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Four tips for tipping

Counting Cash FBN

Some say the word “tip” came from the 17th century where feudal lords threw gold coins as “tips” to the peasants in the street to ensure safe passage to their destination.  No one is exactly sure about the word’s origins, but with a little understanding, advanced planning, and agreement, thoughtful tipping can ensure your safe passage and a chance to show others well-earned gratitude.

Tips show gratitude for assistance and a job well done. But tipping is also confusing. What’s the right way to tip someone? How much should they receive? Will a tip be seen as a reward or an insult? There are no set rules for this common practice despite the fact that Americans will spend millions in tips this year.

At a restaurant we know we should tip our waiters. We understand that their tip makes up part of the income earned by the person who serves us our food. But what about the people who groom our pets, deliver our pizza, take away our garbage, or cut our hair? How much should they receive as a tip?

Many of us have a moment of truth where we’re simply not sure what to do. Add another person, a spouse or significant other, into the mix and deciding on the appropriate amount to tip becomes even more complicated. What happens when we don’t see eye-to-eye on the amount to tip with our dining companions or our spouse at the fancy hotel?

Here are four confusion-free, strife-saving tips for tipping:

1. Understand tipping

Educate yourself on why we tip and how American service workers are paid. Tips show gratitude for assistance and a job well done. They are a major source of income for some service professionals.  In fact, food servers earn most of their income from their tips since the federal subminimum wage in some states is barely over $2 an hour.

Many service providers strive to find ways to excel at their work in hopes of a generous tip.

Studies at Cornell University found that waiters were able to increase their tip percentage by incorporating several behaviors: squatting at eye-level with their table of diners, briefly touching a patron on the shoulder, giving free candy with the bill, and offering extra explanations or assistance to their customers.

2. Plan ahead

Tipping service professionals is a permanent part of our economy. It’s a practice that is not going to disappear. Think through your list of errands and anticipate that post-service “tip moment” and gladly give the person who served you their pay. You can avoid a surprise or uncomfortable moment by reviewing a list of possible workers who may expect a tip.

Plan ahead and enjoy a nice moment of mutual gratitude, and your sweet-smelling poodle or freshly delivered pizza.

3. Determine how much you want to tip

Identify how much you want to tip for each category of service. You can always reward outstanding service with more cash and lackluster service with a little less. There are general tipping guidelines with these being the most common:

Wait service – 15-20% pre-tax

Take out food – No obligation

Hair salon – 15-20% 

Pizza delivery- $2-5 based on distance or weather conditions

Taxi - 15-20% of fare, bags additional

Skycap - $2 first bag, $1 additional bag

Apple’s iTunes offers 381 different free apps to help you calculate the tip on your dinner tab. The most basic apps help you calculate your tip, and then divide the tip and tab among any number of separate diners.

The most outlandish apps let you:

  • spin a wheel to decide the tip amount
  •  time your server with automatic tip-percentage deductions as the time increases with thumbs up and thumbs down buttons to add or subtract to the shrinking percentage
  • pick your tip percentage (up to 25%) and then divide the bill and tip among “the number of rich people, number of average people, and number of broke people” at your table to see who pays what portion of the bill.

4. Tip together

Not everyone has the same philosophy when it comes to tipping. It is highly likely if you paid your bills for years waiting tables you now enjoy leaving a big tip, but your partner (who never held a tip-necessary job) gets irritated by your generosity. Maybe neither spouse waited tables or delivered flowers but you still consistently disagree on tipping.

Work together to make a list of everyone you want to tip for his or her service. Then abide by that list. If you’re a Spender, resist tossing an extra ten bucks in the tip jar at the coffeehouse just because. If you’re a Saver, resist the urge to think “why should we tip someone when they’re just doing their job?”

Thank people, together, for their service.  Differing views on money can certainly cause tension in a relationship but it may also provide tremendous balance and insight to your Money Relationship and your tipping strategy.

Scott and Bethany Palmer, the Money Couple, are the authors of The 5 Money Personalities: Speaking the Same Love and Money Language (Thomas Nelson, 2013). Follow them on Twitter @themoneycouple, and get your free money personality profile here.