The Point of Tipping?

by on December 18, 2008 at 7:03 am in Economics | Permalink

Yesterday, my newspaper was delivered with a stamped envelope for sending tips to the delivery person. I put a tip in the envelope. Feeling extra generous, I did not include my address. Explain. Shouldn’t all tips be this way? Discuss.

Jason December 18, 2008 at 7:36 am

You still get a newspaper? Weird.

I suppose if a person doesn’t know who is giving them tips they will have to give everyone a little bit of extra service. So in tipping anonymously you benefit the person getting tipped and everyone they service. Assuming someone who delivers papers is going to think of this.

I wonder what extra service you could get in paper delivery. Maybe this isn’t the best example.

Also, if your neighbors know you are giving tips anonymously, won’t that encourage them to not give tips? Or if they don’t give tips anonymously, won’t they get all the extra service while you and everyone else get nothing?

Michael Stack December 18, 2008 at 7:47 am

Didn’t Professor Cowen have a post on this, on how best to deal with bums? I think he called it ‘rent exhaustion’.

Alex December 18, 2008 at 8:13 am

Was it Hemingway who said something about tipping behavior being the true measure of someone’s soul?

Roger December 18, 2008 at 8:32 am

The explanation that makes the most sense is that you are Canadian and trying to make Americans feel selfish as Canadians are wont to do.

T. Shaw December 18, 2008 at 8:50 am

Herein we mix economic principles with theological virtues; apples/oranges.

The economics: (I guess) compensate for service, plus I do it to ensure the server, assuming I am a repeat customer, stays there and is adequately compensated. I again guess: the more cash turning over in the economy the better for all.

Theological: charity, love for God and for one’s fellow. This has nothing to do with economics. Charity is not completely selfless.

Me: I still have delivered the WSJ which I pay for by credit card automatic billing. The “delivery person and me” relation is indirect. I received a Christmas card with my paper. I mailed a card with cash. I did not sign the card, but wrote the address. The issue for me was not whether the delivery person knew I gave him a tip, it was that no one else knew I gave a tip. No one here knows me.

I also attach (tape to an empty bottle) a card with cash for the Poland Spring Water delivery man.

Matthew December 18, 2008 at 9:00 am

Alex– Was the envelope addressed to the delivery person, or to the newspaper?

Is it possible that not including your address will mean that your delivery person will not receive the tip?

I do tend to agree with the idea that to be truly generous, one has to have the expectation that no benefit will accrue to oneself as a result of their giving.

bartman December 18, 2008 at 9:17 am

Shouldn’t all tips be this way?

Shouldn’t economists avoid asking questions with “should” in them? That’s what separates us from the rest of the social sciences.

Bob Murphy December 18, 2008 at 9:26 am

Oh man, I almost forgot to promote one of my articles. I wrote “In Praise of Tipping” back in grad school. (And you libertarian-haters will be pleased to know that a few libertarians wrote critical emails to me, explaining that tipping was an offense to the memory of Ayn Rand.)

Zac December 18, 2008 at 9:38 am

My guess is you did not leave your address because you wanted to leave a gift with no pretense of reciprocity (last night’s episode of Big Bang Theory dealt with this issue, “You haven’t given me a gift; you’ve given me an obligation!”). If anything, you did a big favor to your neighbors as the deliveryman may decide to increase everyone’s level of service.

As far as should all tips be this way, I think not, as a tip is generally a reward for good service as well as a signal to the tip-ee that you are a customer who recognizes, and rewards, good service. This encourages good service (read: preferential treatment vis a vis your neighbors) in the future

bjartur December 18, 2008 at 9:55 am

No. There is no logical explanation. You will not get better service because of the tip. There are much needier people on the planet if you meant to be charitable.

D. Watson December 18, 2008 at 10:26 am

I confess that it is less clear to me what “better service” one could expect from a competent deliverer (than, say, the extra service I can get from a waiter/ress).

