Gratuity

{{Short description|Sum of money customarily tendered to service sector workers}} {{Redirect|Tipping}} {{multiple issues| {{more citations needed|date=February 2022}} {{how-to|date=July 2020}} }} [[Image:20151007 174039-S.jpg|thumb|300px|Leaving some change on the restaurant table is one way of giving a gratuity to the restaurant staff.]]

A '''gratuity''' (often called a '''tip''') is a sum of money customarily given by a customer to certain [[service sector]] workers such as hospitality for the service they have performed, in addition to the basic price of the service.

Tips and their amount are a matter of social [[convention (norm)|custom]] and [[etiquette]], and the custom varies between countries and between settings. In some countries, it is customary to tip [[Waiting staff|server]]s in bars and restaurants, [[taxi]] drivers, [[tattoo artist]]s, [[Hairdresser|hair stylists]] and so on. However, in some places tipping is not expected and may be discouraged or considered insulting.<ref>{{cite journal |last=Saunders |first=S. G. |date=2015 |title=Service employee evaluations of customer tips: an expectations-disconfirmation tip gap approach |journal=Journal of Service Theory and Practice |volume=25 |issue=6 |doi=10.1108/JSTP-07-2014-0148 |pages=796–812}}</ref> The customary amount of a tip can be a specific range or a certain percentage of the bill based on the perceived quality of the service given.

It is illegal to offer tips to some groups of workers, such as U.S. government workers<ref name="5CFR2635">{{cite book|chapter-url=http://www.gpo.gov/fdsys/pkg/CFR-2008-title5-vol3/xml/CFR-2008-title5-vol3-sec2635-204.xml|title=Code of Federal Regulations|chapter=5. Administrative Personnel|date=January 1, 2008|access-date=May 11, 2014|title-link=Code of Federal Regulations}}</ref> and more widely [[police officer]]s, as the tips may be regarded as [[bribery]].<ref>{{cite news|work=[[The Guardian]]|url=https://www.theguardian.com/world/2013/aug/08/nigeria-sergeant-sacked-motorist-bribe-filmed|title=Nigerian sergeant sacked for attempted bribe-taking caught on cameraphone|place=[[Lagos]]|date=August 8, 2013|access-date=May 11, 2014|last=Mark|first=Monica}}</ref> A fixed percentage [[Mandatory tipping|service charge]] is sometimes added to bills in restaurants and similar establishments. Tipping may not be expected when a fee is explicitly charged for the service.<ref name="usatoday.com">{{Cite news |last=Bly |first=Laura |date=August 25, 2005 |title=The Tipping Point: Will Service Charges Replace Voluntary Gratuities? |url=https://www.usatoday.com/travel/news/2005-08-25-tipping_x.htm |archive-url=https://web.archive.org/web/20050909143017/https://www.usatoday.com/travel/news/2005-08-25-tipping_x.htm |archive-date=9 September 2005 |url-status=dead |work=[[USA Today]] |access-date=26 August 2022}}</ref>

According to the U.S. Department of Labor, a tipped employee is a worker who receives more than $30 per month on tips. He or she is required to be paid $2.13 hourly in direct wages provided that the amount combined with the amount received as tip equals the federal minimum wage. If the combined amount does not reach the applicable minimum wage, the employer is expected to make up the difference.<ref name=":0" />

Giving a tip is typically irreversible, differentiating it from the reward mechanism of a placed order, which can be refunded.<ref name="Commerce Clearing House">{{cite book|last=Morgan|first=Daniel|url=https://books.google.com/books?id=-v6RAQAACAAJ|title=Employees and Independent Contractors|date=1990|access-date=October 21, 2017}}</ref> From a theoretical economic point of view, gratuities may solve the [[principal–agent problem]]<ref name=videbeck /> (the situation in which an agent, such as a server, is working for a principal, such as a restaurant owner or manager) and many managers believe that tips provide incentive for greater worker effort.<ref name=graham/> However, studies of the practice in America suggest that tipping is often discriminatory or arbitrary: workers receive different levels of gratuity based on factors such as age, sex, race, hair color and even breast size, and the size of the gratuity is found to be only tenuously related to the quality of service.<ref name="freak">{{cite news|url=http://freakonomics.com/2013/06/03/should-tipping-be-banned-full-transcript/|title=Should Tipping be Banned?|date=June 3, 2013|publisher=freakonomics.com|access-date=July 21, 2017|archive-date=March 22, 2021|archive-url=https://web.archive.org/web/20210322154343/http://freakonomics.com/2013/06/03/should-tipping-be-banned-full-transcript/|url-status=dead}}</ref>

