Tipping Differences of Domestic and Foreign Customers in Casual Dining Restaurants: an Investigation of Customers' and Servers' Perception

Abstract

The main purposes of this study are to explore the servers' perceptions on the tipping practices of foreign and domestic casual dining customers in Oklahoma and identify the actual tipping practices of these customers. Hierarchical regression, two-way ANOVA, t-test and factor analysis are employed to assess the data. The results indicate that servers perceive foreign customers as low tippers, and foreign customers also report to tip less than domestic customers as well. Guilt, awareness of tipping norm, and awareness of servers' wage show positive significant impact on the tip amount. Awareness of tipping norm is the only factor which explains the tip amount differences between foreign and domestic customers. The findings suggest managers to inform customers, especially foreign customers, regarding the accepted tip percentage amount in the United States in various ways. At the same time, managers should design and implement activities to make foreign customers favorable to servers.