When percentages meet amounts: Evidence from a natural experiment on digital tipping prompts

Digital point-of-sale (POS) systems regularly prompt hospitality customers to tip, yet little is known about how tip formats influence tipping behavior. This study examines whether displaying both percentage suggestions and their corresponding monetary amounts ( percent-and-amount format) leads to higher tips than displaying percentages alone ( percent-only format). Using transaction-level data, we employ a natural experiment in which the POS interface changed from a percent-only to a percent-and-amount tip format , then reverted to percent-only . Analysis of 5169 transactions shows that customers left higher average tips and were more likely to tip when presented with the percent-and-amount format. Notably, tipping levels remained higher in the subsequent percent-only period than in the initial percent-only period, indicating that the positive effect of percent-and-amount format extended beyond that period. These findings extend research on digital tipping, voluntary payments, and choice architecture by revealing that displaying calculated tip amounts can increase tip amounts and tipping likelihood. • A natural experiment examines the impact of tip prompt format on tipping behavior. • Compares displaying suggested tip percentage with and without currency amounts. • Including currency amounts increases average tips and tipping likelihood. • Simple interface design changes can increase tipping likelihood and amounts.