Emerald Login
   

Welcome guest

Article Request:
Tipping and its alternatives: business considerations and directions for research

Article Information:

Title:

 Tipping and its alternatives: business considerations and directions for research

Author(s):

Michael Lynn, Glenn Withiam

Journal:

Journal of Services Marketing

Year:

2008 

Volume:

22 

Issue:

4 

Page:

328 - 336


DOI:

10.1108/08876040810881722

Publisher:

Emerald Group Publishing Limited


Acknowledgements:

Received: March 2006Revised: June 2006Accepted: July 2006

Document Access:

Please select from the following options:
View HTML | View PDF (109 KB)

Reprints & permissions:

Image: Rightslink Request

Abstract:

Purpose – The purpose of this paper is to outline the business issues surrounding tipping and its alternatives, to summarize what is known about those issues, and to identify questions in need of further research.

Design/methodology/approach – Objectives are achieved via conceptual analysis and review of relevant literature.

Findings – The paper finds that voluntary tipping, service charges, and service-inclusive pricing offer different sets of costs and benefits, so that no one policy is always the best. The principal benefits to service firms of voluntary tipping are that it lowers nominal prices, increases profits through price discrimination, motivates up-selling and service, attracts talented workers, and lowers FICA tax payments. However, tipping also motivates discrimination in service delivery, gives servers surplus income that could go the firms' bottom line, increases the risk of income tax audits, and opens firms up to adverse impact lawsuits.

Practical implications – No one tipping policy is always the best. Service industry executives and managers should carefully weigh each of eight different issues (outlined together for the first time here) to identify the best tipping policy for their circumstances.

Originality/value – Tipping has received little attention in service marketing. Furthermore, there is no good, published source of guidance to help service industry executives and managers make decisions about tipping policies. This paper addresses these voids by providing and discussing a comprehensive list of the pros and cons of tipping and its alternatives from a business perspective.

Keywords:

Employee attitudes, Incentives (psychology), Money, Recruitment

Article Type:

Conceptual paper

References:

53 references

Article URL:

www.emeraldinsight.com/10.1108/08876040810881722

Key Readings

Top