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If You're Not Tipping, You're Not Paying Attention

Service workers rely on tips for their livelihoods.

Hand adding cash to a tip jar
Robert Rodriguez/CNET, EasyBuy4u/Getty

This story is part of So Money, an online community dedicated to financial empowerment and advice, led by CNET Editor at Large and So Money podcast host Farnoosh Torabi.

As I waited to pick up my meal at a local Italian eatery the other night, I knew I'd be leaving a generous tip.  

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Behind the kitchen curtain, I watched a small team of female chefs, mostly around my mother's age, speed-roll gnocchi by hand and diligently fulfill multiple orders. In the dining room, three fast-paced servers managed a dozen tables and also tended to takeout customers. There were no bussers. No host. No bartender. This was a lean staff working much harder than I had all day.

So I left a 30% tip. 

A tip is no longer just gratuity for a job well done, it's become a central part of the overall cost. The guidance in the US is to offer 15% to 20% of the price of service to your barista, server, hairdresser or rideshare driver.  

Across the country, the pandemic cast a spotlight on essential workers in the food and delivery industries, who were facing increased risk and hardship. But now, with such high inflation and widespread job insecurity, tipping for those workers has gotten worse than pre-COVID days. My take is that if we're going to continue taking advantage of convenient services -- and the worker providing that service is making low wages, and without access to health insurance or retirement benefits --  we should tip well. 

"Whether service is administered casually at the counter or formally at the table, the almighty tip still stands as the critical source of income for service workers," Adam Reiner wrote in Bon Appetit earlier this year. Some of these tipped workers earn the federal subminimum wage of $2.13 an hour, meaning they're entirely reliant on tips for their livelihoods, and the vast majority of them are women, Black people and Latinos. 

How did we end up with such a deeply flawed tipping system that hundreds of millions of American service workers rely on today? As many historians have pointed out, it's tied to the legacy of slavery. After the Civil War, employers in the restaurant and hospitality industries hired newly emancipated Black workers but refused to pay them a wage, exploiting them and making them dependent on tips from patrons. As author Michelle Alexander pointed out in the New York Times last year, "The subminimum wage for tipped workers isn't simply born of racial injustice; it continues to perpetuate both race and gender inequity today."

Is it our "responsibility" to tip well? No. The government and employers should ensure workers get paid a livable wage. But in the absence of a systemic overhaul where workers, regardless of industry, earn a decent living and tips no longer function as a lifeline, it's the right thing to do. My friend Dustin, a part-time server in West Hollywood, estimates that if he received an extra 5% in tips each night, it would meaningfully help him afford necessities. "It's rent," he said.  

"I tip out approximately 30% to 40% of my tips to support hosts, food runners, bussers and drink makers," Dustin said. "When the tip is less than 20%, we definitely feel it."

With the expansion of the "convenience" economy, and our ability to get pretty much anything delivered, we have more occasions to tip. But what's the protocol for things like takeout meals? What if there's no tip jar?

I recently sat down with Barbara Sloan, author of a new book called Tipped: The Life-Changing Guide to Financial Freedom for Waitresses, Bartenders, Strippers and All Other Service Industry Professionals. On my So Money podcast, we discussed her two-decade career in the service industry and her current coaching practice, where she offers insights to service workers on how to achieve financial freedom. And… we discussed tipping protocol. 

Tips for tipping in today's world

It's impossible to create a one-size-fits-all standard for tipping. When in doubt, try falling back on the following rules of thumb:

Make 20% the new normal

While a 15% tip is fair, it's increasingly customary to give 20%, especially in higher-cost-of-living cities like New York and San Francisco. For good service, spring for more if you can.

If there's bad service, talk it out. If your meal arrives late and cold, it may not be your server's fault. Restaurants are struggling with short-staffing right now. So a friendly conversation to discuss the issue can sometimes lend itself to a fair resolution. You may get a discount, an item taken off the bill or a gift card toward your next visit. If the business makes an effort to correct the situation, a 20% tip is still warranted. 

For takeout and deliveries, factor in the time

If I drive to pick up dinner from a restaurant, I won't leave a 20% tip, but if there's a tip jar, I'll drop $5 as a thank-you for preparing my meal. It's not mandatory -- just a nice thing to do. And for large grocery and meal deliveries, I tip at least $10, factoring in the driver's fuel costs and time.

Tip on tax

Admittedly, I've been tipping on top of tax for… ever. But as I've come to learn from etiquette experts, you can tip on the pre-tax total. Still, if you can afford it -- and the service was pleasant -- it's a kind gesture. If we all did this, it could go a long way in supporting workers who don't have access to medical benefits and paid leave.

Service over product

Tip on service, not on products. While payment screens may prompt you to leave a tip at checkout, Sloan recommended that we base our gratuity on what we're buying.

"If you're getting a packaged coffee or a packaged food item, and you're going to the counter, you don't need to tip," Sloan said. "However, if somebody carefully and creatively creates a beverage with a foam cat face on top of your latte, and they make you smile, and it feels good, then I would encourage you to tip generously." 

Enjoy it

Last but not least, tipping should feel satisfying. Upon checking into a hotel room recently, I saw that the housekeeper had left me a box of chocolates and a handwritten note. To pay the good feelings forward, I left her $20 for my one-night stay, more than I normally would. And when I remembered how the hotel cleaning staff is often underpaid and overworked, tipping generously was a no-brainer. 

"You're getting to participate in their livelihood," Sloan said. "That should be something that feels good for you as a patron and as a human to be doing." 

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