According to the ''[[Oxford English Dictionary]]'', the word "tip" originated as a slang term and its etymology is unclear. According to the ''[[Online Etymology Dictionary]]'', the meaning "give a small present of money" began around 1600, and the meaning "give a gratuity to" is first attested in 1706.<ref name="etymonline.com">{{cite web |url = http://www.etymonline.com/index.php?term=tip&allowed_in_frame=0 |title = tip |last = Douglas |first = Harper |website = Online Etymology Dictionary |access-date = 11 November 2013 }}</ref><ref name="todayifoundout.com">{{cite web |url = https://www.todayifoundout.com/index.php/2012/09/what-is-the-origin-of-the-word-tip-as-in-leaving-a-tip/ |title = What is the origin of the word tip |last = Daven |first = Hiskey |website = Today I Found Out |date = 14 September 2012 |access-date = 31 December 2022 }}</ref> The noun in this sense is from 1755. The term in the sense of "to give a gratuity" first appeared in the 18th century. It derived from an earlier sense of ''tip'', meaning "to give; to hand, pass", which originated in the [[thieves' cant]] in the 17th century. This sense may have derived from the 16th-century "tip" meaning "to strike or hit smartly but lightly" (which may have derived from the [[Low German]] ''tippen'', "to tap"), but this derivation is "very uncertain".<ref name="oed2">"tip, ''v''.<sup>4</sup>" ''[[Oxford English Dictionary]]''. 2nd ed. 1989. [[Oxford University Press]]. {{ISBN|0-19-861186-2}}.</ref> The word "tip" was first used as a verb in 1707 in [[George Farquhar]]'s play ''[[The Beaux' Stratagem]]''. Farquhar used the term after it had been "used in [[criminal]] circles as a word meant to imply the unnecessary and gratuitous gifting of something somewhat taboo, like a joke, or a [[sure bet]], or illicit money exchanges."<ref>{{cite news |url=https://www.theatlantic.com/health/archive/2010/10/the-case-against-tipping/63913/|title=The Case Against Tipping|work=[[The Atlantic]]|last=Hendel|first=John|date=October 1, 2010|access-date=July 21, 2017}}</ref>

The etymology for the synonym for tipping, "gratuity", dates back either to the 1520s, from "graciousness", from the French ''gratuité'' (14th century) or directly from Medieval Latin ''gratuitas'', "free gift", probably from earlier Latin ''gratuitus'', "free, freely given". The meaning "money given for favor or services" is first attested in the 1530s.<ref name="etymonline.com" /> In some languages, the term translates to "drink money" or similar: for example ''pourboire'' in French, ''Trinkgeld'' in German, ''drikkepenge'' in Danish, ''[[drinksilver]]'' in [[Middle Scots]], and ''napiwek'' in Polish. This comes from a custom of inviting a servant to drink a glass in honour of the guest, and paying for it, in order for the guests to show generosity among each other. The term ''bibalia'' in Latin was recorded in 1372.<ref>{{Cite book|last=Neuwirth|first=Joseph|title=Die Wochenrechnungen und der Betrieb des Prager Dombaues 1372–1378|publisher=O. Beyer|year=1890|location=Prague|page=44|language=de|oclc=458860548}}</ref>

