The tip of the iceberg: Why Guam should rethink its tipping culture

By Samuel S. Kim

It begins with a small, almost imperceptible pause.

You've just ordered a coffee at a counter. The barista spins the tablet toward you, and there it is—a tipping screen. Twenty percent. Twenty-five percent. Thirty percent. Custom amount. The barista hasn't walked away. They're watching. The line behind you is growing. Your finger hovers, and for a few seconds that feel considerably longer, you are no longer a customer. You are a person being quietly judged.

You tap 20 percent, collect your cup and walk away vaguely unsettled—not because you couldn't afford it, but because something about the exchange felt fundamentally off. That feeling points to something that has quietly gone wrong in how we think about service, fair pay and the social contract between a business and its customers.

From gratitude to obligation

Tipping in the United States has a complicated history, and not an entirely flattering one. The practice gained momentum following the Civil War, when restaurant owners and railroad companies—particularly the Pullman Company—exploited newly freed Black workers by classifying them as "tipped workers" to justify paying them little or nothing in base wages. What began as a courtesy became a structural mechanism for wage suppression.

For much of the 20th century, tipping remained in its natural habitat: sit-down restaurants where a server invested genuine time and personalized effort throughout a meal. That logic, however imperfect, made sense.

What makes far less sense is what tipping has become. Point-of-sale systems like Square and Toast—designed with default tip prompts built in—have normalized gratuity requests at coffee counters, bakeries, food trucks and takeout windows, a phenomenon the industry calls "tip creep."

A 2023 Pew Research Center survey found that 72 percent of Americans believe tipping is now expected in more places than five years ago, and 29 percent said they feel obligated to tip regardless of service quality. The tip has stopped functioning as a reflection of service. It has become an unofficial tax, with social awkwardness as the enforcement mechanism—quietly built into the design of every screen that rotates toward you while a barista watches.

The hidden cost of uncomfortable moments

Customer experience researchers understand something businesses prefer to overlook: negative emotional moments are disproportionately memorable. Nobel laureate Daniel Kahneman's "peak-end rule" describes how people evaluate experiences not by averaging every moment, but by how they ended.

An obligatory tip prompt at the conclusion of an otherwise pleasant transaction is, by design, the last thing a customer experiences — and it colors everything that came before it.

A 2025 study in the International Journal of Hospitality Management confirmed that unexpected gratuity solicitations measurably reduced customers' overall satisfaction and likelihood to return. The product could be excellent. The interaction warm. But that final, pressured moment hollows out the goodwill a business worked to create — and in a community of 154,000 people where reputation travels fast, the cumulative effect is not trivial.

What no-tipping cultures can teach us

In Japan, offering a tip can genuinely offend a service worker. The implicit message—that they require a financial incentive to do their job with excellence—conflicts with omotenashi, the Japanese ethic of wholehearted hospitality. Standards are internalized through professional pride and training, not the promise of extra cash.

The results are hard to argue with. Tokyo holds more Michelin stars than any other city on earth — with no tipping involved. South Korea presents a similar picture: tipping is not a cultural norm, yet Korean hospitality is internationally recognized for its attentiveness and consistency. Denmark, Sweden and Finland, where service workers earn living wages and tips are neither expected nor common, routinely outperform tip-dependent economies on global customer satisfaction indices. What these countries share is not customer generosity. It is employers who pay workers properly from the start. Excellent service does not require tipping. It requires fair wages and a professional culture.

The illusion of merit

Proponents of tipping argue it rewards performance—exceptional servers earn more, mediocre ones earn less. The appeal is intuitive. The evidence is not.

Cornell University researcher Michael Lynn has found that tip size correlates far more strongly with a customer's personal characteristics and biases than with objective service quality. A server who is younger, female and conventionally attractive consistently earns higher tips than equally capable colleagues, regardless of what they actually did. Race compounds the disparity: Black servers are systematically tipped less than white servers in comparable roles, controlling for all other variables.

