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Tipping in Canada: Is It Linked to Better Service?

Tipping in Canada: Is It Linked to Better Service?
Tipping in Canada: Is It Linked to Better Service?

In many situations, customers are expected to tip, but some question whether this motivates employees to provide exceptional service.

Bev Burgess, a retired teacher from Medicine Hat, Alta., is one of the Canadians who is no longer sure whether there is a connection and who is raising questions about Canada’s tipping culture.

She says she’s encouraged to tip when she buys ice cream from a food truck and when her grandchildren get haircuts. She says she’s also expected to tip when she gets her nails done and her oil changed, and it all adds up.

“I think the whole tipping business has gotten completely out of control,” Burgess said in a phone interview with CTVNews.ca.

Adding to her frustration are situations where she has no choice. In one case, she said, she was automatically charged a 14 percent tip, even though she didn’t receive her meal until nearly everyone in her party had finished eating.

Burgess says she still generally tips her employees when she has the choice, but she does so because she sees it as an obligation, not necessarily because the service she received met or exceeded her expectations.

“I don’t think we as customers should feel like we have to supplement their income. I think that’s wrong,” Burgess said. She said workers deserve the extra money, but she believes employers should pay them a living wage. “I’m already paying them for a service that they’re charging me (for). Why should I give them extra money? … They should do a good job, whether they get tips or not.”

Study: Tipping Regardless of Quality

While tipping is intended to empower customers and motivate employees to provide quality service, some question whether this common practice actually improves the customer experience.

Research doesn’t show a strong correlation between service quality and tip size, says Mike von Massow, a food economist and professor at the University of Guelph.

“That means most of us tip regardless of whether we liked the service or not,” von Massow said in a video interview with CTVNews.ca. “If we have bad service, we still feel we should tip.”

Stereotypes about tilting

However, research shows that there is a strong correlation between expected tip and quality of service, even before a customer is actually served.

“So a waiter will evaluate a table and decide how much of a tip he expects from that group and then tailor the service to that expectation,” von Massow explained. “It’s really relatively arbitrary. … The expectation of the tip can affect the quality of the service based on a preconceived idea or a stereotype about how well that person will tip.”

White, middle-aged men in suits tend to get better service because they are perceived as more likely to tip, regardless of whether that is true, he said.

People who are perceived as low tippers, usually women, young people and people of color, receive poorer service.

This discriminatory practice is common in Canada and other places around the world where tipping is common, he said.

‘More positive experience’

Research shows that in some cases, tipping still leads to better customer service, despite stereotypes about tipping.

“We do say that when you go into a restaurant, you should show appreciation, you should encourage people to be better,” said Ian Tostenson, president and CEO of the British Columbia Restaurant and Food Services Association in Vancouver. “And so tipping, in my opinion, leads to a more positive experience.”

One example he cited was the decision by prominent American restaurateur Danny Meyer to stop tipping in 2015, instead including it in the total price of a meal. But Meyer’s experiment didn’t last long, and neither did those of other New York restaurateurs, who soon discovered that many customers and servers preferred tips, The New York Times reported.

“We’re used to it (in North America),” Tostenson said. “We believe we’re getting better service.”

Employees who provide added value, such as friendly and fast service, and build an “emotional connection” with customers typically expect tips, he added.

“(Tipping) creates a better experience for the guest because they feel much more in control. And certainly for the waiter, who thinks, ‘Yeah, if I turn it up a little bit here, I’m going to get rewarded better than if it was just a flat rate.'”

The bottom line is that both parties have a better experience when they believe their behavior impacts each other.

But Tostenson doesn’t think tipping improves customer service in cases where tipping is expected without any additional service being provided.

“We see situations like private liquor stores, for example, where you bring your wine to the counter and the person just charges you for it. And then all of a sudden you get (a tip prompt) and they ask, ‘Do you want to tip?'”

According to Tostenson, customers should not tip in such cases, nor if they receive poor service, even if the employee suffers financial loss as a result.

“Don’t just tip if you had a bad experience at a restaurant in Canada. … You should also make it clear why you decided not to tip to the manager, or at least not to the waiter.”

‘Trained not to tip’

Research shows that many customers find tipping improves their shopping experience, says Sylvain Charlebois, professor and director of the Agri-Food Analytics Lab at Dalhousie University in Halifax.

“They actually have control over their experience and the quality of service that they actually get,” said Charlebois, who studies tipping fatigue.

A study from his university found that only 27 percent of Canadians surveyed would appreciate it if tips were already included in menu prices, similar to Meyers’ experiment.

“The vast majority of Canadians still value the old-fashioned way of allowing guests to tip whoever they want and however much money they want,” he said.

However, tipping is done “too often” and is no longer about allowing consumers to reward or punish performance, he said.

“Sometimes people are asked to tip even before the service is actually provided. I actually think that tipping is becoming less about performance (and) quality and more about wage subsidy. And that would completely undermine the value of tipping.”

At the same time, people are slowly feeling less guilty about not tipping, he said.

“Nowadays you’re asked to tip so often that people are trained not to tip,” Charlebois said.

“Even in the coffee shop where they don’t serve you, but where you just pay, you are turned on by it,” he gave as an example of why some people become less sensitive to the “no” option.