The conventional wisdom is that tips both reward the efforts of good service and reduce the uncomfortable feelings of inequality between the customer and the service provider. とはどういう意味ですか?

質問を翻訳

both = applies to two things.

If you break the sentence up, it's easier.

The two things are "tips reward the efforts of good service" and "tips reduce the uncomfortable feelings of inequality between the customer and service provider".

Both are about tips, so these two things both apply to the word "tips". Instead of saying tips twice, it's easier to just say "both" since they refer back to the same thing.

I hope this helps!