If you have ever worked in the service industry, were employed in a position where a significant portion of your income was tied to TIPS, or if you currently find yourself employed as an insurance geek you can appreciate this brief history lesson. What follows is as far as I can find a very accurate description of how TIPS came into existence. While it does offer a modified version of the wikipedia account of the beginnings of gratuities, I believe after some careful digestion of the facts you will also come to a similar conclusion – that the insurance industry mainstreamed TIPS. Lets go back in time. While researching the History of Insurance and Risk Transfer for my book, I stumbled across several differing versions of Lloyds Coffee House and how it impacted modern day insurance.
Before I disclose to you the information on TIPS, I need to present you with a few small nuggets of insurance lore below.
Insurance has been around since the Chinese merchants devised a system for protecting themselves from losses they might incur when transporting cargo by ship. Skip forward a few hundred years to the city of London and the year 1688. Mr. Edward Lloyd ran a coffeehouse that was a popular gathering place for sailors, merchants, ship owners and others interested in the shipping industry. A merchant planning a sea venture would circulate particulars of the venture and people interested in helping finance the venture would indicate at the bottom of the paper the amount they would contribute or underwrite, and sign their name, which is where the word “underwriter” comes from. Whilst these circulated papers were passed about, patrons needed to “of course” enjoy tea and coffee. Strategically placed about LLOYDS Coffeehouse were etched signs and canisters simply stating “TIPS.” These signs were typically etched on brass and invited customers to leave a coin for their waiter, which read “To Insure Prompt Service”, i.e. “TIPS.”
These signs were typically etched on brass and invited customers to leave a coin for their waiter, which read “To Insure Prompt Service”, i.e. “TIPS.”
Above, we have yet another example of how the insurance industry has reached across and touched other businesses with it’s initial acceptance of leaving TIPS for coffeehouse staff, To Insure Prompt Service. I mean ” even the word INSURE ” is the second word of the sentence. How could our industry not have assisted in giving birth to this glorious income enhancing mechanism ?I have always referred to the Insurance Business as giver of life, dream fulfiller and industry of all things sexy, exciting and just plain awesome and now we have yet another example of why and how this sexy industry does so much for so many people.
Next time you are ordering a cup of coffee or eating out, please remember to toss your coin or a few percentage points on your credit card, you know ” to insure prompt service “.
Then speak confidently about tipping and impress your friends with your newfound knowledge – brought to you by none other than the worlds greatest industry.
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