Living with credit, Research, regulation, industry reports

Researchers offer this tip: Put an end to tipping

John Egan

The best tippers at U.S. restaurants leave 20 percent of their tabs as thanks for good food and good service, a 2017 survey by found. I like to think I’m consistently among the 20 percenters.

But what if we could stop scribbling tip amounts on our credit card receipts after dining at restaurants? Forever. We Americans could bid a fond farewell to billions of dollars in annual tips.

A few restaurants have adopted a no-tipping policy. My colleague Jenny Hoff offered a tip of her hat when she visited her first no-tip eatery.

Going tip-free can make financial sense

In an American Institute of Physics journal called Chaos – yes, Chaos – researchers argue that at certain tipping rates, a “rational” restaurant owner would be smart to “reel in” how much customers can tip and at some stage ban tipping altogether, according to a news release about the tipping study.

In the Chaos article, titled “The tipping point: A mathematical model for the profit-driven abandonment of restaurant tipping,” the researchers make this observation:

The custom of voluntarily tipping for services rendered has gone in and out of fashion in America since its introduction in the 19th century. Restaurant owners that ban tipping in their establishments often claim that social justice drives their decisions, but we show that rational profit-maximization may also justify the decisions.

A prohibition on tipping would be a big windfall for credit card users in particular because they tend to tip more than their cash-paying counterparts, according to The Atlantic.

And for all diners, a halt to tipping would rid us of the quandary about how much to reward (or punish) restaurant servers.

Should we leave 20 percent?

Maybe the service wasn’t superb, so we cut that back to 15 percent?

Or what about if the service was lousy? Should we tip nothing?

Finding the tipping point

To come to their get-rid-of-tipping conclusion, the researchers relied on a “social group competition model” involving restaurant staffers and customers. The model is a bit above my comprehension – I’m a writer, after all, not a math whiz – so I’ll spare you the in-depth details.

Let me try to put it as simply as possible: As the researchers explain, the mathematical model shows there’s a “critical” rate at which restaurant owners should eliminate tipping in order to pump up profit.

“Because the conventional tip rate has been increasing steadily for the last several decades, our model suggests that restaurant owners may abandon tipping en masse when that critical tip rate is reached,” the researchers write.

The tipping point for tipping, the researchers say, depends on factors such as menu prices and diner-to-server ratio.

“Ultimately, it’s diners that collectively decide the critical tip rate,” University of Illinois at Urbana-Champaign researcher Sara Clifton says in the news release. “Diners are making the most complicated decisions in the system.”

I’d like to ditch dipping, with some strings

Hey, I don’t mind making the “complicated decision” to tip waiters and waitresses for a job well done, especially since I toiled at a fast-food joint during most of my time in high school and realize how grueling restaurant work is.

Also, I usually feel funny if I don’t earmark at least part of my restaurant bill for a tip. Maybe I feel funny because, as the tipping researchers tell us, sociologists and psychologists attribute our desire to tip to feelings of anxiety, embarrassment or guilt, whereas others pin it on feelings of empathy and generosity.

Yet as generous as I can be, if we could somehow ditch tipping entirely, I wouldn’t be heartbroken. That’s as long as I was sure restaurant staffers were being fairly compensated for their labor, but without any of us customers having to fork over tips via credit card or cash.

See related: Bad manners! Restaurants encourage double tipping, Mastercard, Discover, AmEx and now Visa will ditch signaturesTipping your waiter or waitress? Ditch the credit card, pay with cash

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, we ask that you do not disclose confidential or personal information such as your bank account numbers, social security numbers, etc. Keep in mind that anything you post may be disclosed, published, transmitted or reused.

The editorial content on is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.

  • Seeker Trudy

    How will eliminating tips result in more profit for the restaurant? The menu prices would have to increase drastically to compensate for not only the servers salary, but for bar tenders, bus boys and hostesses as well. How will forcing the customer to pay higher prices for their meal, result in more buisness? Do you think that servers will work as hard if they are guaranteed a fixed salary at the end of the day? HELL NO. You will wait for that extra ranch dressing- if you get it all, because there will also be less staff on the floor when the owner feels the crunch of higher pay rolls…

  • Englebert Humperdink

    This article is really lazy. The writer admits he doesn’t understand the mathematical model so he’s unable to convincingly explain how the model shows that restaurants will gain a greater profit by eliminating tips.

    Menu prices would actually have to increase by more than what patrons typically paid for tips, as the restaurant owners would now have to pay their servers what they previously made from tips as well as having to match the money for social security and medicare taxes.