The only article you ever need to read about tipping

The only article you ever need to read about tipping
6 January 2021

Who should you tip, and do you need to add 10%, 15%, or 20%?

When should you not tip at all?

Is it necessary to give a tip if the bill already includes a service charge?

Which countries distinguish between a “service charge” and “tipping”?

Do you tip on the entire bill, or just on the food (excluding the liquor)? Had you even ever considered this particular option?

If you overtip in poor countries, will you ruin it for everyone who comes after you?

Tipping is a minefield of social conventions and complex socio-economic factors.

It’s an area of such complexity that entire rulebooks have been written about it. E.g., the avid traveller can purchase “Bradt’s Global Guide on Gratuity Etiquette” and look up detailed rules for 130 countries.

Who’s got time for that?

Yet, it’s an issue that we are all confronted with regularly.

It recently dawned on me that I’ve wasted precious brainpower and time whenever I wondered (or worried) about tipping. Each time you have your brain mull over something useless, you deplete the energy and productivity that you can squeeze out of your grey cells during the rest of the day. I realised that I’ve spent too many moments in life on something that I’d rather not expend any effort on.

Tipping is a minefield of social conventions and complex socio-economic factors.

Could I not cut it all down to a simple rule and belief system?

I am obsessed with optimising the shit out of myself, and tipping distracts my thoughts way too often.

That’s why I set out to investigate.

This article doesn’t just want to help you free up precious time and keep your brain’s focus, but also make you aim higher in life and feel good about it all.

How’s that possible, given the subject is something as mundane as tipping?

I, too, was surprised about my findings.

Hop on that journey with me!

A handy primer on the history of tipping

Until I set out to write this article, I didn’t know what “tip” actually stands for, nor any of its history.

Unless you know the origin of a word, you won’t fully understand a subject.

To make sure I did, I purchased every single contemporary book about tipping that I could find on the Internet.

The best one turned out to be Kerry Segrave’s 2009 opus: “Tipping: An American Social History of Gratuities”. Its title is US-centric, but its actual content covers tipping from a global perspective.

An urban myth has it that the word “tip” originated in a coffeehouse in London’s Fleet Street around the 1750s. On a table was a bowl with the words “To Insure Promptitude” printed around it. Taking the first letter of each word, the phrase was shortened to tip. Another version of the same story made it: “To Insure Prompt Service” = TIPS.

There are several competing theories, but no convincing evidence exists for any of them.

However, it is clear that the origin of tipping extends as far back as the Roman Empire. Back in the days, it would have been customary to throw a few coins at unemployed, armed soldiers sitting by the roadside. This was support and gratitude for the service they had provided to their empire, but also a form of protection money . Where gratitude ended, and highway robbery began, was difficult to say.

It’s this kind of ambivalence that has kept tipping a controversial subject up to today. Is it really a voluntary gratuity for outstanding service, or do social conventions and other factors make it a form of obligatory payment? Is it even a bribe of sorts?

This article doesn’t just want to help you free up precious time and keep your brain’s focus, but also make you aim higher in life and feel good about it all.

If you make the time to read up on the history of tipping, you’ll inevitably come across the “vails” that became customary during the Middle Ages around 1500 AD. At the time, visitors to private homes in Tudor England were expected to give sums of money (“vails”) at the end of the visit for services rendered by the host’s servants. These were initially understood to be for service that went above and beyond the call of duty. However, hard-up aristocrats soon discovered that they could use their guests’ contributions to economise on wages for their staff. In turn, the staff quickly became accustomed to the extra money and expected a handout, no matter what level of service they had delivered. It didn’t take long until some advocated that vails be made illegal.

The controversy hasn’t stopped since.

Rich Americans who visited England during the mid-19th century brought the custom back to the United States, initially as a way to show their worldliness. The custom of sprinkling change on social inferiors was seen as un-American by many, as it created a willingness to be servile in exchange for a capricious consideration. Others actively propagated it. One American railway company started a trend by asking its customers to tip the luggage porters, which (again) was a way to wiggle out of paying wages. The railway companies did a lot for turning the US into the world’s no. 1 country for tipping by spreading the custom all over the country.

Widespread as it has been in the US over the past 125 years, tipping has always divided society. The level of outrage seems to reach a crescendo every generation, usually involving efforts to either ban tipping altogether or replace it with a different form of tipping. E.g., in 1909, the state of Washington banned tipping altogether and half a dozen states followed suit. Enforcement never got into gear, and by 1926 all of the anti-tipping laws had been revoked.

