The 10th Man

Tipping for Dummies

December 6, 2018

Tipping is a personal finance topic that does not get a lot of attention. In fact, most personal finance experts turn people into lousy tippers. After all, if you go out to eat 500,000 times, and you stiff the server for $2 each time, you will have $1 million and can retire at age 35 and eat canned peaches. Or something like that.

Heaven forbid you’re one of these people who relies on tips for your livelihood—you might have a different opinion.

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I have seen some bad tipping. Like when a couple shows up to a restaurant with three kids under 5, and the kids just hammer the table, smearing food and snot and barf all over the place, and it takes 3 servers 20 minutes to get it all cleaned up, and they leave a $4 tip.

I have also seen 12 women go out for a sushi lunch, then ask for 12 separate checks, spend 15 minutes haggling over which spicy tuna roll belongs to whom, then everyone breaks out the 17% tip calculators to calculate the tip to the penny.

When my wife and I go out to our usual place for dinner, it comes out to $37. I throw down a fifty and leave. No fuss, no muss. They are always happy to see us.

Which is the point! Don’t you want people to be happy to see you, instead of sad to see you? It’s not even really a matter of getting better service. I take care of people I like. Usually they take care of me.

If I am at a restaurant—any restaurant—I give a 17% tip for bad service. Most of the time, I give 25%, but if it’s a restaurant I go to regularly, and I have a personal relationship with the server, I give 30-40%. When you tip 30-40%, you would be surprised how often things seem to fall off the bill.

In the event that your head just exploded, let’s break this down, shall we? Let’s say you go out to eat twice a week, so about 100 times a year. On a $50 bill, the difference between a 20% tip and a 30% tip is $5. 100 times a year comes out to $500.

You should not be going out to eat twice a week unless you have a household income of $160,000 a year, and if you do, you can afford an extra $500/year in tips.

Maybe this is just me being a cold-hearted investor, but I would much rather spend that $500 on tips than charity.

Without further ado, here is the Dillian guide to tipping:

Restaurants

Places you go once: 20-25%.

Places you go all the time: 30-40%.

Minimum tip, no matter how small the check is: $5.

Valets

Valets are usually young guys looking for some spending money in the summer. The job is harder than it looks. Minimum tip: $5. You’re trusting them with your car.

Uber

Never tip Uber. I tipped Uber once and the driver gave me a 1-star passenger rating. If Uber drivers don’t get paid enough, it’s Uber’s problem. The whole point of Uber is that it’s supposed to be cheaper than cabs.

Housekeeping

I throw $5 on the pillow. Sometimes I forget, and then I feel terrible.

Porter

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The usual recommendation is $2-$3, but I have a tough time giving less than $5. $2 doesn’t really move the needle if you’re hauling bags 3-4 times an hour. Also, like the valet, it’s your bags. You want someone to take care of them.

Tip Jar (like at Dunkin Donuts)

Instead of tipping 35 cents each time, once a month I throw a $20 in there. Works out about the same, but gets a lot more attention, and service improves dramatically.

Pizza Delivery

$5 for a single pizza.

Airport Curbside Check-in

I don’t use these guys, but you’re crazy not to tip huge.

Taxis

I have motion sickness issues in cars. If I get there and I’m feeling okay, I tip 25%. If I get there and I’m ready to barf, I tip significantly less. Drivers who display anger issues while driving make me not want to tip at all.

Airport Shuttles

I have a tough time with this. Usually I’m wrangling my bags and it’s a hassle to get my wallet out to fumble around, fishing for a couple of bucks.

Bathroom Attendants

Always tip the bathroom attendants! It’s a gross job and nobody tips them. They really appreciate it when you do, even if it’s only $1.

Coat Check

Always tip, under the same principle as the valet and the porter.

DJ

Tip the DJ $50 or $100, even if you’re not happy. Most of the time, people aren’t happy. You do it anyway.

Hairstylist

Big. Really big. My haircuts cost $25 and I tip another $25 for a total of $50. If you have someone you like, take care of them. It is insanity to cheap out on a haircut.

Manicurist

You don’t want to get MRSA. Be generous.

Movers

Moving is the toughest job in the world. Buy them lunch, buy them Gatorade, and tip generously at the end. Maybe even tip at the beginning.

I am not a big believer in karma. I don’t tip because I think something good will happen to me in the future. I tip because I think something good will happen to me now!

And it’s good to take care of people you like. You have to stiff a lot of people to get to a million bucks. Don’t go that route. It’s not worth it.

Reminder: Street Freak Subscribers Call

A quick reminder for Street Freak subscribers that today is the last day you can send in a question for our call. You can do so via the link in the email you’ll be getting from me today.

The call takes place on Tuesday, December 11 at 2:00pm ET. If you’re not free, send in a question anyway! You’ll be able to listen back to the call whenever you want.

Jared Dillian
Jared Dillian

 

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Lcarn444@aol.com

Dec. 8, 3:39 a.m.

