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Should the Current Economy Affect How Much You Tip?

by Ryan Guina

Yesterday I wrote an article about how to determine how much you should tip . In the comments, one of the readers, Katie, mentioned that tips are getting worse due to the rising costs of gas and other expenses. As the economy continues to slow and prices continue to rise, people need to find a way to cut back expenses. Since tips are something you generally have control over, you can easily cut down on your expenses by reducing your tip. But that has a direct affect on the livelihood of the person providing a service to you.

My question is this: Is it ethical to reduce the amount you leave just to save a few bucks? Or should we leave the same amount, or even more?

I am of the opinion that if you can afford to leave a little extra, you should. What do you think?

Reader Poll: Should the Current Economy Affect How Much You Tip?

  • No. Tip the same as always. (71%, 162 Votes)
  • Yes. People should tip more. (12%, 27 Votes)
  • Yes. Great excuse to save a few bucks. (11%, 26 Votes)
  • Tips? I don’t leave no stinkin’ tips! ;-) (6%, 13 Votes)

Total Voters: 228 (poll has ended – thanks for participating!)


Published or updated April 7, 2011.
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{ 21 comments… read them below or add one }

1 FFB

Let’s turn this around a bit and ask: In this economy should service be even better to warrant a tip? I’m all for leaving a tip when it’s deserved (and I will usually leave one when even when it’s not) but it seems that a lot of places don’t do as much for a tip anymore. We have a favorite diner where the wait staff is great and they remember us and treat us well. They always get great tips. Other places do the bare minimum. Some stores have tip jars out but they don’t really go above and beyond to deserve a tip. If there’s a tip jar at Dunkin Donuts or Starbucks does the staff automatically deserve a tip?

I can’t say I tip less because of the economy; it’s more because of the service.

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2 Eric

My tips start out at 20% and go from there. Exceptional service warrents 25%, regular service get’s 20%, horrible service gets between 15 and 18%.

My wife used to be in the food industry as was I before going into the military. I know how little most people leave and how hard the job is. It’s sad when people get stiffed on tips because their hourly wage doesn’t even get them a half gallon of gas in my states.

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3 Blaine Moore

I’m not a huge fan of the the “required” tipping in this country. I think that a better system would be to pay people what they are worth and leave it as a completely voluntary action for exceptional service on the part of the customer.

But, that’s not the way that it is in the US, so I reduce the amount I spend on tips by reducing the number of times that I am in a situation to tip, as opposed to to reducing the tips themselves.

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4 Katie

What warrants exceptional service? Everyone has a different definition of what that means. Each customer is different. I have one customer who thinks exceptional service is telling him “Hi! Want a Budweiser?” and then leaving him alone. When he wants another beer, he puts his empty beer bottle on my side of the bar. I then have approximately one minute to produce another beer if I want a tip. If I talk to him other than that, no tip.

I have other customers who expect me to talk to them the entire night they are there… even if 100 other people are there. If I don’t talk to them all night, they exclaim that they had poor service, even though I make sure they have drinks if they are sitting at the bar.

If you are a regular customer and the entire waitstaff knows who you are and how you like to be served, it becomes easier for the staff to take care of you. But if you go someone once in a bluemoon or its your first time, how can anyone expect their definition of exceptional service to be met?

As long as your waitstaff smiles, has a pleasant attitude, and doesn’t ignore your food or drink orders, that should be enough to warrant a tip.

I know it make me sound selfish, but if I am not going to make any money, I would rather there be no one in the bar. At least that way I don’t have to stay there an hour after the bar closes cleaning up after messy people who didn’t feel compelled to tip…. an hour that my boss DOES NOT PAY ME FOR I might add. But a clean bar is part of the service offered that a customer doesn’t think of.

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5 Kristen

I answered tip more, but I would like to add the caveat that the “tip more” is for good service. Regular tip for regular service still applies.

I do not believe in lowering your tip because of the economy. My thought is that if you cannot afford the appropriate tip, you should not go to restaurants or establishments where a tip is customary. It’s rude to say, “I have less money because of the economy, but I’m still going to have my nice dinner and glass of wine. But sorry server, I don’t have enough to leave you the proper tip.” Stay home if you can’t afford the tip.

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6 Eden

If you can’t afford to leave a tip, you shouldn’t be eating out in the first place.

I like to leave generous tips because I know I’m doing a lot better financially than the person serving me (in general that should be true).

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7 Nicole J.