==History==

The practice of tipping began in [[Tudor England]].<ref name="nytimes.com">{{cite news |url=https://www.nytimes.com/2008/10/12/magazine/12tipping-t.html |title=Why Tip?|work=[[The New York Times]]|last=Wachter|first=Paul|date=October 9, 2008|access-date=July 21, 2017}}</ref> In medieval times, tipping was a master-serf custom wherein a servant would receive extra money for having performed superbly well.<ref>{{Cite magazine|title='It's the Legacy of Slavery': Here's the Troubling History Behind Tipping Practices in the U.S.|url=https://time.com/5404475/history-tipping-american-restaurants-civil-war/|access-date=2021-11-21|magazine=Time|language=en}}</ref> By the 17th century, it was expected that overnight guests to private homes would provide sums of money, known as vails, to the host's servants. Soon afterwards, customers began tipping in London [[coffee house|coffeehouses]] and other commercial establishments".<ref name="nytimes.com" />

The practice was imported from Europe to America in the 1850s and 1860s by Americans who wanted to seem aristocratic.<ref>{{Cite news|title=I dare you to read this and still feel good about tipping|language=en-US|newspaper=Washington Post|url=https://www.washingtonpost.com/news/wonk/wp/2016/02/18/i-dare-you-to-read-this-and-still-feel-ok-about-tipping-in-the-united-states/|access-date=2021-11-21|issn=0190-8286}}</ref> However, until the early 20th century, Americans viewed tipping as inconsistent with the values of an egalitarian, democratic society, as the origins of tipping were premised upon [[noblesse oblige]], which promoted tipping as a means to establish social status to inferiors.<ref name="Segrave1998">{{cite book|last1=Segrave|first1=Kerry|title=Tipping: An American social history of gratuities|publisher=McFarland & Company|year=1998|isbn=0786403470|location=Jefferson, North Carolina}}</ref> Six American states passed laws that made tipping illegal. Enforcement of anti-tipping laws was problematic.<ref name="Segrave1998" /> The earliest of these laws was passed in 1909 (Washington), and the last of these laws was repealed in 1926 (Mississippi).<ref name="Segrave1998" /> Some have argued that "The original workers that were not paid anything by their employers were newly freed slaves" and that "This whole concept of not paying them anything and letting them live on tips carried over from slavery."<ref>{{cite news|last1=Shanker|first1=Deena|date=9 February 2016|title=How American tipping grew out of racism|work=[[Quartz (publication)]]|url=http://qz.com/609293/how-american-tipping-grew-out-of-racism/|access-date=9 February 2016}}</ref><ref>{{cite podcast|url=https://www.sporkful.com/the-restaurateur-who-got-rid-of-tipping/|title=The Restaurateur Who Got Rid Of Tipping|website=The Sporkful|publisher=WNYC|host=Dan Pashman|date=2 January 2017|time=5:04|access-date=13 March 2017}}</ref><ref>{{Cite magazine|title='It's the Legacy of Slavery': Here's the Troubling History Behind Tipping Practices in the U.S.|url=https://time.com/5404475/history-tipping-american-restaurants-civil-war/|access-date=2020-11-14|magazine=Time}}</ref>

Also, proprietors regarded tips as equivalent to bribing an employee to do something that was otherwise forbidden, such as tipping a waiter to get an extra large portion of food.<ref name="Segrave1998" /> However, the introduction of [[Prohibition]] in the US in 1919 had an enormous impact on hotels and restaurants, who lost the revenue of selling alcoholic beverages. The resulting financial pressure caused proprietors to welcome tips, as a way of supplementing employee wages.<ref name="Mentzer2013">{{cite journal|last=Mentzer|first=Marc S.|date=September 2013|title=The payment of gratuities by customers in the United States: An historical analysis|url=https://harvest.usask.ca/handle/10388/14275 |journal=International Journal of Management|volume=30|issue=3|pages=108–120|issn=0813-0183}}</ref> Contrary to popular belief, tipping did not arise because of servers' low wages, because the occupation of waiter (server) was fairly well paid in the era when tipping became institutionalized.<ref name="Mentzer2013" />

