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Personal Finance
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Advanced Tipology
graphic October 8, 2001: 7:00 a.m. ET

The logic and history of tipping
Annelena Lobb
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    NEW YORK (CNN Money) - It seems like everybody expects a tip these days. Even the folks who make coffee at Starbucks have a tip jar -- and they never even step out from behind the counter. According to the Internal Revenue Service, Americans paid out $14 billion in tips last year, and that is almost certainly a severe undercount.

    But have you ever really stopped to think about this strange custom? Not just the "how much" part, but why we do all this in the first place. For example, the restaurant could just charge more for the food and pass it along in the staff's paychecks. Banks pay tellers that way - why not restaurants?

    The logic of tipping

    It may seem odd, but tipping some people and not others really does make sense. Some service employees, argues Michael Lynn, associate professor of market and consumer behavior at the Cornell University School of Hotel Management, offer a highly personalized service -- and tipping is an efficient way of rewarding them. 

    In a restaurant, for example, what constitutes good service is really a matter of the customer's opinion. "It's much rarer to tip a chef than it is to tip a restaurant server," says Lynn.  "The chef's job is not customized -- whether or not he did a good job is easily evaluated."

    Status also comes into play. "A chef has a rare skill that requires a great deal of effort and study," says Lynn. "People may feel less guilt because of that. I don't feel bad that a chef cooked me a meal, but I do feel bad that a waiter had to serve it to me." 

    Tipping exists around the world, but there are different customs in different countries.  Lynn researched these variations, counting the number of service professions that were tipped in various countries. He then compared these numbers with the results of personality tests given to people in those countries. 

    It turned out that countries with the most extroverted and neurotic citizens (the United States leads in both categories) tipped the largest amounts and to the greatest number of professions.  "Extroverts are outgoing, dominating, social people -- and tipping is an incentive for the server to pay you attention.  Neurotics are prone to guilt and generalized anxiety -- maybe they tip more because of guilt over status differences between themselves and the server," Lynn says. 

    The history of tipping

    In 1972, George Foster, Professor Emeritus of Anthropology at UC Berkeley, looked at the origins of words meaning "tip" or "gratuity" in several language. He found that, frequently, it evolved from 'drink money' -- supporting the idea that the practice began in eating establishments.  Foster theorized that tipping started with a desire to avoid envy on the part of the server and to send the message that the server should have a drink at the customer's expense. 

    The origin of the word English word "tip" is less clear.  One popular theory says it's is an acronym of "to insure promptness." Jesse Sheidlower, Principal Editor in North America for the Oxford English Dictionary, says that's wrong, because acronyms weren't popular in English until the 1920s.  "'Tip," says Sheidlower, "began as a verb in the seventeenth century, used in the language of thieves, meaning 'to give'."  By the early eighteenth century, the meaning included "to give a gratuity to a servant or employee".   graphic

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