Let Me Show You What Your Tips Can Do! Materially Referenced Tip Recommendations Prompt Tipping

Abstract Given the emergence of new technologies (e.g., online payment systems) and new service contexts (e.g., app-based services), the use of tip recommendations is becoming increasingly prevalent. Based on one large secondary dataset analysis (176,237 food delivery orders) and nine experiments, this research identifies an effective and easily implementable tip recommendation design—materially referenced tip recommendations (i.e., referencing a product that financially equates to the suggested tip amount) to increase tips. The effect of materially referenced tip recommendations is sequentially driven by the vivid mental imagery of how the requested tips could be used by the recipient (i.e., the consequences of tipping for the recipient) and the heightened perception that tipping serves as a meaningful expression of gratitude to the recipient. This effect is attenuated when the referenced product is perceived as inappropriate for expressing gratitude to the tip recipient.