Who should retain the service tips? Tips retention practices and the British customers’ returning intention to the same Indian restaurants

Abstract

Purpose Service tip is an optional gift that is given by the customers to the waiters (or any other service staffs) for their services. Although the service tips are given to the waiters or service staffs, many restaurant owners or managements take away such gifts from the service staffs. This paper aims to identify the relationship between tips retention practice (TRP) and returning intention (RI) of the British customers to the same Indian restaurants for dining once they know that such tips are retained by the owners not by the service staffs. TRP was further divided into positive TRP (service staffs retaining the tips) and negative TRP (owners or management retaining the tips). The study further used a moderating variable (Female Customers’ Role) to test the moderating effect on the direct relationship. Design/methodology/approach The author purposively selected 1,223 British diners who take dining services at different Indian restaurants and used a structured survey instrument to collect primary data from those selected respondents. The author used SPSS 25 for descriptive statistics and a covariance-based structural equation modeling through AMOS 25. Findings Based on survey responses and proper statistical analysis, it was revealed that a positive TRP has a significant positive relationship with positive RI, whereas a negative TRP also has a significant positive relationship with negative RI. The results further disclosed that such a relationship can be strengthened by the Female Customers’ Role, that is, female diners are particularly reluctant in returning to those Indian restaurants where they experience a negative TRP. Originality/value This is one of the few empirical research attempts that have tried to reveal the dining customers’ intention toward TRPs. The author expects that the study results will contribute to upcoming investigations focusing on TRPs and policies. The author further anticipates that the study findings will guide the Indian restaurant managements in shaping their TRPs and policies.