杏吧直播间

MURRAY, Ky. 鈥� 杏吧直播间 State University Associate Professors of Marketing Drs. Ismail Karabas and Christopher A. Craig had a teaching case study published in Sage Business Cases on Jan. 14.

The case study, which featured The Burrito Shack, a restaurant staple near 杏吧直播间 State鈥檚 campus, looked at the upsurge of tip requests at point-of-sale (POS) systems in quick-serve restaurants (QSR) and how that affected both patronage and employee turnover.

Matt Gingles, owner of The Burrito Shack, implemented POS tip requests to increase employee take-home pay in an effort to reduce staff turnover. The tip requests were successful in reducing raising employees鈥� take-home pay鈥攖he added income from tips equated to between $3 and $7 per hour鈥攁nd reducing turnover. However, customers were not always in favor of tipping outside of full-service restaurants (FSR). 

Due to its quick-service nature, the level of service at QSRs like The Burrito Shack was not comparable to traditional FSRs. Both in-store and take-out customers struggled with being requested to tip because the service provided was trivial. At QSRs, customers were confused about whether to tip and how much to tip when receiving a tip prompt.

Researchers found that when customers faced a tip request at a QSR, they felt irritated and reported they were less likely to return. As a practical solution, studies suggested that providing an explanation for tipping requests and guidelines reduced the negative customer response. Another interesting finding is that matching tip percentages with certain emojis on the POS tip request screen led to higher tips.

Karabas said his interest in this topic stems from both his own personal experience as a customer who encounters these requests and his professional background in services marketing.

鈥淭he most enlightening part of this case was examining the topic from multiple perspectives,鈥� Karabas said. 鈥淲e explored the effect of tip requests not only from the customers' perspective but also from the managers' and employees' viewpoints, which highlighted how complex the decision is for businesses to implement tip requests. I also greatly appreciate the insights provided by Matt, the owner of The Burrito Shack. It was particularly interesting to learn how tip requests became more common across establishments, and how this trend was, in part, influenced by companies providing POS payment services.鈥�

Karabas said that he hopes 杏吧直播间 State students will gain a deeper understanding of tipping culture and develop a more critical perspective on the issue.

鈥淲hile all students will learn valuable details about tipping culture that they may not have been aware of, those studying services marketing will particularly benefit from applying course material to a topic that is both relatable and connected to a business they frequent on campus,鈥� said Karabas. 鈥淚 also appreciate The Burrito Shack for their collaboration, and I hope this project inspires more community-university partnerships in the future.鈥�

Gingles said he hopes the case study will bring awareness to the benefits of tipping at a QSR and enhance understanding of tipping policies.

鈥淚 understand that there is a difference between full-service and quick-service, and I would guess that almost everybody believes that it falls on the owner of the business to pay their employees competitive wages,鈥� said Gingles. 鈥淚 believe it does as well, but the difference between the margins of a chain and a single, independent restaurant are much different. Since they have more money to work with, they can pay their employees a higher rate, without tips included, due to lower food costs, higher product price points and brand awareness. I would venture to guess that the majority of people don鈥檛 think about the differences between a locally owned restaurant and a large chain, including how tipping affects employees. So the tipping at my place really helps me stay competitive and keep employees longer. This, in turn, gives customers a better experience overall because we don鈥檛 have much employee turnover.鈥�

Read the full case study here: