Service Failure, Tipping Behavior, and the Effect of Service Industry Experience

Abstract

The relationship between tipping and the service provided is not always linear. Factors such as demographic profile of the consumer, industry norms, and social norms affect the amount of tip. Results from the current study reveal that tipping varies when service failure occurs due to servers’ fault or organizational failure. Consumers with prior professional experience in the restaurant industry can distinguish between causes of failure, and tip accordingly. Consumers with prior professional restaurant experience were found to tip significantly more than those consumers that do not have prior hospitality experience. Tip rates for service failure due to organization failure tend to be higher compared with the service failure due to servers’ mistakes indicating that consumers do not penalize a server when the organization has caused the service failure.