How Much You Should Tip and When You Should Tip in Today's Changing Service Sector Economy
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How Much You Should Tip and When You Should Tip in Today's Changing Service Sector Economy

even though technology and industry changes have altered the service sector, tipping should still be based upon quality of service

November 3, 2019

Tipping is something of a no-brainer for some people and a source of instant anxiety for others. It's getting especially complicated now that businesses where you didn't tip before now include a tip option. Or maybe you are presented with a tip option on the display at the register while the clerk is watching you. So when is it customary to tip and when should you just take your stuff and leave?

Tipping is an American Tradition

It has long been customary in the United States to tip and many more places are giving you the option to tip. But it's not necessarily the same if you are traveling. The U.S. is often on its own as far as tipping goes. But some countries do not practice tipping at all. And tipping in other countries may even be viewed as offensive. The lesson here is to do your homework when you are going to be traveling to a new place. Never presume that what is acceptable here, tipping included, will be the same elsewhere.

An average tip in the U.S. is between 10% and 20%. In the U.K., tipping is often between 5% and 15%. In Australia, service workers often make around $20 (USD) per hour, so tipping is not expected at all. In Japan and China, tipping isn't necessary and may even be seen as rude. So do your homework.

Tipping is Sometimes Confusing

Even if you are a regular tipper and consider yourself knowledgeable about tipping, you probably don't know exactly how much you should tip, whether you should tip before or after the service, or whether you should even tip at all. Of course, answers to these questions typically depend upon where you are, as well as a number of other variables. For instance, you typically don't think twice about tipping a waiter in a restaurant. But you probably ignore the tip jar on the counter.

Tipping is a cultural obligation

Unfortunately, tipping has become more of a cultural obligation as opposed to a reward for good service. When deciding whether to tip, you should be looking at factors other than obligation. Tipping should be a reward for outstanding and prompt service. If you receive service that is below what is customary, or downright rude, your tip should reflect it.

Tip Wages vs Minimum Wage

Most people know about the minimum wage, but not many know about the minimum cash wage or 'tip wage.' Some workers who survive on tips are paid the tip wage, which is at least $2.13 per hour nationwide, though it could be higher. Tips make up the rest of the worker's hourly wage. If the worker does not make an average of the minimum wage from the addition of tips, the employer is required to make up the rest of the amount. While this may not seem bad, it cuts into the bottom line of the employer, who may dismiss the employee more readily for other reasons.

Sit Down Restaurants

Tipping waitstaff is usually pretty easy. If you are sitting down at a restaurant and being served, you should tip. Waitstaff, who are usually not paid an hourly rate like most other professions, depend upon tips in order to survive. So unless the whole experience is a total disaster, you should be tipping at least 10%. Consider tipping 20% if your service was outstanding.

buffet restaurants

Whether to tip when you're at a buffet restaurant gets a little trickier. If servers are not bringing food but still refilling your beverages and clearing your plates, you should tip. You don't need to tip as much as at a full-service restaurant. You can do a strict percentage of up to 10%, or one dollar per person at your table.

Restaurant Carry Out

Most of the time, you won't be tipping when getting carry out. But there's obviously a lot of different when picking up a pizza as opposed to ordering carry out from a sit down restaurant. The people making your pizza and handing it to you are making an hourly wage. In a sit down restaurant, that's usually not the case. The person giving you your order and taking your money is helping you, but probably still working on tips. So tip when appropriate. You'll probably want to consider tipping up to 10% when picking up from a sit down restaurant.

Delivery Services

Delivery services should almost always be tipped. But keep in mind that not all delivery services will allow the delivery person to collect a tip. Some workers collect minimum wage inside the store or warehouse but then get a much lower wage when they begin a delivery. You'll typically find some tipping guidance if you are ordering from a service via an app or other online presence. Newer services, like grocery delivery, can sometimes be a bit of a challenge. A tip of 10% or a few dollars is usually fine. When in doubt, ask. You can ask how much of a tip is usually customary if you call to place an order.

You can also ask your delivery driver how much is customary. In this case, you'll typically get a very honest answer because you're face-to-face and you won't draw any shifty glances if you give too little. Many delivery drivers collect a minimum wage, but some rely only on tips. You're compensating for effort, speed, friendliness and personal expenses e.g. gas.

