Anecdotal evidence suggests that many waiters and waitresses deliver poor service to ethnic minorities because they believe that ethnic minorities are poor tippers. How managers should deal with this problem depends in part on whether or not ethnic minorities really do tip less than Whites and (if they do) on when and why this occurs. This paper reports on two studies that address these issues. The results indicate that Asians tip less than do Whites in comparisons across (but not within) restaurants and that Blacks tip less than do Whites in comparisons both across and within restaurants. Various explanations for these ethnic differences are tested, and the managerial implications of the results are discussed.