Tipping does not reward merit. It encodes and financially amplifies the biases customers bring through the door — and because servers who anticipate generous tippers allocate better service accordingly, those biases become self-fulfilling, disadvantaging the customers who may most need quality service.

Guam at the crossroads

Guam occupies a unique cultural position in this conversation. The island's indigenous CHamoru tradition of inafa'maolek—the ethic of making things good for one another—grounds hospitality in communal reciprocity, not transactional exchange. When a CHamoru host provides for a guest, the offering reflects something more fundamental than a financial reward.

At the same time, Guam's ties to the United States have allowed American tipping norms to take root in tourist-facing businesses. Guam welcomed approximately 1.63 million visitors in FY2019, the majority from Japan, South Korea, Taiwan and mainland China—nations where tipping is uncommon or culturally foreign. For those visitors, a tip prompt is not a familiar social cue. It is confusion and mild anxiety—precisely the experience that hospitality exists to prevent.

Guam's service workers face a cost of living that runs approximately 26 to 30 percent above the U.S. mainland average. Basing any portion of their income on the unpredictable generosity of strangers creates financial instability that undermines the professional focus quality service requires. It is hard to be attentive when you are calculating whether this month's rent depends on someone's mood.

The sign that changes everything

Here is what a better system looks like in practice—and it fits on a small placard near the entrance of any business willing to lead.

No tipping.

Our prices reflect the full cost of excellent service.

Our employees are paid fairly.

Every customer is treated the same.

Three sentences. A complete philosophy.

That sign tells customers that the moment they walk in, there will be no awkward pause at the register, no spinning tablet, no silent social pressure. The price is the price — honest, complete, and free of hidden obligations.

For the business owner, the path to that sign requires two commitments. First, raise wages to a level that does not require tips to be livable — a worker earning a fair wage brings stability and professional pride that an anxiety-ridden worker calculating tip totals cannot. Second, price your product to reflect its true cost.

Customers who grumble at a $6 coffee that includes fair wages are often the same ones who resented the $5 coffee that ended with a guilt-laden tip prompt. The all-in price is rarely meaningfully higher. It is simply more honest.

Research on the transition to service-inclusive pricing shows that customers in upscale establishments adjust well, with studies finding only negligible effects on patronage intent — and that the key to a smooth transition is clear, upfront communication framed around worker dignity.

A "no tipping" sign also becomes a competitive advantage — the business that removes the discomfort entirely stands apart. And critically, it levels the playing field for service quality. When no one is tipping, no one receives preferential treatment in anticipation of a tip. The quiet first-timer, the elderly resident on a fixed income, the tourist unfamiliar with local customs — all receive the same attentive service as the familiar regular. That is not just good business. It is a reflection of what a community can aspire to be.

A better way forward

The tip system has allowed employers to externalize labor costs onto customers and call it culture. The alternative is straightforward: price your product to reflect its true cost, pay workers wages that stand on their own, and post the sign.

This is the model that produces the world's most admired service cultures.

Guam — sitting at the intersection of the American tipping norm and the non-tipping traditions of the majority of its visitors — has a rare opportunity to choose deliberately rather than drift by default.

How we structure the conditions of work reflects what we actually believe about the dignity and worth of those around us. A system that makes someone's livelihood contingent on a stranger's mood, that financially encodes bias, and that ends every transaction with social pressure is not built around the well-being of workers or customers. It is built around convenience for employers.

Guam can do better. The first business owner who posts that sign — No tipping. Fair wages. Every customer treated the same — will not just be changing a payment policy. They will be starting a conversation this island is overdue to have.

Samuel S. Kim is a technology executive and engineering leader with more than 20 years of experience building and managing organizations across the United States, Southeast Asia, and South Korea. He founded and scaled a 60-person R&D division in Seoul, where he directly managed compensation structures, retention strategy, and workplace culture — earning recognition from the South Korean Department of Labor and the Korea Tourism Board for excellence in employee well-being. He holds a degree in Economics from UCLA and currently lives in Guam, where he writes on economic and social issues affecting the island's residents and business community.

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