Keep the change: The psychology of tipping

The Starbucks Steel Card has a face value of $400.

Let's say you walk into Starbucks.

While you're paying, you look down and see that jar:

So what do you do? Do you drop your loose change in it? A dollar? Or do you turn around and drink your soy latte.

Starbucks is trying to make that decision as easy as a text message. This week, the coffee giant changed their app, allowing you to tip directly from your phone.

Which got us wondering, why do we tip in the first place? How do you choose who to tip and who not to tip? 

According to Michael Lynn, professor at the Cornell Hotel School, economists believe tipping comes into play where you, the consumer, are going to be a better judge of how they did in their job. 

“We tend to tip service providers more, the less they make, and also more the more the customer makes. So the greater the income disparity between the server and the customer, the more likely you are to tip.”

We are also tend to tip better when there’s some sort of social contact. You're much more likely to tip your hairdresser with whom you've had a conversation with, than someone you only have a few seconds of contact with.

How do you tip? Take our survey here!

About the author

Lizzie O'Leary is the new host of Marketplace Weekend.

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