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The Money Crasher’s Guide to Tipping

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We live in a society where service industries thrive by performing superior customer service. Because we live in a capitalistic economic system, a custom of rewarding superior customer service has developed through the use of tipping. Tipping is a controversial subject because many people disagree about who to tip, when to tip, and how much to tip. There are no set laws about these various aspects of tipping. In fact, there are not any laws about tipping at all. If you go to a sit-down restaurant, eat a meal, and leave without tipping, you won’t be breaking the law. The market correction for people who do not tip at restaurants is that they will build a reputation of not being tippers, and the servers of the restaurant will not give them good customer service. If you don’t tip when you should, you won’t receive good service. It’s as simple as that. Here are some ideas about who you should tip, when you should tip, and how much you should tip:

  • Servers and Bartenders: You should tip about 15% to 20% to a server or bartender. Tipping 5%-10% is a slap in the face, but it may be warranted if they provided very bad service and you want to send a message. This is the most common service provider to tip. My personal opinion is that you should always tip your server or bartender unless they have completely failed to provide you good service and/or are extremely rude or offensive to you. Remember, sometimes the kitchen staff is responsible for your bad dining experience. It’s not always the server’s fault when the food is not cooked right or it comes out late. Note: Don’t forget that if you are dining in a large group, the tip is often already included in the final bill.
  • Food Delivery Drivers: Tip 10% to 15%, but never less than $2.00. Always tip a delivery driver unless the food is obscenely late.
  • Movers: $10 to $20 per mover unless you’re getting a full-service move. Then, the cost of the movers is included in the hefty price. Just provide cold drinks and food for the movers the day of the move and they’ll take good care of your stuff. Many homeowners are more likely to damage their stuff rather than professional movers. If you’re really paranoid about your stuff, you might want to tip no matter what, but accidents happen whether you tip $10 or $50.
  • Barbers and Hair Stylists: Usually $2 to $5 is good for a barber while 10% to 15% to hairstylists is necessary, especially if you visit them regularly. Girls, you don’t want your hair stylist pissed off at you with your hair at their mercy.
  • Hotel Staff: $1 to $2 for doormen, bell hops, and valet parking attendants. Tip your maid $2 to $5 dollars a day if you want to ensure that your stuff is in good hands. Concierge should be tipped well if they do something extraordinary for you.
  • Taxi, Limo, Shuttle Drivers. Usually 15% of the fare is good, but you might want to do 20% if they help you with all of your luggage. Watch out, because some airport transfers and limo driver’s fees will already include gratuity, but they won’t refuse extra.

People You Shouldn’t Tip On a Regular Basis

  • Financial Professionals
  • Attorneys
  • Contractors
  • Any salesman that works on commission
  • Mortgage loan officer
  • Real Estate agents
  • Travel Agents
  • Appliance Repair Technicians
  • Computer Technicians
  • Landscaping Service and Pest Control
  • Dry-Cleaners
  • Fedex/UPS couriers
  • Post Office couriers

Tipping and Giving on Christmas and Winter Holidays

The Christmas and Hanukkah holiday season is definitely a time for giving. You may want to consider giving a gift or a tip to the service providers in your life that you normally wouldn’t tip. A post office worker, garbage man, personal trainer, tutor, baby sitter, newspaper carrier, nannies, maids, gardener, and others should be considered for a small holiday gift or cash gift. These people make your life easier throughout the year, and you should attempt to show some appreciation to them during the holiday season.

Here is a link for a more comprehensive list on tipping etiquette guidelines. It’s important to remember that tipping is still an act of giving whether it’s an unsaid requirement or not. You’re not legally obligated to do it, so it’s still an act of giving. Do it out of the goodness of your heart, but do it in accordance with the quality of service provided. Don’t limit yourself to tipping the “recommended” amount if the importance of the service provider in your life exceeds the recommended amount.

What are your thoughts about tipping and who you should tip?

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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