KU Business faculty experts discuss: Tipping culture and consumer behavior

With an estimated 79% of U.S. employees working in the service industry, customer-employee interactions shape everyday life — a topic that informs Jonathan Beck’s recent research. As mistreatment and verbal abuse have continued to rise following the COVID-19 pandemic, his work asks an important question: How do these interactions influence those who witness them? 

In a recent study, Beck, assistant professor of marketing, uncovers how witnessing customer incivility toward service employees shapes the emotional reactions of other customers. His research examines that observing these interactions can evoke feelings of pity, prompting customers to provide their support through increased tipping behavior.  

Beck earned his doctoral degree in business administration from Michigan State University, his master’s degree in marketing from the University of Rochester, an MBA in finance and a bachelor's degree in English from the University of Central Florida. His research centers on service marketing strategies, frontline employee effectiveness and well-being, online customer reviews and related topics. 

Why is this topic particularly relevant in today’s service industry? 
Traditionally, tipping compensated service employees for exceptional work. Anyone who has worked in the industry knows it is stressful but also rewarding when you provide a memorable experience. Over time, tipping has mutated and expanded far beyond that original purpose. It is no longer reserved for going above and beyond. Now nearly every quick transaction prompts a tip. We have all experienced placing an order only to have the dreaded iPad flipped around requesting extra payment. Customers now wonder: Is tipping expected for takeout that I picked up myself? How much is normal? Are others judging me if I select “No tip”? Tipping has expanded so broadly that many customers no longer understand the norms. 

At the same time, a cultural shift has led some consumers to view tipping as “corporate welfare” where customers subsidize employee pay while firms avoid providing living wages or benefits. Public attention to tipping culture has also intensified since around 2020, the beginning of the pandemic. Although this trend was built beforehand, the pervasiveness of tipping has become far more visible in everyday life. 

How has customer behavior in restaurants and the service industry evolved over the past decade?
The past decade has effectively divided into pre-pandemic and post-pandemic eras. Research shows that many pandemic safety precautions (e.g., masks, barriers, capacity limits) were poorly received despite their clear benefits to health and safety. Some customers doubled down on “the customer is always right,” insisting on pre-pandemic norms. Yet service workers are not equipped to handle uncivil adults; they work in the service industry, not human resources, so this resulted in a great deal of tension. 

Impatience and demanding behavior increased even as supply chain disruptions and labor shortages made consistent service more difficult through no fault of the employee being treated uncivilly. Customer entitlement rose quickly, basically overnight, and the service industry is still adjusting. It is a difficult time to be a service employee. 

Do you see witnessing consumer incivility creating a long-term positive change in service culture, or more of a short-term emotional reaction? 
I hope increased awareness generates long-term positive change, though short-term wins are certainly welcome. Importantly, most people are generally friendly and civil, so we begin from a pretty good baseline. These instances of incivility are infrequent, but when they do happen, they are quite impactful. The pity felt for the employee is likely fleeting and tied to a specific moment. Most people will not encounter an identical situation again as every service environment and experience is unique. However, that pity increases the desire to support the target and this supportive orientation can generalize to service workers more broadly. 

A single incident is unlikely to transform service culture, though it meaningfully affects those involved through emotions, behavior and ultimately the server’s tip or income. However, as incivility becomes more visible, cumulative emotional support for service workers may increase. Ideally, sustained support will translate into long-term cultural change. 

Why do you think the traditional bystander effect does not apply in situations where customers witness incivility toward service workers?
This finding was surprising and contrasted with prior research. The bystander effect suggests that helping decreases when others are present. The classic example is a medical emergency where no one intervenes because each person expects someone else to "do something.” In service settings, tipping is private and tied to one’s own bill. Unlike a collective emergency, tipping decisions are personal and autonomous. Customers retain agency and base their tip on their own experience, which reduces diffusion of responsibility. Hypothetically, if everyone's bills were pooled and a tip was requested collectively, the bystander effect might reemerge. 

How have customers shaped cultural norms and the way service workers are treated?
Norms are shaped collectively; yet no single customer wants to commit a faux pas. This hesitation has allowed firms to expand tipping practices, including higher suggested percentages and tipping in unorthodox contexts. As a result, customers are expected to tip more and more frequently, even though dissatisfaction with this trend is widespread across all parties. Yet despite increased tipping pressure, the workers themselves do not or will not see these benefits over a longer time horizon. For example, service workers who now receive tips when they didn’t before (e.g., a barista), resulting in a short-term boost in wages, will inevitably see their standard hourly wage decrease proportionally as firms do the math and realize how much of their employee wages they can offload onto customers. 

At the same time, some customers feel emboldened to behave uncivilly. A brutal feedback loop has emerged: higher tips create higher expectations of service quality, visible incivility from Party A normalizes uncivil behavior from Party B and firms ignore these issues while prioritizing short-term profits. Meanwhile, this dynamic increases employee turnover, and managers underestimate the long-term costs of recruitment and training relative to short-term profitability.   

What should restaurant managers take away from your research to support their employees and manage customer expectations? 
Many managers already run businesses where customers are satisfied, and employees earn fair wages. These leaders should serve as models and we need more of these good people in leadership roles. However, for future considerations, I see two practical paths that stand out. 

First, increase transparency around wages and tipping expectations. Communicating that employees earn a living wage (via signage or a note on the menu) signals ethical values and reduces perceived coercion. Greater wage and tipping transparency would further build trust between firms and customers, and customers would be more likely to return to those businesses since it’s a win for everybody involved. 

Second, implement a standardized service charge (e.g., 18%) applied consistently, eliminating 

discretionary tipping entirely, either at the individual business level or on a larger scale via legislation. Some cities have already pursued this, and as a visitor, it was a nice change to not have to worry about how much to tip. This could be as simple as there being an 18% charge added to the bill, and then when the check comes, there is not even a line for an additional tip, managing expectations and emotions. This does require consistently strong service quality. There are many benefits to this, and perhaps an overlooked one is the reduced stress for the service employees who must no longer struggle to manage emotions table-by-table after a good or bad tip. 

Ultimately, raising menu prices and eliminating tipping may be the most stable solution, such as raising the price of all menu items 18% and then not accepting tips. This doesn’t happen often, though because few firms want to be first movers due to visible price differences relative to competitors. That said, plenty of other countries do not have a tipping culture, and the service quality in those countries is no worse and oftentimes better than here in the U.S. 

Looking ahead, how do you see the future tipping industry evolving? 
There are really a lot of moving pieces here. The future of tipping depends on policy, norms, cost of living and industry differences. Broadly, the system appears strained and is approaching a breaking point. Consumers are fatigued by frequent and escalating tip requests, often without noticeable service improvements. This is one of those things where everybody complains about it, yet no one has a solution. 

In the short term, invasive tipping is likely to continue, unfortunately. Over time, some industries or firms will likely standardize pricing and eliminate tipping. These will become industry leaders in price as consumers are looking for ease of mind and transparency of price, things that are greatly lacking in the marketplace today. Then, as with anything else in business, once those tip-free models prove profitable, competitors will follow and implement similar policies. An equilibrium surely exists where employees are supported, customers feel fairness and clarity and firms achieve profitability. The key question is how quickly the industry moves toward it.