About six years ago, I found myself awfully famished and called for a pizza. What felt like a century later, a pizzaman called me back to let me know that he was standing at the door. What exciting news! I grabbed some cash, rushed down to the door, gave the guy some cash and expected some change. I never got that change and I was puzzled by the fact that he just took the cash and left nonchalantly. I almost protested, thinking it was theft but with just a couple of dimes, nickels and pennies and an empty stomach, I decided to enjoy my pizza instead. Later, I learned that it is a culture called tipping. More importantly, that culture might be the key to an excellent tourism-related service industry.
Tipping is not big in Malaysia. I myself am not a big fan of tipping. After all, why should I pay more on top of an overpriced meal, especially with the bad service that comes along with it?
I was very thrifty while I was in the US. I am still is now but once in New York, my friends and I were scolded for giving what I would guess was an insulting amount of tip. What a lecture we had! It was enough to heat us up in the frigid New York winter! But please do not blame me for that for I am but a product of Malaysian culture.
But back to the question, why should we tip?
The answer is simple and relates to one truth in economics: people respond to incentive. This is an universal truth. Well, almost but let us pretend that there is no irrational people in this world.
When I say tourism-related service industry, I really mean the sector such as hoteling and restaurant. If I might add, Malaysia has a relatively terrible service industry. A friend of mine from India once lamented on how terrible the service he received at what could be considered as a posh place in the middle of Kuala Lumpur. I was shocked to hear him complaining about that place.
The fortunately could be changed if the culture of tipping is introduced in a big way in Malaysia. With it, visitors would have the power to reward those whom exhibited good effort and, in some way, punish the sloppy ones. Alas, introducing a new culture is an Herculean task. A more sensible proposal is to start it with a more humble manner: develop a personal habit of tipping.
In order to get good service, one has to develop a reputation for tipping. In an environment where tipping is alien, one does not have tip too much to be well served. One has to repeatedly tip the same service provider over some time to gain that reputation. Just like in a repeated game model, players learn. The same fact is true in the real world.
So, if you hate the service you get in Malaysia, start tipping. Trust me. Once one has a tipping reputation, many in the tourism-related service industry would try to please you. If everybody tips, we would have a great tourism industry in no time.
If that is not enough a reason for you to start tipping, there is another reason why you should tip: tip big enough, you may get lucky.
6 replies on “[1255] Of a tip to improve the tourism industry”
Hey Dave,
I do not agree to that kind of tip which the server demands for it. Tipping should be voluntary. For the server to demand for a tip defeats the purpose of tipping as incentive in the first place.
totally against tipping. if you are in working in the service industry, and yet you are not doing a good job servicing, then you are not doing your job. you are getting paid to serve so that customers can be satisfied, why should customers provide extra incentive for you to do your job properly? it is not incentive, but bribery.
seriously jebai… that episode in NY… do you think those thai assholes deserve the 20% tip they demanded? they mixed up our order, the food was crappy and made us wait forever. it is not incentive but more like a screwed up way of restaurant owners paying peanuts to their employee coz those waiters/resses can get the extra from the tips.
Dear Hsin,
Indeed the system could be abused.
Dear John,
Perhaps I have not thought it through but inefficient in what sense?
If you are referring to one-off encounter (paid after service, without prior contract), then tipping does not make sense. But in a repeated encounters, tipping makes perfect sense.
15% is minimum.. a moderate tip would be 20% of the bill.
A rule of thumb.. anything under $100 .. $2 for every $10 bucks.
Isn’t tipping economically inefficient?
It’s true that in general tipping goes hand in hand with good service, but it also depends heavily on the management of those tips. There are plenty of cases here (in US) where the restaurant manager will pool all the tips from their waiters into a lump sum, and then keep a chunk for himself and distribute it amongst the waitiers.
I’m not sure but I think it’s illegal to do something like that, but it still happens. And when it does, there’re bound to be some rotten eggs who have the mentality that someone else can do the hard work and they’ll just skimp off their efforts.