Credit & Money Management
What You Need to Know About Tipping
Be generous with people who provide you with good service all year long. But don’t fall for the tip jar.
By Laura Cohn, Associate Editor
From Kiplinger's Personal Finance magazine, December 2009
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1. ‘Tis the Season. Just about anyone who serves you during the year should get a token of appreciation. The norm for your nanny and house cleaner is a week’s pay. Your mail carrier is not allowed to accept cash, but you can give him or her a gift valued at $20 or less. Your newspaper carrier, trash collector and UPS driver should get 20 to 25 bucks. Appropriate gifts for hair stylists (whether they own the shop or not) include the cash equivalent of one appointment or a nice bottle of bubbly. If you have kids in school, don’t give the teacher cash-it could be construed as a bribe. Suggest to the room parent that all the parents chip in for a gift certificate.
2. Stay Tip-Top All Year. The standard restaurant tip is still 15% to 20% of your pretax bill (if you’re dissatisfied with your server, leave 15% anyway and tell the manager why you weren’t happy). But other service providers should get a little extra, too. For taxi drivers, figure 10% to 15%, depending on whether they help you with your bags. Valet-parking attendants should get a buck or two once they return your car-unscathed. Hair stylists and massage therapists should pick up an extra 15% to 20% per visit-with the exception of the owner, whose pride would be offended, says etiquette maven Judith Martin (also known as Miss Manners).
3. Don’t Let a Tip Jar Send You on a Guilt Trip. You see a tip jar at your local coffeehouse or sandwich joint and you suddenly feel like Hamlet: To tip or not to tip? Unless you get great service, there is no need to tip the barista at Starbucks. If there’s a jar at the carwash and the crew gives your ride a little extra TLC, consider leaving something. But don’t feel obligated. “It’s up to you whether you want to throw some change in the jar,” says Lizzie Post, great-great-granddaughter of Emily Post (www.emilypost.com). “If you’re a regular customer, tip on occasion.”
4. It Gets Tricky When Your Travel. Skycaps at U.S. airports get $1 per bag. Cabin stewards on a cruise ship leaving from a U.S. port usually get $3 a day (but look online to see whether service is included). Once you arrive overseas, check your guidebook to see what the local custom is. In Western Europe, you generally don’t need to tip more than 10% at a restaurant. But check your bill: The tip (or service charge) may be included. Making matters even more confusing, in some situations you don’t tip at all. At a pub in the U.K., instead of tipping the bartender, you might offer to buy him a drink. In Denmark, you’re not expected to tip servers or taxi drivers, says fashion designer Kate Spade in her book Manners (Simon & Schuster). And if you ever make it to Iceland, Spade writes, don’t even think about tipping a waiter. It’s considered rude.
5. Maybe Give a Little More this Year. Yes, tipping is discretionary. But the recession has changed the rules. Consider opening your wallet a little wider now, especially if you experience superior service. Why? The workers you tip are at the low end of the pay scale. “Everyone’s watching his or her pennies, but these people need tips even more,” says Lydia Ramsey, business-etiquette expert and author of Manners That Sell: Adding the Polish That Builds Profits.
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Reader Comments (12)
Posted by: Jim at 11/11/2009 12:28:47 PM
Just as a matter of curiosity, is there any objective information on actual -- as opposed to recommended -- tip percentages? Something that can be verified and (hopefully) comes from an unbiased source. The closest thing I'm aware of is the stuff IRS puts out to the effect that if anyone reports taxable tips below 8% he has some explaining to do. Those guys are pretty hard-nosed, and I'd guess they'd have something to back up that number. Still that's not really objective information, and the source may not be altogether unbiased. I'm not a waiter or anyone else dependent on tip income, but I do recall that years ago the amount was 10%. Then it jumped to 15% and now seems to be pushing 20%.
Posted by: Stefan Helgi Valsson at 12/02/2009 07:32:51 PM
Tipping in Iceland is not considered rude! Quite on the contrary, it is greatly appreciated by those who depend on the service industry for a living. However, should one encounter someone who prefers not to receive a tip - his/her wish should be honored. Stefan Helgi Valsson - Professional tourist guide in Iceland since 1988.
Posted by: Bill at 12/10/2009 12:11:09 PM
$20 to $25 for the trash collector? How is the transaction made? In my town, a team of three shows up to collect the trash, followed later in the day by another team of three to collect thr recycling. How many of them get a tip and how much?
Posted by: Analytical at 12/10/2009 12:20:31 PM
I don't think we should forget tipping those that make a really big difference in our lives. I'm not putting down hairdressers, baggage handlers, taxi drivers, or paperboys but let's not forget our doctors for getting us healthy, our dentists for preventing much larger health issues, our accountants for saving us money or keeping us out of jail, our financial planners or stock brokers for keeping us ahead of inflation, our airline pilots and train conductors who get us to our destination safely, our local firemen and policemen for risking their lives and keeping us safe every day, our car mechanics for getting us back on the road, and our military for fighting wars they will not benefit from to name just a few of the many, many dozens if not hundreds of people we depend on regularly as well? Why don't we very generously tip all of these people and many, many more? How much is your health and that of your family worth to you? It is just so ironic and bizarre these 'rules' which are randomly made up around who to tip and how much so that wages can be redistributed to the customers to increase profit margins. How clever! Maybe a sensible person would realize tipping is not a universal custom and in countries that treat even their lower skilled laborers like human beings with a livable wage, tips can be considered offensive or a bribe. Oh, I forgot, we don't pay livable wages here in this great land and simply call bribes, tips or maybe even investments in a society that has no values or honor anymore. Think about it people. Tipping is like taking pity on the alcoholic and giving them a bottle for Christmas. Your heart is in the right place but your brain is not working.