==Reasons for tipping== Tipping researcher Michael Lynn identifies five motivations for tipping:<ref name=":0">{{cite web |url=https://www.pbs.org/newshour/economy/why-do-we-tip |title=Why do we tip? |website=[[PBS]] |date=26 March 2016|last=Saltzman|first=Melanie|last2=de Melker|first2=Saskia}}</ref> * Showing off * To supplement the server's income and make them happy * For improved future service * To avoid disapproval from the server * A sense of duty

A 2009 academic paper by economics professor Steven J. Holland calls tipping "an effective mechanism for risk sharing and welfare improvement" which reduces the risk faced by a customer when purchasing a service of "uncertain quality", because the customer can decide whether or not to tip, thereby "making part of the price of the service discretionary".<ref>{{Cite journal |last=Holland |first=Steven J. |date=2009-08-01 |title=Tipping as risk sharing |url=https://www.sciencedirect.com/science/article/pii/S1053535709000225 |journal=[[The Journal of Socio-Economics]] |volume=38 |issue=4 |pages=641–647 |doi=10.1016/j.socec.2009.02.001 |issn=1053-5357}}</ref> Tipping is sometimes given as an example of the [[principal–agent problem]] in economics. One example is a restaurant owner who engages servers to act as agents on his behalf.<ref name="videbeck">{{cite news |url=https://www.cis.org.au/app/uploads/2015/04/images/stories/policy-magazine/2004-summer/2004-20-4-steen-videbeck.pdf|title=The Economics & Etiquette of Tipping|work=[[The Centre for Independent Studies]]|last=Videbeck|first=Steen|date=Summer 2004–05|access-date=July 21, 2017}}</ref> In some cases, "[c]ompensation agreements [can] increase worker effort [...] if compensation is [...] tied to the firm's success" and one example of such a compensation agreement is waiters and waitresses who are paid tips.<ref name="graham">Robert J. Graham. ''Managerial Economics for Dummies''. John Wiley & Sons, Feb 14, 2013</ref> Studies show however that, in the real world, the size of the tip is only weakly correlated with the quality of the service and other effects dominate.<ref name="freak" />

==Tronc== A term primarily used in the United Kingdom,<ref>{{Cite web |last=Berr |first=Jonathan |date=20 March 2018 |title=Ferro's Legacy At Tronc: The Dumbest Name In The History Of Corporate America |url=https://www.forbes.com/sites/jonathanberr/2018/03/20/tronc-is-the-dumbest-name-in-the-history-of-corporate-america/ |access-date=2026-04-24 |website=[[Forbes]] |language=en}}</ref> a ''tronc'' is an arrangement for the pooling and distribution to employees of tips, gratuities and/or service charges in the hotel and catering trade. The person who distributes monies from the tronc is known as the troncmaster. In the UK, where a tronc exists, responsibility for deducting [[pay-as-you-earn tax]]es from the distribution may lie with the troncmaster rather than the employer.<ref>{{Cite web|url=https://webarchive.nationalarchives.gov.uk/ukgwa/+/http://www.hmrc.gov.uk///manuals/echmanual/ECH13010.htm|archive-url=https://webarchive.nationalarchives.gov.uk/20110204191501/http://www.hmrc.gov.uk///manuals/echmanual/ECH13010.htm|url-status=dead|title=UK Government Web Archive|archive-date=February 4, 2011|website=webarchive.nationalarchives.gov.uk}}</ref><ref>{{cite news|url=https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/430329/E24_2015_v1_0.pdf|title=Tips, Gratuities, Service Charges and Troncs|date=March 28, 2014|work=[[HM Revenue and Customs]]|access-date=July 21, 2017}}{{Dead link|date=June 2024 |bot=InternetArchiveBot |fix-attempted=yes }}</ref>

==Mandatory tipping== {{Main|Mandatory tipping}}

Tipping may not be expected when a fee is explicitly charged for the service.<ref name="usatoday.com" /> A [[service charge]] is sometimes added to bills in restaurants and similar establishments. Attempts to hide service charge by obscuring the line on the receipt have been reported.<ref>{{cite news|author=Trevor White |url=https://www.theguardian.com/lifeandstyle/2006/aug/20/foodanddrink.features6 |title=newspaper: Confessions of a restaurant critic |newspaper=Guardian |date= 2006-08-20|access-date=2012-02-06 |location=London}}</ref> A service charge, or fee assessed, is determined by and paid directly to the company. The charges may be for services rendered, administrative fees, or processing cost.<ref name="Service Charge">{{cite web |title=Service Charge |url=https://www.investopedia.com/terms/s/service-charge.asp |website=Investopedia |access-date=November 3, 2019 |date=June 2, 2019}}</ref>

