The danger of suggested tips and recommended donations

23Nov09

When people have the freedom to choose how much they pay for something, it’s quite common for the vendor to provide a suggested amount. For instance, I’ve seen this approach applied to tipping in restaurants and donations to a charity. The business or organization prints a suggested or recommended amount that customers should contribute, presumably to steer people towards higher dollar values.

I’m sure this makes some people give a larger amount. They interpret the suggested value as a social norm or expectation, and thus try to match or exceed it. But what about the people who already planned to give more than that, or who get offended or annoyed by the very premise of suggesting the size of their tip or donation? I would imagine that some of these people end up reducing the amount after seeing the suggestion.

Does recommending an amount tend to increase the total tips or contributions for a typical organization? Probably, or it wouldn’t be so common of an approach. However, I’m sure there are businesses and charities whose customers are turned off by this tactic. For these organizations, it makes sense to try removing suggested amounts on an experimental basis. That way, you’ll know for sure if your customers respond favorably to having the numbers put right in front of them, or if they tend to aim higher on their own.



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