New complications arose along the way, such as the question of whether to tip air stewardesses? The airline industry quickly nipped the issue in the bud, but not before a national controversy arose about the subject during the mid-1930s. These controversies regularly saw lobbying groups emerge. A famous case was the Anti Gimme League, which lobbied for the nationwide abolishing of tips in all their form.

The struggle played out in Europe, too. The 1920s saw one hotel in London threaten dismissal as a penalty for any employee willing to accept a tip. Few other establishments in London dared to venture off this trodden path. Notoriety in the media and society gossip followed suit, and the hotel ended up being so well-booked that rooms were hard to obtain.

Continental Europe pursued its path of trying to implement tipping as a fixed percentage service charge. Several hotels in Switzerland and Italy pioneered the practice around the same time, and initially wildly successful.

However, the custom of tipping proved impossible to stamp out. Case in point, even the almighty Communist Party of the Soviet Union failed at it. Izvestia, the government newspaper, ran a campaign during the 1950s to end the practice called “a survivor of capitalism” and a “pre-revolutionary custom”. When the campaign didn’t yield any results, an obligatory service charge was added to Moscow restaurants. Stalin kitted out eateries with signs: “Don’t tip. Don’t insult your fellow countrymen.” Even the iron ruler’s diktat was to no avail. During the 1960s, Newsweek reported that the custom of tipping was flourishing throughout Russia. Subsequently, the Commies quietly put the signs away.

In the 1970s and 1980s, the debate about social issues caused by tipping kicked into gear, and increased international travelling provided further fuel for controversy. Studies in the US worked out how little some tip-dependent lines of work earned per hour. At the same time, an increase in European visitors caused its own set of problems. These often spent hundreds of dollars on a meal in an expensive restaurant, only to then leave a tip of just a few dollars because they were merely used to “rounding up” the bill.

In the 1990s, the Western world was engulfed in political conflict about the taxation of tips. Another hot subject was the distribution of tips among customer-facing staff (e.g., waiters) and behind-the-scenes staff (e.g., dishwashers).

Each generation seems to yield a few people who want to take up the fight against the perceived scourge of tipping. In 2015, the acclaimed US restaurateur, Danny Meyer, launched a no-tipping initiative aimed at nothing less than “saving the hospitality industry” and “forever changing the way we dine”. If you want to do your head in with a mountain of industry details and data, you should read this 2015 article about the movement’s launch and this 2020 article about why it failed. Both are monumentally good pieces if you care about details. Nota bene, by 2018 most of the restaurants that had participated in Meyer’s movement had returned to accepting tips.

Fast-forward to 2020, and the conflict du jour about tipping involves how it may facilitate racism, sexism and all the other buzzwords commonly weaponised by the Social Justice Warrior brigade. Once again, voices are raised to demand that tips be abolished altogether.

It. Never. Stops.

Even after 500 (or maybe 2,000) years of controversy about tipping, the debate might rage on just a bit longer.

Tipping has now been in existence for at least 100 generations. Speculating that you’d be the chosen generation to finally phase it out would require a high degree of optimism and self-confidence.

It’s probably best to accommodate yourself with the existence of tipping and accept it as part of the imperfect human experience of life.

To help us best shape your tipping behaviour, let’s check which parts of our human DNA make us tip.

Filtering out the essence from the surrounding chaos

To this day, economists struggle to explain why tipping is done at the end of a meal or service. After all, you cannot retroactively improve a service. Equally, why tip at a restaurant that you are sure you will never visit again?

There are many examples of entirely irrational tipping behaviours.

For example:

  • Thomas Jefferson famously tipped his slaves; as if that was necessary to keep them working for him.
  • The Japanese are among the world’s most generous tippers, even though tipping is very much frowned upon in their home country.
  • Nearly half of Americans loathe tipping, yet it’s also the country with the most generous tipping culture in the world.

So much of it doesn’t make sense. You’d have every reason to ask why the custom of tipping has proven so resilient.