Six years ago, when my mom turned 91, she handed me her car keys when she decided it was time to stop driving.  In addition to my now driving her to the doctor, the hairdresser, the supermarket, etc., we went out to eat frequently.  At least twice a week I would take her to our favorite restaurant for dinner preceded by her beloved dozen raw oysters.  We developed an affinity for three servers who made our dinner not just a meal but a social event.  I always tipped a minimum of 30%, usually more, and dinner was always perfect.  At one meal, all three of our servers happened to be working that shift.  Throughout the meal, each one of them came over to say hello, hug my mom, joke with her and just make our visit special.  The assistant manager and the manager stopped by too.  We also ask about their children, their parents, their vacations and other details we have been privy to over the years.  As we were leaving, the man in the next booth said to me, “I don’t know who you people are, but I’ve never seen anything like the way you get treated.”  One of our servers once said to me when I gave her an envelope at Christmas, “You know, it’s not just the money, it’s the feeling that someone appreciates me and what I do.”  My mom is now 97 and failing rapidly, so it’s not possible to take her out, but when I stop by the restaurant by myself, they always ask how she is doing. Those six years were magical.  And tipping generously was part of the equation.

Hsin Hsin Oei

Dec. 7, 3:45 a.m.

Hi Jared, I thoroughly enjoy reading your articles - with the dry wit and all; especially on TGIF days. Regarding this call, is there any chance it will be recorded and post in this website? I’m live in Asia.

rcgammon1@gmail.com

Dec. 6, 2:59 p.m.

One of my young colleagues recently taught me something clever:  He buys a currency strap of crisp, $2 bills from the bank, then uses one or two of them to tip the people you’d normally tip $1, $2 or $3.  The novelty value is so great he says it’s as if you gave people a gold coin.

You only have to have worked as a busboy once to appreciate Jared’s inclination to tip everyone very generously, and before or during, not necessarily after, the service has been rendered.

themistocles2010-2020@yahoo.com

Dec. 6, 12:47 p.m.

i tip about the same (except for really bad service, then it’s ≈10%. Feedback is important.

However…

There was something left out of the article: why would an Uber driver give someone one star? That doesn’t happen arbitrarily; the passenger must have been a problem. Don’t blame the driver 100%. It takes two to tango, no?

And why paint all Uber drivers with the same brush? The rationale given could apply just as well to taxi drivers, too.

Next: I don’t understand tipping a DJ (althought that’s one service I don’t use).  Don’t SDJ’s make good money already? Forbes reports on numerous DJ’s making multi-millions per year. Of course they can’t all make that much, but it isn’t like a DJ job is the equivalent of a waitress. Isn’t tipping mostly for low income service workers? Because I was a real estate broker, and no one ever tipped me…

You also forgot cruise lines that assign personal cabin stewards. Those guys are in the same boat as porters or pizza delivery guys, and they’re horrendously under-tipped (and underpaid, too).  On a recent one-week river cruise I tipped $100 (I should have given more).  The guy was almst pitiful in his appreciation. I asked him if that amount wasn’t normal. His answer: he’d been doing the job for two years, and no one had ever tipped him $100 before.

Finally, airport shuttles: Why does the author have “a hard time” with tipping the driver? Just have your tip in hand when you board; problem solved. Again, there’s more here than what was disclosed in the article.

Tipping well is required under the principle of, “There but for the grace of God go I.”

Luck plays a far bigger part in most folks’ wealth than they’ll admit. Sometimes one wrong turn can make the difference between ending up as a bathroom attendant, or a CEO. That may be unbelievable to younger folks — until it happens.

The wheel of fortune always turns. Be nice to people when you’re on the way up, because you’ll probably meet them again on the way down…

robertbennett@eircom.net

Dec. 6, 11:48 a.m.

Workers should get paid by their employers and customers should pay for the service as on the label or menu. Workers should not depend on charity and ‘drop off’ some items so as to maximise tips. I live in Europe. The restaurant staff are properly paid and we do not tip except for something very unusual such as arriving late and yet being served. The US still has a slave mentality.

Steve Pelletier

Dec. 6, 10:36 a.m.

You forgot one. At a restaurant, tip the manager $50. No one ever tips her and she will make sure you get excellent service from all the staff, not just the wait staff.

Brad Hobbs

Dec. 6, 9:52 a.m.

I agree with your philosophy.

Here are some additional thoughts.

Occasionally my wife and I will be traveling on a holiday… If you are doing that and stop by a Waffle House or similar… There are some salt of the earth people working here and they are not with their families like most of us.  They are not getting rich serving you either.  If you buy a cup of coffee to go leave a $20 If you sit down and eat a meal leave a $100…

If you want to make their day, or more likely their month, this is what my wife and I do.  Give your waitress a credit card with instructions that until you leave, every bill goes on your card, tell her not to tell who did it.  Ask her how many people are working today and give her a $20 for each person there, tell her that you will take care of her when you go… leave her $100.  There is a hi chance that someone out of the crew is likely to break down and cry…  At the very least, you will make some new friends.  Just watch the people, you can see their attitudes change.  The gal sweeping the floor is going to look like she is enjoying it, the cook will flip those pancakes with new enthusiasm.  These are folks that never get tipped a $20.  ...and likely they are in need of a few bucks to buy their kid a toy.

That will probably be the best Christmas or Thanksgiving experience you have.

stuff04@me.com

Dec. 6, 9:52 a.m.

You are surprising light in one area:  housekeepers in hotels.  Their wages are low and the work is physically much more demanding than all of the other jobs you mention.  At least $10 per night and be sure to leave it daily on a multi-day stay because it may be a different person each day (they often have to tolerate erratic schedules because of fluctuating occupancy and the new “green” incentives like bonus points to small discounts designed to get guest to skip service altogether on multi-day stays).

lbookman@comcast.net

Dec. 6, 9:46 a.m.

Good advice. What about tipping for takeout? Never know what to do here


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