Has Tipping Gotten Out of Control?

With prices on everything creeping up, many are watching where every penny goes, and that includes gratuities. Many people across Virginia and the rest of the country feel tipping has "tipped" over an edge of acceptability, and they are pushing back.

"I resent the practice of tip prompting. It's designed to make someone look like a cheapskate if they pay less than 20% or even 25%. I've always been a decent tipper and understand that the server's wages are low. But I don't like being made to feel morally inadequate if I leave something in the 15-18% range," says Carl Horowitz, commenting on a recent post in Moneywise.

From fast food restaurants to coffee shops, retail stores to dry cleaners, grocery stores to self-checkout machines, more and more businesses are asking for tips that never did so before.

In the same Moneywise article comment section, Frank Villaine wrote, "It's fine to tip (or be tipped) for good to exceptional service. but when people expect it or worse yet, expect patrons to subsidize their payroll, I have a problem with it."

In a recent CBS News survey, 72% of Americans think tipping is expected in more places than it was five years ago. Ninety percent feel tipping is excessive today and blame businesses for trying to supplement employees' income through tips rather than paying them a fair wage.

Where it Began

The tipping culture we are experiencing today has evolved since the pandemic. In the early days of the COVID-19 pandemic, many businesses were struggling and people began tipping more than usual to support essential workers during the crisis. The issue now is that many of these practices did not go away.

A 2023 Pew Research survey of 12,0000 U.S. adults showed that 72% were being asked to tip service workers more frequently than in the past.

How consumers pay also changed over the past few years, with more businesses adopting point-of-sale technology that encourages tipping after an order. This system has increased the "guilt" and confusion that consumers face, which was never there before. According to Nora Moran, marketing professor at Cal State, "People don't like being surprised like that."

Hidden Tips

Many restaurants and other service-oriented businesses have started adding "restaurant fees" or "kitchen tips" to their bills, without informing their customers beforehand that these amounts will be included. Nail and hair salons will add a small fee for "back-end" costs. Plus, according to LawPay, many merchants will collect up to 3% in surcharges from customers to cover credit card charges if they pay the processor back, or, often, the payment processor will collect the credit card fee directly from the customer, and the merchant isn't able to remove it.

DoorDash and Uber Eats often include additional fees such as a delivery fee, service fee, local operating or regulatory response fee, and/or a small order fee in addition to the tip. You may have heard stories about drivers who will not deliver orders if they don't see a tip on the receipt, which goes against the idea that the tip is for services, not the order itself. You may want to note that the tip will be given at delivery, if you have the cash handy to do this.

When Should You Leave a Tip?

Money expert Dave Ramsey and other advisors believe tipping is essential for certain services. These include:

• Restaurants - "If you can't afford to leave a nice tip, don't go"

• Bartenders

• Restroom Attendants

• Nail and Hair Salons - 15% is fair

• Deliveries - 10% or more, especially if extra effort is involved, like bad weather

• Hotels - Ramsey leaves $20 a day for the maids

• Drivers - taxi, Uber, valet parking

• Massage Therapists

• Professional Movers - $10 - $50 per mover

• Flower Deliveries - $2-5 per arrangement as you probably don't know the price

• Repairmen, Appliance Installers, and pest Control—a tip is not expected but appreciated. If they come for an emergency, it's a good idea.

• Wedding Officiant

• Babysitter: If a child gets sick or the sitter has any other trouble - especially if you want them back!

• House Cleaning Service - 15-20% per cleaner is nice

• Carhop - at the car wash

• Buffet Restaurant - it's nice to tip the person who brings your water and drinks

• Any service worker who goes above and beyond

When Not To Tip

Tipping at counters when a digital prompt comes up is where Ramsey draws the line. He deems it a form of "manipulation" and simply won't participate. Other experts say that if your gut tells you, "No one did anything other than what they are being paid to do," then don't tip.

Others you don't need to tip:

• Coffee Baristas

• Grocery Store Baggers or Order Pickup Runners

• Cable Guy or Internet Installer

How to Lower Tipping Stress

There seem to be two types of stress when it comes to tipping - financial and mental! Here are some ways you can help reduce tipping stress:

• You may come across a situation where you feel you must leave a tip out of courtesy or even guilt. In those instances, having small bills, one or five dollars, for cash-only gratuities is a good idea. For many, leaving cash helps you know (depending on the business policy) that the money is in the hands of the server and not going to the business.

• Another rule you can follow to help relieve uncertainty is to tip only at sit-down service businesses, not at counters.

• Check your checks carefully before handing over your credit card. If there are fees for kitchen staff, facility fees, etc., you may want to deduct those from your total tip.

• And, never tip on taxes and fees. Tip only on the cost of the service, food, or product you received.

• Leaving a small tip for someone working in a minimum-wage job can mean a great deal to that person. If you have had a pleasant experience, feel free to tip. It is your choice. Keeping that in mind and not allowing pressure to motivate your tipping will help you feel more in control of your finances and obligations.

Bonus

Traveling in the U.S. often has more tipping requirements. Fodor's has produced a chart that will help you know who and how much to tip when you are on the road:

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Sources: Forbes, CSun Newsroom, Bergen Record, Harvard.edu, Moneywise, RealSimple, Fodor's, Ramsey.com