Tipping is a multi-billion dollar phenomenon and a major source of income for millions of workers. The results of a study conducted in the US and Israel suggest that people tip mainly to show gratitude, conform to the social norm, and because they know that waiters' income depends on tips. Tipping is motivated more by the positive consequences of tipping than by the negative results of not tipping. Patronage frequency and dining alone have no systematic effects on the level of tips or their sensitivity to service quality. Respondents report tipping much more for excellent service than for poor service, suggesting that tipping can provide significant incentives for high-quality service. A large majority prefers tipping to service charges.