Apps from Uber to Instacart ask customers to include a tip and rate their service. But how much does the order of those questions impact the size of the tip?
New University of Minnesota research, forthcoming in the Journal of Marketing, shows customers tend to tip smaller amounts if they're asked to rate service before providing a tip.
Carlson School of Management Associate Professor Alison Xu and Senior Lecturer Xuefeng Liu were part of a research team that completed seven lab and field studies to investigate how rating service influences tipping. The researchers found:
- Customers tipped less when asked to rate service before tipping.
- Across all studies, the size of the tips decreased about 17% on average when customers were asked to rate first.
- Tipping before rating did not impact the rating scores.
The researchers suggest when customers rate before tipping, they categorize their rating as a reward for the worker. As a result, this lessens the customers' tipping obligation and leads to a smaller tip.
"Companies have a lot of flexibility to maximize the design of their platforms when they solicit both tips and ratings," said Xu. "These findings show how apps can be designed to improve the experience for the service workers in addition to the customers."
The effect on tips also extended beyond apps. The researchers conducted a study at a Chinese restaurant in the Twin Cities during which the servers asked customers to rate their service to help determine the employee of the month. When asked to rate the service, the tips decreased by 13%.
Across the studies, the researchers determined the negative impact on tipping was more pronounced if the customers believed the worker directly benefited from the rating, if customers had to pay with their own money, or if the customer tended to be flexible when categorizing so they would reimagine rating and tipping as a similar reward.
Simply reminding customers of their ratings, however, eliminated the negative impact on the tip amounts. In one study, the researchers found when participants rated first but then received a reminder of their scores-especially if it was a good experience-the tips were equivalent to tipping first. The researchers argue the customers were also motivated to keep their tips consistent with their ratings.
"People have commitment and consistency motivations, which urge customers who give high ratings to tip more," said Xu. "If I were to rate the driver five stars but decide to give no tip at all-that can be inconsistent. But by reminding the customer about the high rating, the motivation to be consistent is now at the top of their mind."
Assistant Professor Jinjie Chen of the City University of Hong Kong College of Business and Assistant Professor Maria Rodas of the University of Illinois Urbana-Champaign Gies College of Business, both Ph.D. alumni of the Carlson School of Management, were also co-authors of the paper.
About the Carlson School of Management
Located on the University of Minnesota Twin Cities campus, the Carlson School of Management exemplifies a commitment to excellence through a focus on experiential learning and international education, and by maintaining strong ties with the Minneapolis/Saint Paul business community. Through its undergraduate and graduate programs, the Carlson School offers access to world-renowned faculty members and an alumni network of 55,000 people. Learn more at carlsonschool.umn.edu.
