Restaurant Perspectives on the Effects of Point-of-Sale Tip Recommendations on Consumer Patronage

Abstract

This research examines the effectiveness of point-of-sale gratuity recommendations in raising tips within the restaurant industry. Prior field experiments have yielded positive results regarding the impact of point-of-sale gratuity recommendations. However, these studies did not consider the restaurant industry, which is reliant on tips. To address this gap, I conducted a survey of restaurant managers to gauge their perceptions of this technology and compared their responses with prior field study results. Employing a survey approach mitigated resource constraints associated with field experiments. Building on the aforementioned studies, I hypothesized restaurant managers would exhibit positive attitudes toward the utilization of this technology. Survey data underwent chi-square tests of homogeneity to identify variations in responses across restaurant categories. However, limited response rates rendered the chi-square test results inconclusive and thus, not included in the final analysis. Nevertheless, the survey results strongly supported my hypotheses, suggesting that the adoption of point-of-sale gratuity recommendations effectively increases tips received in the restaurant industry. These findings offer insights for future researchers investigating tipping behavior in restaurants. Furthermore, restaurant owners can leverage these results to advocate for implementing point-of-sale tip recommendations, considering the backing from their managerial peers. As the hospitality sector continues to evolve, incorporating this technology can facilitate positive changes in tipping culture, benefiting both businesses and service staff. Future studies should build upon these findings to gain deeper insights into the dynamics of this technology in restaurant settings.