In the United States, criminal charges were dropped in two separate cases over non-payment of mandatory gratuities. Courts ruled that ''automatic'' does not mean ''mandatory''.<ref>{{cite news|url=http://www.nbcphiladelphia.com/news/local/Theft-Charges-Dropped-Against-No-Tip-Couple--71865807.html|work=[[WCAU|NBC10]]|title=Philadelphia: Theft Charges Dropped Against No-Tip Couple|date= November 24, 2009|access-date=May 11, 2009|first=Danielle|last=Johnson}}</ref><ref name="nytimes_2004-09-15">{{cite news|url=https://www.nytimes.com/2004/09/15/nyregion/15tipper.html?_r=2|work=[[New York Times]]|title=A Mandatory Gratuity Is Just a Tip, and Thus Not Mandatory, a Prosecutor Says|date=September 25, 2004|access-date=May 11, 2014}}</ref> Some [[Cruise line|cruise lines]] charge their patrons US$10 per day in mandatory tipping;<ref>{{cite web|url=https://www.cruiseaway.com.au/blog/service-tips/gratuities/|title=Overview: Cruise line tipping (infographic) |publisher=Cruiseaway.com.au Blog|date=2016-09-14|language=en-US|access-date=2016-09-27}}</ref> this does not include extra gratuities for alcoholic beverages.<ref name="usatoday.com"/>

==By region== {{main|List of tipping customs by country}}

==Criticisms==

===Inconsistency of percentage-based gratuities=== [[File:William Powell Frith The crossing sweeper 1893.jpg|thumb|200px|[[Crossing sweeper]]s cleared the way for rich people to cross the road without dirtying their clothes and they were normally tipped for this service (London, 1893). A similar service in modern times is offered by "[[squeegee men]]" who clean vehicle windshields while stopped for traffic lights (often without the consent of the driver).]] In countries where tipping is the norm, some employers pay workers with the expectation that their wages will be supplemented by tips. Some have criticized the inherent "social awkwardness" in transactions that involve tipping, the inconsistency of tipping for some services but not similar ones, and the irrationality of basing tips on price, rather than the amount and quality of service (a customer pays a larger tip to a server bringing a lobster rather than a hamburger, for example).<ref>{{Cite news|url=https://news.bbc.co.uk/2/hi/programmes/from_our_own_correspondent/7927983.stm|title=The mechanics of tipping US-style|date=2009-03-07|work=BBC News|access-date=2010-03-28}}</ref>

===Travellers following home rather than local customs=== Some nationalities, such as people from the United States, are used to paying tips, and often do so even when they visit countries where this is less of a norm. In contrast, tourists from such countries may neglect or even refuse to pay tips when they visit countries such as the US where tips are expected. This is particularly common in American cities along the Canadian border, and is seen as a problem by many in the hospitality sector.<ref>{{cite news |last1=Byrnes |first1=Mark |title=Are Canadian Tourists Bad Tippers? |url=https://www.bloomberg.com/news/articles/2015-05-04/are-canadians-bad-tippers |access-date=30 May 2021 |work=Bloomberg CityLab |publisher=Bloomberg |date=4 May 2015 |ref=Citylab}}</ref>

