It is one of the most vexing questions in day-to-day money management…how much should I tip? It’s not always clear how much we should tip – or IF we should tip. Here’s a Q&A on the topic with Certified Financial Planner Paul Fain:
PAUL, GIVE US A PRIMER ON MODERN TIPPING ETIQUETTE – AFTERALL WE DON’T WANT TO BE A SCROOGE BUT WE ALSO DON’T WANT TO BE UN-INFORMED!
The word “tip” is actually an acronym for “To Insure Promptness” or “To Insure Performance.” Of course we want to be fair but smart, sometimes the amount of a tip is based on long-standing norms. In other cases, tipping expectations evolve. For example, a growing number of restaurants are transitioning to paying their staff a higher wage. Some guidelines:
- Range: 15-20% pre-tax
- Zagat survey: national average tip 19%.
- Automatic gratuities: 18% for groups
- Delivery: 10-15% (Pizza $2-5)
- Take-out: No obligation. 10%
- Tipping jar: No obligation.
- Valet: $2-5 when car is delivered
Source: Emily Post Institute
WHAT ARE SOME MORE EXAMPLES OF TIPPING GUIDELINES, LIKE CABS OR HAIR STYLISTS?
- Traditional: 15 to 20% of the fare
- Uber/Lyft: “Tipping is voluntary but appreciated.” I do since my trips are short.
This always confuses me, for my wife -she typically encounters 2-3 different people who deserve tips:
- Shampoo: $2-5
- Colorist: 15-20%
- Stylist: 15-20%
The salon owner is one exception when a tip may not be necessary. If the owner of the salon charges more for his or her services than other stylists in the salon charge, you do not tip. If he or she charges the same, then you do tip.
Seasonally, a gift card or cash is appreciated and might help your service!
- Trash service
- Mail carrier
- Newspaper delivery driver
- Dry cleaner home service
AND THE STICKY QUESTION, WHEN NOT TO TIP?
When to Withhold
- Remember that a tip is largely based on the quality of the service you received.
- Sometimes bad service happens.
- Leave 10 to 15% tip and request a conversation with the manager. Allow him or her to make it right.