Tipping heuristics

April 28, 2010
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(This article was first published on Decision Science News » R, and kindly contributed to R-bloggers)

INCREDIBLY SIMPLE CALCULATIONS MADE SIMPLE

Yes, we all know how to calculate 15% or 20% exactly, but it’s fun to use tipping heuristics and even more fun to make crowded graphs of how they compare to each other. (Sorry for the junky chart. Open for suggestions, in the words of Tom Waits.)

Here are a few tipping heuristics compared to a 15% baseline (which some claim to be 15-20% in NYC):

- Round to the nearest $10, then double the number on the left

- Round to the nearest $5 and throw in $1 for every $5

- Double the tax

There is also the notorious “double the number on the left”, which a friend’s father described as “sometimes they win, sometimes they lose.” DSN doesn’t like this one as it inflicts its damage on small checks, which often require as much waitstaff effort as large ones. If you’re a high roller, it looks pretty safe, however.

Whatever you do, please advocate smart heuristics instead of those undeservedly popular iPhone tipping apps.

What tipping rule of thumb do you use?

Note: Tax figure is New York City restaurant tax, which is something like 8.875%. I regret doing this in Excel instead of R, but it seemed like it would be faster and prettier.

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