February 22, 2024
Cash and Cash Equivalents

Tipping in America is on the decline; that may be because many don’t know who to tip or how much

Despite the act of tipping being a pivotal source of income for most U.S. residents who work in the service industry and a cultural zeitgeist for a work-hard capitalist mentality, many Americans refuse to partake in the tradition.

In a recent survey published on June 5 by CreditCards.com, 73% of Americans said they intend on tipping at a sit-down restaurant. But that number is down 77% compared to tipping numbers in 2019.

Fifty-seven percent of respondents to the survey said they will always tip delivery drivers, a 63% decrease from how Americans tipped in 2019.

“While more than a third of Americans pledged to become better tippers in 2020 and 2021, it seems that sentiment has worn off,” said Ted Rossman, senior industry analyst at CreditCards.com. “Inflation is cutting into consumers’ purchasing power and a tight labor market has left many service industry businesses understaffed and struggling to provide top-notch customer experiences.”

A separate report from The Wall Street Journal found that overall, the amount of tips workers make is on the decline.

One reason tips may be decreasing is due to more businesses using online apps to make appointments and accept payments. When customers pay with cash, they tend to tip more. Many online payment services calculate tips based on percentages, which might be lower than the amount most people would generally think to tip for a service.

One barber who spoke with The Wall Street Journal explained that a customer who usually tipped heavily for haircuts recently made their first payment through the business’ new app. The tip was only a third of what they would normally give.

Another cause for lowered tips could be the rise in prices. Even an increase of 50 cents can cause customers to leave smaller tips.

Full-service dining, however, is still seeing strong tipping habits. Customers paying for in-person dining services have started tipping more than 20% on average. Meanwhile, remote transactions at restaurants receive 16%, according to the Wall Street Journal report.

Despite this data, there still remains a nuance to the art of tipping.

The COVID-19 pandemic made tipping extra crucial as many reeled from a global pandemic and tumultuous job market. It’s a way to thank the people who make your life easier. But why is it so hard to figure out whom to tip and how much?

The demand for delivery services skyrocketed during the coronavirus pandemic, but a survey published in July 2021 of American adults found that this didn’t necessarily translate into more or better tips for service workers.

A poll of more than 2,500 U.S. adults last year on behalf of CreditCards.com found that sit-down dining is the most likely to garner a tip — but the figure fell slightly from pre-pandemic times.

Roughly 75% of customers said they “always” tip while eating at a restaurant, while just 5% said they “never” tip in the 2021 survey. That number dropped two percentage points from 77% who said they always tip in a survey conducted in 2019.
So will this be a factor for workers who depend on tips this holiday season?

Here’s all the etiquette you should know.

Cash is often best, but not absolutely required

If you can afford to give only a few dollars, a small gift or homemade item may be a better way of expressing appreciation.Of course, not everyone is good in the kitchen — or welcomes homemade goodies.

Match the tip to the relationship

The amount you give can reflect the quality and frequency of your interactions. You might tip an occasional babysitter the equivalent of one evening’s pay, for example, while a live-in nanny could get a bonus equal to one week’s pay, or more. A small gift in addition to a tip is a nice touch when the relationship is more personal.

A tip roughly equal to the cost of a single visit might be appropriate for:

  • Babysitters
  • Housekeepers
  • Dog walkers and groomers
  • Personal trainers
  • Pool cleaners
  • Snow shovelers
  • Hairstylists or barbers
  • Massage therapists, facialists and manicurist

Tipping workers for the holidays can sometimes feel like a lot of pressure for such an important job but a separate
CreditCards.com survey revealed just how most people give during the holiday seasons.

The survey found that housekeepers and childcare providers are tipped the most at an average of $50. Forty-seven percent of adults plan to tip their housekeepers and 41% plan to tip their childcare providers, according to a recent report from FOX Business.

Landscapers are tipped an average of $30, while teachers are tipped $25. Trash collectors and mail carriers are tipped an average of $20 but only 19% of adults plan to tip their waste management workers.

  • Yard and garden workers ($20 to $50 each)
  • Trash and recycling collectors ($10 to $30)
  • Handyman ($15 to $40)
  • Package deliverer ($20, if allowed; check with the company)
  • U.S. Postal Service mail carriers (small gift only; no cash, per USPS rules)
  • Day care workers ($25 to $75 each for those who work with your child; check with facility)
  • Newspaper deliverer ($10 to $30)
  • Building superintendents ($20 to $80)
  • Doormen ($15 to $80)
  • Parking attendants ($10 to $30)

Not every helper should be tipped

If you tip someone regularly throughout the year, a holiday tip may not be necessary. Cash tips also aren’t appropriate for certain people, such as professionals (doctors, lawyers, accountants) and anyone who works for an entity that prohibits them. For government workers, for example, a tip can look like a bribe. Check with nursing homes, home health care providers, package delivery companies and day care centers, especially, before tipping individual workers.

Make it pretty

Fresh, crisp bills tucked into a card with a handwritten note? Classy. Wadded bills thrust at the service provider on your way out the door? Not so much. Ditto leaving an extra-large tip on a credit card receipt. Something’s certainly better than nothing, but putting some care into your presentation can demonstrate that you really do appreciate what they do for you.

Tip early

The holidays are stressful. Especially this year while a global pandemic is still raging. Sending holiday tips as early as possible might ideal for people depending on those tips to cross off their holiday shopping lists as soon as possible. Tipping early in the holiday season means people have extra cash to spend which may even include giving away their own holiday tips.

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