continuous monitoring of customer opinion should complement this exercise. To placate the staff perspective that training is a chore, managers need to convince themselves that training, not only in practical skills but also in customer care and psychology, can improve the staff’s financial statuses, increase their popularity with the customers and build up their confidence. Given that the customers’ perceptions of the service/product delivery dimension (product quality, value and adequacy of staff and facilities) can have a profound effect on their propensity to leave a tip, it is incumbent on the managers to support their service providers by optimising those features of the business. When the manager, possibly assisted by the staff, has devised a system for identifying the ideal customer segments, the results can be used to target the optimal market. (ii) Service providers. The findings suggest that service providers should be able to improve their tips by tailoring their service to match the perceived needs and

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E.M. Ineson, A.J. Martin / Journal of Retailing and Consumer Services 6 (1999) 27—37

expectations of their customers. If they can affect their own total take-home pay through increased tips, it is in their own interests to undertake training as well as to stay motivated throughout the working day. Therefore, service providers should take any formal or informal opportunities to be trained in order to appreciate the differences in the needs of subgroups of customers in a restaurant. The nature and type of restaurant in which they might choose to work should be evaluated at, or before, the interview stage if service providers wish to maximise their income. It cannot be assumed that the tipping propensity of the customers is in direct proportion to the hourly rate. For example some restaurants allow employees to share the work, with one person taking orders and other(s) bringing/serving the meal(s). This system might deter tipping because customers do not know if the person who provided the service is the one who will receive the tip. The general quality of the food, overall ‘value for money’, whether waiting the tables is a sole, shared or team activity, as well as the management policy for dealing with tips, are all factors that can affect staff rewards. The types of clientele and their frequency of visit could also be inspected before deciding in which restaurant to work in terms of wage supplements from tips. For example fewer customers in a largely ‘business guest’ hotel restaurant may leave tips than their leisure counterparts in a leisure-oriented hotel restaurant. However, the level of tipping per person may not be assessed purely by a purpose of visit dichotomy. If experienced staff are seeking a new position, they might be able to use some of the ideas put forward in this study to try to predict their chances of maximising their receipts from tips. (iii) Customers. The findings also have implications for restaurant customers. Discussions with the interviewees revealed that some customers are not aware if, and when, they have been charged for service. Perhaps there is justification for a change in the way in which obligatory service charges are communicated to UK customers; it is possible that staff are disguising charges for their personal benefit (note Wanhill 1994). Wingate-Friedrichs (1996) believe that the implementation of a universal service charge is justified: the final price should be the price you pay with no hidden extras, no intimidation and security for staff. In retaliation, Kissan (1996) spoke against legislation as it denies the customers choice. (iv) Data collection issues and further research. Clearly, the research findings would be strengthened if the sample size were larger to increase the validity of the segmentation issues. Also, as the qualitative results suggested that people may tip the opposite gender more often, it would have been useful to record the gender of the service provider. Business people were not always reimbursed for tips they left, the method of payment was not recorded and neither was the time of day or day of the week at which the meal in question was consumed. The extent

to which these factors might affect tipping decisions, in addition to the time of the year, is of interest. It is possible that some of the interviewees responded to the questionnaires according to their general feelings and beliefs, not in accordance with their last restaurant experience. Given that each tipping decision depends on different interactions of the variable sets, some of which might be venue-specific, customers’ propensities to tip could be measured over more than one restaurant, including the percentage of the total bill left as a tip on each occasion. It is clear that the management and/or the operatives can have either a beneficial or a detrimental effect in terms of influencing their customers’ decisions whether or not to tip. Though it may be influenced by preconceptions and predispositions, the propensity to tip is associated closely with perceptions of quality. A repeat visit is normally associated with a ‘quality’ residue; it is not surprising that the repeat visitors had a higher propensity to tip than first-time visitors. The research highlighted the importance of the roles of both the management and the operatives in influencing the customers’ decisionmaking processes and pointed to the importance of both experience and training in this context. The findings from this study may help to raise the awareness of managers and employees to the needs and expectations of their national and international customers and, in turn, impact on service provision and service/product delivery. Without doubt, a comprehensive study to determine both national geographical and international variations in customer tipping propensities would be of benefit to employers, employees and customers.

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