If the deliverer is already competent, the tip says thank you, but a card or just a penciled note could do much the same thing (ie – the marginal value of tip over a note may not be very high). If the deliverer regularly leaves the paper in the gutter or the rose bushes, I don’t know that a tip is in order.

On the other hand, if the tip is really there to ensure that future papers don’t end up in the gutter or the bushes, it’s more of a protection racket than a tip, which is what I tend to fear more tipping has become. Tip or you’re a bad person, rather than rewarding service above and beyond the call.

Course, all this ignores the warm glow effects that keep our smiles rosy at Christmas time.

Seth December 18, 2008 at 11:44 am

First, you value the delivered paper higher than price your pay for it. Second, you weren’t sure if the amount would be considered appropriate or an insult and they know where you live. You satisfied your self interest of guilt relief and gaining material for your blog with minimal downside consequences. As altruistic as others see you, self interest drives much more giving than we want to admit. You also lessened the feedback information value of the tip, which is good if you don’t know how well the tipped takes feedback and they know where you live.

But, perhaps the throwers marked the envelopes. In which case, you just got interesting material for your blog.

Anonymous December 18, 2008 at 12:35 pm

The person who delivers the WSJ to my house also does this. And since he started doing it I have been sending an anonymous tip, in cash inside the card, directly to him. I do not do it to improve service, which is already excellent.

I tip because I was a paper boy for 5 years (age 11 to 16), and I get satisfaction out of doing it.

And if someone doesn’t like what I do with my money, tough. Tell it to Fidel.

mlw December 18, 2008 at 12:42 pm

Because the house number isn’t painted on the curb, Alex has been receiving someone else’s paper. He didn’t include his address so the delivery person will notice he doesn’t have a subscription.

Anonymous December 18, 2008 at 12:59 pm

mlw made me guffaw.

Also, just noticed Alex’s clever Gladwellian title.

Anonymous December 18, 2008 at 1:41 pm

I love this:
It is part of their expected income for the job, and they demand lower wages from the newspaper because they factor in the tips.

Demand, check.

Most of the home delivery guys I know are glad to have something where they can make a few bucks in the morning before they go to a regular job. The “demand” is created by the newspapers offering an early-morning extra-money very-part-time gig. It must be worth it to those folks who do it.

Are there paper boys in the US any more?

Jim H December 18, 2008 at 4:25 pm

Didn’t Gladwell cover this in his book, The Point of Tipping?

Allen December 18, 2008 at 5:03 pm

You’re just trying to reclaim your humanity after that number painting on the curb incident.

Anonymous December 18, 2008 at 7:38 pm

I think it is passive aggressive approach that is likely to increase the anxiety level of the delivery person (if the delivery person in fact receives the tip at all). The value of the tip to the delivery person will be decreased by the emotional cost of the anxiety caused by not knowing who gave it.

Of course, such an approach may increase the value of the tip to yourself, by decreasing the undesirable collateral effects of a credited tip, such being subjected to friendly waves and smiles from the delivery person. I gave the parking lot attendant at my office an overly generous tip last year, and I was faced with a year’s worth of small talk (mostly about the time I arrived at the office each day). That won’t be a problem this year, because the building manager inexplicably changed the assignments of every parking lot attendant two weeks before Christmas. Now I’ve got to decide whether and how much to tip the new guy, or to figure out how to track down the old one.

Collin December 19, 2008 at 2:05 pm

Isn’t this just working on a principle similar to random reinforcement? It’s been a while since I read about this, so I my memory may be poor, but my understanding was that we would expect him to get better service through infrequent anonymous tipping than through consistent tipping that can be attributed to him.

John Faben December 20, 2008 at 9:52 am

Surely, as I think someone mentioned above, there are people out there who need money more than newspaper delivery boys. So if you’re going to give someone an anonymous gift of cash, why make it a paper delivery boy?

Tipping anonymously seems to remove any possible rationale there might be for tipping as opposed to giving the same amount of cash to a deserving charity.

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