I think about it this way…should your salary go down because of the bad economy? You wouldn’t like it if your boss said, “Thanks for all your work and service today, but we aren’t going to pay for that last hour.”

And I agree, you know that the tip is a part of going out to eat, so if you can’t afford to tip, then stay home or order take out.

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8 looby

My tips are not going down, but they are not going up either. My boss hasn’t wandered by offering me a raise because grocery prices have gone up.
On the other hand, I only eat out every 4 or 5 weeks and usually tip 20+% because the servers in my favourite restaurant are usually very on top of things.
Also I consider it a little different here because wait staff have to get at least minimum wage.

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9 deepali

I figure since tips are based on service, I’ll tip more if service is better (or if I’m being a pain). At some of my favorite places, I’ll tip more just because.

But I’ll confess, rising X prices hasn’t really affected me very much, so it wouldn’t occur to me to tip more because of that.

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10 Curious Cat Investing Blog

I think you are right that if you are in the same position giving more could be nice. But if you are in worse position (and a significant number of people may be) then giving less is ethical. If you give the bare minimum then going lower might be unfair. But you may well give a bit extra while you are doing well. If you are giving extra while you are doing well, I see nothing wrong with reducing that extra when you are not doing well.

Still many people have not have not had huge change on their cash flow and for them it is not really that sensible to change your practices.

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11 Mrs. Micah

Like Eden, I subscribe to the “if you can’t afford to tip, you can’t afford to eat there.” I lived with a waitress long enough to realize how little she earned without the tips, so I tend to give generously unless the server is outright rude. More for better, of course, up to whatever I’ve budgeted. My budget just includes the tip!

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12 john l.

I tip based on how good the service was.Most of the time 20%. I know how hard it is in the service profession. What ticks me off is if I paid $15 for a 12 ounce steak before and now Iam paying $15 for an 8 ounce steak.

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13 Katie

I think the thinking that if you are in a worse position, than giving less is ethical is off base. But that could just be me…

I understand that sometimes someone can not be a “Big” tipper.

But if you have the money to go out drinking, you certainly should tip your bartenders/waitresses.

Even before I was in tip based employment (I am prior service Army) I always tipped. If I went out drinking, I brought a certain amount of money out with me. I tipped everytime I bought a drink. Once I was out of money, I was out of money. I didn’t skimp on the tip so I could have one or two more drinks that I certainly did not need by the end of the night, and never really needed in the first place.

As far as restuarants go, if you do not have 15-20% to tip on the bill (Which, for an average restaurant could be what? $5-$15? Unless you are in a large group and then gratituity is added automatically anyway) You probably shouldn’t be going out to eat. At least at a bar there is movement in the crowd and just because someone who is not tipping is sitting at the bar doesn’t mean that I am not serving other people who do tip that aren’t sitting at the bar. In a restaurant, if you are not tipping, you are occupying a table that someone else who would tip could be sitting. Since restaurant waitstaff usually have assigned tables, and not very many of them at that, every table that is occupied counts.

Not to mention that at many restaurants, waitstaff have to pay taxes on their tips each night. So, even if you do not tip, they still have to pay taxes on 15% of the total amount they served. So, if you don’t tip at least 15%, they are LOSING money. Then take into account that they have to tip out restaurant bartenders, busers, hostesses, etc, even if YOU DO NOT TIP. The tip outs are based on 15% of their total sales.

Of course, these are things that people not in the industry don’t necessarily know or really even think about. I don’t think that everyone who doesn’t tip is heartless. Some of them actually think that you make a decent base wage. I don’t know how they could miss the fact that based on our minimum wage laws, people earning tips only have to be paid $2.13 an hour.

When I point this out to people I know in everyday conversation, some of them say, “Well, then you should get a job that doesn’t count on tips.” I think that is about as uncompassionate as a person can get.

I am sorry if I seem to be “ranting” on the subject. I just believe from what I hear and read from other people on this subject that most do not understand all that goes into the tipping aspect of these jobs.

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14 Ryan

Katie,

I don’t think it is ranting. I think a lot of people simply don’t think about it, and don’t understand how tips are calculated, taxed, etc. Thanks for sharing your side.

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15 Laura

We went out twice last week and tipped almost 30% and over 20% respectively. The quality of service was different, so we tipped accordingly.

We also noticed that food was a bit more this time, so in a way a higher tip was built in.

