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How did tips (and the amounts) become a social custom or etiquette?
And, it is illegal to offer tips to some groups of workers, such as U.S. government workers, police officers, etc. as the tips might be considered bribery.
Studies of the practice in America suggests that tipping is often discriminatory or arbitrary: workers receive different levels of gratuity based on factors such as age, sex, race, hair color, and the size of the gratuity is found to be only very weakly related to the quality of service.
Exhibit A: HYATT REGENCY RESORT
During a recent stay at a HYATT, I was charged a GREAT rate for a room - cool! And then City Occupancy tax, HB Assessment, CA Assessment, a Resort Fee, and then (again) City Occupancy Tax and HB Assessment on the Resort Fee. Extra fees of $61.46 per day or $122.92 in total for two days.
When I questioned the extra charges, I was told it was all on their website. When I asked what the "Resort Fees" were, I was told - they were not just a hotel, but a resort. But the "resort" was on lock down at the time, due to COVID-19. But the resort fees are automatic, even though you cannot use the resort. Sorry.
Exhibit B: Angelina's in Florham Park, New Jersey.
We went out to dinner for the first time with friends, in like......forever. I had the Clams Oreganata and the Zuppa di Pesce. All of us had a great meal. It was a BYOB place, and we DID. We were really good on the BYOB assignment.
I would guess that Gabby was in her 20's. Gabby was a very good server, a little ray of sunshine.
Gabby got a $50 tip from our table, against a $120 bill.
A tip is not a tip if it is forced upon you. From a theoretical economic point of view, gratuities may solve the principle-agent problem (the situation in which an agent such a server, is working for a principle, such as a restaurant owner or manager) and many managers believe that tips provide incentive for greater work effort.
Why do we tip waiters, taxi cab drivers and bar tenders, but not webmasters, landscapers and others in the service industry? Also this: if you are going to have hidden fees, you better hide them really good. Because once a hidden fee is no longer hidden, those little hidden fees will become the only thing people will talk about. Heck, they might even BLOG on it.
Gabby for the win.
Oh, and HYATT, meet my new friend HILTON.