4 Questions To Ask Before You Add a Tip
Modern tipping culture has taken the presumption of gratuity from sit-down restaurants to just about everywhere a cash register is present — no, thank you, I don’t wish to leave a 25% tip at an airport shop self-checkout screen.
If you tipped everywhere someone asked you to, there wouldn’t be money left for anything else. So before you dig deep and give a little extra, ask yourself the following four questions to ensure your generosity is justified.
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Is a Tip Already Included on the Bill?
According to Food & Wine, more restaurants are using auto-gratuity as a kind of insurance policy for servers, particularly for large parties or pricey tabs. It’s perfectly legal and per WebstaurantStore, while some states require restaurants to inform customers about auto-gratuity on the menu and/or the server to tell customers verbally that a tip — typically 18% — is included in the price of dinner, most don’t.
Auto-gratuity will always appear on the itemized bill, but the publication noted that it’s easy to miss and that many customers accidentally double-tip after giving the bill a cursory glance or not looking at all.
Does the Service Charge Go to the Staff or the Restaurant?
Many restaurants and bars are adding service charges to keep pace with inflation, soaring labor costs, and rising state-level minimum wages. According to Service Charge Facts, federal law protects tips as income paid directly to restaurant employees by customers and prohibits owners and managers from keeping any portion of them.
However, service charges — including but not limited to auto-gratuities — are not protected by law. They’re handled by the restaurant, which decides independently whether to pass some or all of them on to the staff. Many hospitality worker advocates oppose service charges because many people mistake them for automatic gratuities and withhold a tip. If you see a service charge, ask who keeps it before you start calculating 20%.
Does the Employee Live on Tips?
Most employees will gladly accept tips when offered, but others depend on them to live. The Fair Labor Standards Act gives employers of tipped workers a $5.12 maximum credit against the already unlivable $7.25 federal minimum wage, meaning they have to pay tipped employees just $2.13 an hour, known as the minimum cash wage.
Many states have higher minimum cash wages and some require all employers to pay the state’s full minimum wage, whether or not the employee earns tips, creating an enormous location-based discrepancy.
For example, tipped servers and bartenders in California earn at least $16.90 per hour before tips. In much of the South and Midwest, they get just $2.13 for doing the same job in the same 60 minutes.
Would You Tip If You Hadn’t Been Prompted?
Unless the service is exceptionally poor, it’s standard tipping etiquette to give something extra when going out to eat or drink or when having food delivered. Certain service professionals, including barbers and stylists, valet parkers and taxi and ride-hailing drivers, also make the cut.
However, Cheapism noted something that anyone who has been out of the house in the last few years knows without being told: tip jars and tablet-based gratuity prompts are everywhere — often suggesting outrageous tips — from counter-service coffee to mall kiosks selling sunglasses.
If you’re not receiving a service in the small basket of traditionally tipped trades, ask one question to make the right decision — would you have tipped if you didn’t feel pressured to do so? If not, the shame is theirs, not yours.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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