Tipping is a common business practice which originated back in eighteenth century coffee shops in England where tipping was a way “to insure promptness.” Patrons dropped their money (tip) in a collection box. These days, people in numerous countries and in many situations leave tips after service is completed. Tipping takes a significant part in the hospitality industry, especially in hotels and restaurants.

According to recent studies, over US$26.4 billion was given to service personnel in the restaurant industry from customers as tips in 2003 in the US alone. In Korea, however, hotels have discouraged tipping by prohibiting employees from accepting tips by posting “no tipping” signs and by instituting a fixed service charge of 10 percent since 1979. But Koreans, like many Westerners, have tipped and still tip servers. The question to be raised is why people leave money when they are not legally obligated to do so and do not derive a material benefit out of it. There are number of possible answers.

Firstly, it could be a social norm related to reciprocity and letdown (guilt) aversion. Reciprocity means that the tip depends on what servers are doing. It is in direct proportion to the quality of service that servers provide and their kindness. Letdown aversion means people try to avoid letting others down. It may explain why people still leave money even when they plan never to visit the restaurant again.

Secondly, it could be related to the tipping situation and customers themselves, for example, table size, payment method, race/color/sex/age of customers. People tend to tip more while others are present at the same table and status considerations also kick in. Customers paying by credit card allow more tips to the total amount than cash paying customers. A Caucasian male in middle age is believed to tip more than any other category in many studies. According to research, as a result of this belief, servers expect to get more tips from white males, and often provide poor service to Asian or black customers, who are thought to tip poorly. If this happens to be true and has already become an industry norm by service personnel, what would happen to a young Asian or black female just entering a posh restaurant located in downtown Los Angeles? What kind of service would she get from a server, and what should be her reaction if she noticed service discrimination? To tip or not to tip is totally dependant on her. But if she decided to tip, how would she deal with servers’ preconceptions, and would the attitude of servers toward similar customers ever change afterward? Try to imagine the consequences if she decided not to tip.

Tipping needs to be a win-win situation where customers are treated warm-heartedly with superb manners by servers, and in return, customers leave a small token of appreciation on the table with which servers are benefited financially.