===Moral aspects=== Some service providers may view tipping as derogating to their occupation, as "a token of inferiority".<ref>{{cite news |last1=Rev. Dr. Barber II |first1=William J. |title=The Racist History of Tipping |url=https://www.politico.com/magazine/story/2019/07/17/william-barber-tipping-racist-past-227361/ |access-date=23 July 2021 |work=Politico Magazine |publisher=Politico |date=17 July 2019 |ref=Politico}}</ref> In ''The Itching Palm'', a 1916 critique of tipping, American writer William R. Scott wrote: "The relation of a man giving a tip and a man accepting it is as undemocratic as the relation of master and slave. A citizen in a republic ought to stand shoulder to shoulder with every other citizen, with no thought of cringing, without an assumption of superiority or an acknowledgment of inferiority."<ref name="The Itching Palm">{{cite book |last1=Scott |first1=William R. |title=The Itching Palm: A Study of the Habit of Tipping in America |date=1916 |publisher=The Penn Publishing Company |location=Philadelphia |page=51 |url=https://www.gutenberg.org/files/33170/33170-h/33170-h.htm}}</ref> Around the same time, Australian senator [[Myles Ferricks]] criticised tipping in a parliamentary speech as [[anti-egalitarian]] and "encouraging servility among working people".<ref>{{Cite Au Senate|Sen id=myles-aloysius-ferricks|name=FERRICKS, Myles Aloysius (1875–1932)|first=Rodney|last=Sullivan|access-date=18 May 2026|year=2000}}</ref>

===Discrimination=== In the episode of the ''[[Freakonomics Radio|Freakonomics]]'' [[podcast]] Lynn found that "attractive waitresses get better tips than less attractive waitresses. Men’s appearance, not so important". Lynn's research also found that "blondes get better tips than brunettes. Slender women get better tips than heavier women. Large breasted women get better tips than smaller breasted women. Surprisingly, at least in the studies I’ve done, women in their 30s get better tips than either younger or older women.” A woman server interviewed for the podcast episode stated: "lost my job because my manager said that I didn’t fit the look of the company, or the restaurant. So I don’t know if it was because I’m a lot more curvier than the other girls or because my skin is darker. I don’t know".<ref name="freak" />

Lynn states of tipping: "It’s [[Discrimination|discriminatory]]. Yes, and the [[Supreme Court of the United States|Supreme Court]] has ruled that even neutral business practices that are not intended to discriminate, if they have the effect of adversely impacting a [[Protected group|protected class]] are illegal. And so it’s not inconceivable to me that there will be a [[class-action lawsuit]] on the part of ethnic minority waiters and waitresses claiming discrimination in terms of employment. And it’s conceivable that tipping might be declared illegal on that basis.”<ref name="freak" />

===Tipflation=== {{main|Tipflation}} In the United States since the 2020s, some argue that there is an increasing expectation for customers to tip more frequently and at higher rates. This is often due to the influence of digital payment systems and changing service industry norms.<ref>https://www.kiplinger.com/personal-finance/spending/tipflation</ref>

==References== {{Reflist|colwidth=30em}}

==Further reading== * {{Cite journal |last=Azar |first=Ofer H. |date=Spring 2020 |title=The Economics of Tipping |journal=Journal of Economic Perspectives |volume=34 |issue=2 |pages=215–236 |doi=10.1257/jep.34.2.215 |doi-access=free}}

==External links== {{Wikivoyage|Tipping}} * [https://www.tippingresearch.com/most_recent_tipping_papers.html Collection of research papers on tipping] by Michael Lynn * [https://thetyee.ca/Life/2004/08/16/TippingTrouble/ The Trouble with Tipping] * [http://gospain.about.com/od/spanishlife/qt/tippinginspain.htm Tipping in Spain] {{Webarchive|url=https://web.archive.org/web/20161221192120/http://gospain.about.com/od/spanishlife/qt/tippinginspain.htm |date=2016-12-21 }} * [https://www.nytimes.com/2008/10/12/magazine/12tipping-t.html "Why Tip?"]—''New York Times'' article about San Diego restaurant which stopped accepting tips * ''[https://www.gutenberg.org/ebooks/74229 Jack Henderson on Tipping]'' (1905) by Benj. F. Cobb through New York: Hurst and Company * [https://www.tipping.org/ The Original Tipping Page]

[[Category:Customer service]] [[Category:Food and drink terminology]] [[Category:Hotel terminology]] [[Category:Household income]] [[Category:Tertiary sector]] [[Category:Gratuity]]