Posted by: JD at 12/10/2009 04:32:14 PM
I have never liked obligatory tipping. I should not have to pay for a poor job. I should not have to pay more than the agreed-upon price for an average job. I should be free to choose to pay extra for an exceptional job. Tipping is an insidious way to hide the real price, like surcharges on cell phone bills or airline tickets. An $8 lunch becomes $10, and you never saw it coming. This Christmas-era tipping for non-traditional services is even worse. As someone who doesn't work in a service industry, I feel cheated. Where's my tip just for showing up at Christmas?
Posted by: Suzanne at 12/10/2009 04:48:53 PM
I agree with Jim about tip percentages.....why has the percentage "due" restaurant servers gone up when the prices have gone up too? I am a low-income worker who does not receive tips, and sometimes the tip on a nice meal is more than I make in an hour but the server has several tables plus base pay. I think 20% is excessive, and I want to know who makes up these "rules".
Posted by: Jason at 12/10/2009 07:05:52 PM
I dont normally comment on articles, but this one is a soap box for me. Not only is the tip jar at a fast food restaurant / starbucks annoying to me, but also the 'tip' line on the bottom of nearly every credit card receipt I have to sign. I have to consciously and intentionally make the decision to tip or stiff them - whether it be carry out or not. And of course with the holidays there seems to be an even bigger push to try to get an extra $1 - $20 dollars from you at the checkout counter for just about every charity you can dream up. Pets, Homeless, Hungry, Sickness, etc. And the cashier just looks at you like you are such a tightwad if you dont donate a dollar to the XXX foundation. I give my charity when and to whom I choose, and I tip if I get service, but simply filling a cup of coffee you are going to charge $5 for is NOT worth a tip - ever. It's called, DOING YOUR JOB. It used to be that a 'tip' was simply the 'change' left over from an odd amount - "Keep the change". Then it became the customer's duty to give the server an additional 10% of the total bill, or maybe $1 per trip at the bar. Now it seems that prices and tips have inflated to a point where I cant afford to go out. I have worked for tips and I know some people make loads of cash and some dont. So here is a tip: Get an education so you can have a salary job and not be slinging hash for $3/hr.
Posted by: AKA at 12/10/2009 08:50:23 PM
Ok, for those wondering about servers, it is what it is, whether you agree with it or not. It depends on the state, apparently in Massachusetts and California servers make more so you don't have to tip as much. However, I served in Florida at a Bennigans 5 years ago and I only made $2.13 an hour, and that was the standard rate for servers in Florida then, even at high end restaraunts. What's more, we had busers at Bennigan's and the bartenders had to make our cocktails so WE had to tip THEM 3% of our sales that was dispersed among them. So yes, to earn a livable wage we needed to give great service and get 18-20% because we automatically lost 3%. Once I had a table from Australia stiff me on a $70 check so that means I actually had to pay over $2 to wait on them. Totally ridiculous but it was what it was. I live in The Netherlands now and have a friend who used to wait tables in Denmark, that's bogus about not tipping them. If the service is good 10% is appreciated, just like most of western Europe, they barely make a livable wage.
Posted by: john at 12/11/2009 04:05:28 AM
Don't forget to tip your dealers when gambling. wheather you win or loose you are being provided a service just as a waitress brings you food and drinks the dealer is providing cards and making an enjoyable game. tipping varies but a bare minimum is one hand of your play every hour. Since you are getting about 50 hands an hour it comes to about 2% of your wagers. Be generous since they make minimum wage from the casino.
Posted by: Mark at 12/11/2009 06:03:43 AM
Don't listen to these "authorities" on tipping. Who decides which jobs are tip worthy and which are not. It is all a bunch of B.S. Have you ever considered a person eating at a particular restaurant might make less money than the server and not receive tips at their own job. Why should they tip these people when they do not receive tips themselves. My advice ... save your money, don't fall for the scam and don't tip!
Posted by: RB at 12/11/2009 08:57:23 AM
All I know is the hotel I work for pays me $4.25 an hour because I am considered to be a "tipped" employee. The law allows them to pay less than minimum wage since I get tips. If the tips I receive through room charges and credit card payments (vast majority) don't bring me to at least the Fed. minimum wage at the end of a two week period, the hotel must make up the difference. Usually the tips bring my wage above the minimum. The tips are held on record and given as taxable income on my pay check. I get a few cash tips which can be hidden from tax and simply pocketed, but this is a very small amount in my position. Tips are what we are truly working for. I agree its up to us to go the extra mile and give great service to earn them. If you get great service, consider the person is depending on you to reward that.
Posted by: Laura Cohn at 12/11/2009 01:31:45 PM
This is Laura Cohn, the writer of the piece. Thanks to all for your comments. We love hearing from our readers! The thing to remember is, as we say in the piece, tipping is discretionary. But since there's widespread confusion over what's appropriate, we thought a piece about tipping would be useful this time of year. The other thing I wanted to say was, these guidelines were not "randomly made up," as one of you said. They were culled from extensive research and numerous interviews with experts. Hope this helps.