Is a tip a bribe?

By Jean-Pierre Méan 
Published on Tuesday October 2, 2018

Usage with respect to tipping varies widely from country to country. In certain countries it is not required but expected, in others, it is not expected and rarely practiced and in yet others it is taken for granted and may even be added to the bill of foreigners expected to forget it. The amounts of tips also vary widely and go from rounding up the bill to 10, 15 or even 20%.

Some see the origin of tips, at least in North America, in slavery. According to this theory, after the civil war, freed slaves were often hired in restaurants at no other salary than the tips they were able to get. However, tipping had already started in Europe in the 17^thcentury and its first reported instance was apparently to ensure rapid service in a coffee house. Hence the legend that the word “tip” is an acronym for “to insure promptness”. The flaw in this explanation is that what may be desirable may be to ensure, but certainly not to insure promptness.

Be it as it may, tips or gratuities are today supposed to reward good service. As they are paid after the service has been delivered, one may argue that they do not qualify as bribes because the purpose of a bribe is not to reward but to cause a certain result. But this ignores the fact that where tipping is regularly practiced the quality of the services are sure to be rewarded by a tip and that this expectation does create a causal link between the tip and the way the services are rendered. It also ignores the case of the regular customer whose tip does not only reward but also influences the quality of future services.

In these cases the qualification of tips depends on the profession of the recipient: tips to e.g. restaurant or hotel staff are not considered as bribes due to their social acceptance; they are also considered as part of salary by employers as well as by the fiscal authority of certain countries that routinely increase the taxable income of such personnel by the tips that they are expected to have made.

By contrast, tips to a policeman or any public official (a too well-established practice in some countries) are considered as bribes that may give rise to prosecution, unless they qualify as facilitation payments in countries where those are permitted.

The qualification of tips as bribes is not restricted to cases where the recipient is a public official: also tips to e.g. the staff of a private hospital in order to jump the queue in an emergency ward are considered unethical and qualify as bribes.

In fact, only where tips are considered as due and where their non or reduced payment is exceptional and would cause considerable outrage, are they deprived of any characteristic of a bribe. Would it not be better then, if they were systematically added to the bill and no longer depended on a semblance of discretion by the tipper?

For a more detailed analysis see: http://cceac.ca/2018/09/13/where-do-we-stand-20-years-after-the-oecd-convention-was-signed/

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