Pizza Delivery

We should all be familiar with pizza delivery already. Regardless of the order size, you should be tipping a minimum of $2 to $4. Many pizza restaurants assess a delivery charge, stating that it's not a tip to the driver. While that's correct, the driver still typically gets it as a means to offset personal expenses associated with the delivery. But it's usually not enough to cover the low hourly wage, if one is even paid at all. If you have an especially large order, you should tip a little extra. You should definitely tip extra if the driver pushed through piles of snow to get dinner to you.

Valet Parking

It's customary to tip a car valet when a car is returned to you. The customary tip is between two dollars and five dollars. Very often the person parking the car is not the same person bringing it back. So you might want to tip twice.

Hair and salon services

It's also customary to tip a hairstylist or your barber. Consider tipping between 15% and 20% of the service. This also applies to manicures, pedicures, massages and the like. If you use the same person each time, tipping generously can very often get you great service on follow-up visits, thereby adding extra justification for the tip. Keep in mind that you should tip each person separately at a salon if you are receiving multiple services from multiple people.

The maid at the hotel

Tipping the housekeeping staff at the hotel is something only about one third of Americans do, but something that appears to be expected. While being an invisible service, they typically do much more than other hotel workers while still being paid less. If you decide to leave a tip, make sure to mark it and leave it in a conspicuous place. It's something that should be done daily since it's not always the same person doing the job. For most hotels, $2 or $3 is customary while $5 is customary for high-end hotels. If you do not want to tip, you should consider tipping on days where your room might need a little extra attention, such as if someone got sick.

Bartenders

It's pretty easy to tip a bartender. You should leave $1 per drink or $2 for a drink that's a little bit more complicated. If the bartender gives you a glass of water, you probably shouldn't leave more than $1. Bartenders typically make less than minimum wage, so your tip can make or break the bartender's night.

Concierge

A lot of people feel compelled to tip the concierge at the hotel for everything. If the concierge gave you directions to the corner store, don't tip. If the concierge gave you something really special that you could not get on your own, you should be handing over $10 to $20 for their assistance and connections.

Taxi and Ride Share Services

Tipping a cab driver depends upon the length of your trip and how well the driver performed. Did the driver take a longer route than necessary? If so, your fare just went up and your tip should go down. A general rule of thumb is about 10% to 15% of your fare. If the driver was careless and reckless, tip nothing. The same rule applies to Uber and Lyft drivers. You can also leave feedback if it was truly bad.

Counter Tip Jars

There's a tip jar on most counters these days, such as at the local coffee shop. If you ordered something that didn't require a ton of preparation, you can but shouldn't feel obligated to tip. If you ordered some fancy drink, you should consider tipping something, even if just your loose change. You see these jars popping up in more and more places, such as at casual dining restaurants. Sometimes these jars are there because it's customary to tip. Other times these jars are there because the staff feel underpaid or want more money. If it does not feel appropriate to tip, don't tip.

Feeling the Pressure on the counter pads

Receiving counter service used to be pretty straightforward. But not that many establishments are transitioning to touch screens to process your order, it's become more confusing. In order to complete your transaction, the cashier swings that pad around and you are presented with the option to select a tip before you can proceed. Your anxiety level increases and you select a tip to avoid the awkward feeling and the judgment of being a cheapskate. But your tip amount should be based upon the level of service you are given, as well as the type of establishment.

If you don't feel comfortable leaving nothing because of the pressure, you can select the smallest amount. If you are at a fast casual restaurant, you can always leave a tip afterwards once you see how the service turned out. If you don't want to feel uncomfortable selecting nothing at that time, just ask at that time where to leave a cash tip afterwards. But keep in mind that many counter service workers make minimum wage or even more than minimum wage as opposed to full-service waitstaff for make tip wage.

If you are receiving service at a coffee shop, for example, it's customary to tip a little something for making the drink. But if the extent of the interaction is handing you a premade good and ringing up the order, you shouldn't feel obligated to tip. It's a different story if you are making a lot of special requests, someone brings an order to you, someone is refilling your beverages, etc.