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August 06, 2021

Which is preferable? Tipping by percentage or a flat rate?

While some people view tipping as an enforced wage subsidy, others see it as a reward for good service.

Either way, it's time to modify your approach, suggests Slate writer Brian Palmer, who feels the current practice is bad for both workers and consumers. And the factors that correlate most strongly to tip size have virtually nothing to do with the quality of service anyway, he maintains.

Credit card tips are larger than cash tips. Large parties with sizable bills leave disproportionately small tips. Plus, we tip servers more if they tell us their names or touch us on the arm

Instead, he suggests, tip a flat amount and announce your new tipping practice to your server as soon as you sit down.

"Virtually every other employee in America knows how much they’ll be paid up front, and somehow the man who sells me shoes and the woman who does my dry cleaning still manage to provide adequate service. I have no doubt waiters and waitresses are the same."

Is he on to something?

So is it flat pricing or a percentage? And, if so, how much? Toronto etiquette coach Lisa Wright offers the following suggestions, as does the Emily Post Institute and the Tipping Page when it comes to percentages. But you'll have to decide your own absolute dollar range. 

Restaurant servers: 15%, or up to 20% if it’s a business-related meal.

Hair stylist: 10% to 15%, unless it’s the salon owner.

Hotel staff: $2 to $3 a day for housekeeping; $5-10 for tickets or restaurant reservations from a concierge.

Taxi driver: 10% to 15% – if they handle your bags, add another $1 a bag.

Food delivery: 10-15% of the bill or as much as $5, depending on the size of the order and difficulty of delivery.

Take out or coffee: No tip required. Tip jar or not, it's completely optional.

Flat amount or percentage, do you feel you're a decent tipper? Or do you often hold back on philosophical grounds?

By Gordon Powers, MSN Money

Got a question about investing, saving or retirement? Send Gordon an email and we might answer your question in a future column.



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...