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16 Nancy

I think most here are in concensus regarding not tipping less. A person is pretty low to tip less just because he/she paid more for gas to get there and the food might be priced a little higher or the portions smaller (God knows we don’t need the super size portions most restaurants serve). I used to be a waitress plus I worked on ships where some of the crew were paid $45/month and relied on tips. Tell me giving a decent tip isn’t the ethical thing to do. If you are seated at a restuarant and see that the prices are higher and you might not have enough to order what you decided on, switch to a lower priced entree. You still have the enjoyment of dining out and aren’t stiffing the wait staff.

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17 HisHersMoney

I believe that the tip amount should not change. If you can not afford a fair tip (assuming fair service) than ou really can not afford to eat out.

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18 Oliver

In the same way that I consider tax to be part of the price of an item, I also consider a 15% tip to be part of the price of a meal. Of course, I may still go up (or down) from this number if the service was particularly good (or bad).

So in the same way that I would add tax to the price tag of an LCD TV and THEN decide whether I can afford it, I add tax AND tip to the price of an item of a menu and then decide if I want to pay that price.

It makes no sense to me that someone will say, “Gas is so expensive/The economy is down/etc/whatever, so I tip less now.” If the price of the food plus tax and tip is too high for you, then DON’T eat out at that restaurant in the first place.

Of course, the 15% number only makes sense in North America. Tip appropriately to where you are.

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19 September 11 inside job

I don’t have to tip if I don’t want to. Good service? You got it. Bad Service? Maybe next time pal. Either way, I’ll tip if I want to and the economical status of my well being will dictate my behavior toward tips. Call me names, insult my intelligence but personal remarks shouldn’t influence what I think. Look at it from my perspective. First, consider that the restaurant joint is lucky enough to even have customers eat at the place in this gloomy economy where restaurants should be going bust. The customers must already pay a premium amount for food that could be cooked at home and not to mention the nationwide sales tax increase (9.25% now in CA) and then the hefty tip itself (almost like a 2nd tax itself). Don’t forget, no matter what the biased laws of courtesy may say about mandatory tipping, the tip should always be done by choice of the customer. It always has been but lately something is wrong. Remember the last century when it was not required to tip? Nowadays people make it seem as though not tipping would imply rudeness, cheapness, disrespect and although it may seem so to the robotic crowd, tipping is still a freedom of choice. In this depressing economy along with the Federal Income Tax sucking me dry, I don’t feel like tipping. Plus I have student loans to repay, my wallet is light, and Obama’s Health Care Plan will soon force me to buy health insurance or be fined for failure to comply. I’m poor but I can still afford a meal at a restaurant. If I’m in a jolly mood, I tip. If not, maybe next time. Don’t harass me on my way out the door because I indirectly pay for the restaurant’s livelihood. No customer, no business. Simple. And speaking of simplicity, we have forgotten this basic freedom behavior of the consumer to tip or not and as a result, automatically accept the 15%, 18% or 21% tip as though it was a requirement. We resort to the calculators and the how-to-tip charts to govern our decision and on how much to tip at a restaurant. It’s plain business psychology and we feel better and more content after tipping. Well I’m here to break the status quo! Your lucky to have me walk through your door. I had to open it myself too. The economy is in shambles and I’m in a bad mood. I don’t tip. Go cry to the next customer.

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20 Cortney

You are part of the reason that I am having trouble paying my bills. The national minimum wage for servers is $4.80 and yes we get taxed on your sale, it doesn’t matter if you agree with it or not, tip is required as part of the service. You are ignorant and seem to enjoy making up your own rules, if I decided to go out and shoot someone could I use the defense that I just felt like it and it’s a free country? Moron, one hand washes the other, if the restaurants go “bust” then where will you go to sit on your lazy *ss and be served your meal? Oh, you might have to shop and cook it yourself. Karma is a b*tch and I just keep telling myself that in some way at some point or another this will come back to you or someone you love……and everyone else like you.

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21 Nancy

I find it unsettling that so many people in our society today feel so entitled. Tiping is not required. It is given for service received. Maybe you need to work on your financial habits if you have trouble paying your bills instead of blaming other people. Part of being an adult is taking responsibility for your own actions. If the service is good (or even adequate), the wait staff deserve to be tipped. I’ve been there, done that. I always received good tips, but I worked to get them. Maybe you need to check out your service and attitude if you aren’t receiving tips. As I said before, if you can’t afford to tip, then you need to choose somewhere else a little less expensive to eat. Many of us are not eating out as often, because we are trying to control our expenses. You make it sound as if cooking your own meal is a bad thing. It isn’t. You speak of karma. If you believe that, then you might receive some that you don’t really want.

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