Restaurant Tipping and Discrimination: Exploring the Implications of Automatic Gratuities

Abstract

Scholars have documented evidence of racial disparities in dining service quality and hypothesize that restaurant servers avoid or neglect minority patrons based on widespread perceptions that Black patrons tip less than their White counterparts. However, the precise causal mechanisms behind this discrimination remain unclear. If tipping expectations drive these racial disparities in service quality, automatic gratuities should mitigate discrimination. This survey experiment (N = 349) randomly assigns servers to scenario-based surveys featuring either Black or White patrons and either discretionary or automatic gratuities to consider whether differences in four indicators of service quality persist when automatic gratuities hold tipping behavior constant across races. Survey respondents expected tips from Black parties that were about 11.3% lower than expected tips from White parties of eight (p = .008). I find no significant differences in how respondents say they would treat their dining parties by race and gratuity type with one exception. Respondents to scenarios featuring voluntary tipping were more likely to say they would submit the order for their party of eight last when that party was White as opposed to Black. Meanwhile, there was no statistically significant difference for this service indicator by party race under automatic gratuities. The automatic gratuities reduced a disparity in service in an unexpected manner by inclining respondents to deprioritize the order for the Black party. Overall, future research that more robustly measures service quality is warranted to assess the role of automatic gratuities in mitigating discrimination in restaurant service.