Indeed, the further you drill into the existing literature on the social norms and personal motivations that drive us to tip, the more mysterious it gets. Take these statistical findings from the restaurant industry as an example:

  • Contrary to a long-standing urban myth, there is no correlation between the percentage of the tip and the amount of alcohol ordered.
  • There is no correlation between the absolute amount of the bill and the percentage tipped.
  • There is no correlation between the percentage tipped and the observer’s rating of service quality.

It’s maddening and complicated.

However, it is, after all, possible to filter out the most useful aspects from the surrounding noise.

If you did make an effort to research the three main drivers for tipping, the scientific literature would guide you towards the following motivations:

1: Increasing your social status and recognition.

2: Reducing your guilt about income inequality in society.

3: Improving the service you get during future visits.

There is no particular order to them. Some people may pick any one of these reasons but ignore the other(s).

Each of them is equally noble or despicable, depending on your perspective. Giving a waiter a tip to support their livelihood is a noble deed in one way, but having them work for you for a wage that doesn’t pay their bills is shameful exploitation in other ways.

Here are a few conclusions and benchmarked guidelines that you should find helpful.

3 handy rules to keep your tipping simple (and your mind focussed)

After wasting quite a few night-time hours of my life reading about the subject recently, I concluded the following:

  • The only rule about tipping is that there are no reliable rules.
  • Each generation sees a new initiative to stamp out tipping – and they fail every single time.
  • It’s too complicated and deep a subject for any sane individual to ever stay on top of it.

With tipping, whatever you end up doing, it won’t be right.

Nor will it be wrong.

So you might as well just ask, what’s best for YOU?

Instead of getting lost in small details, here is what I concluded after reading through the entire contemporary literature on tipping.

Rule #1: 20% is the optimal figure

Undoubtedly, the US is the global benchmark for tipping. Estimates for the average tip given in the US vary between 15% and 20%; the most credible figure refers to 18.9%. Rounding it up to 20% makes it easy to do the sums. From now on, that’ll be my golden rule for tipping.

By sticking to these three simple guidelines, I will stop expending any worry on the question of tipping.

Another reason why I err on the side of caution is because staff who rely on tips usually have ways and means to get back at you. They may do so in ways you would never notice. E.g., in the olden days, hotel bellboys used to mark suitcases of bad tippers with chalk, thus signalling bellboys in other hotels that these guests were not worth the extra effort. I am a creature of habit and often frequent the same establishments over and over again. That reason alone would be reason enough for me to tip generously. I want to get the best table, attentive service, and a generous second biscuit by the side of my coffee.

With that in mind, 20% it is.

Rule #2: Apply the same standard everywhere (unless illegal or offensive)

The sole exceptions I make are countries where tipping is seriously frowned upon (Japan) or outright offensive (apparently, Oman and Yemen). Aside from these exceptions, I simply tip 20% everywhere else. Do I worry about ruining it for others who tip less in third world countries? Given the chaotic world of tipping, I have stopped worrying.

Rule #3: Tangible benefits in cases where percentages don’t apply

Where a percentage is difficult to work out because tipping is only done on special occasions, I base the tip on the price of a meaningful gift that I believe the recipient would appreciate. Take my cleaning lady as an example. For Easter, the summer holidays and Christmas, I give her a cash tip that is the equivalent of a voucher for a spa treatment or a dinner. You can make up similar rules for binmen, the postman, and other people who make your life better and deserve a tip.

By sticking to these three simple guidelines, I will stop expending any worry on the question of tipping.

There’s a bonus aspect for you to consider.

Giving away more money could help make you richer. How’s that for an incentive to tip generously?

Here is how it works.

A powerful motivation for becoming a generous tipper

Over the past few years, there has been a profusion of articles about saving money by cutting back on small expenses. The best-known probably involves the question of whether or not to stop buying takeaway coffees:

Obviously, cutting back on tipping (or cutting out tipping altogether) would fall under the same token.

It’d be an expensive mistake, though. Minimising tipping could easily end up wasting more in future income than you ever get to save – by a multiple.

Here is why.

Your attitude towards tipping is also a question of having the proper mental model on how to fit money into your life.

How many people do you know have gotten rich by denying themselves the joy of a takeaway coffee in the morning?

Minimising tipping could easily end up wasting more in future income than you ever get to save – by a multiple.

Exactly.

In that same vein, why do think people like Jeff Bezos, Steve Jobs or Elon Musk have achieved so much financially in such a short time?

It’s dead simple. Priorities.

These overachievers have focussed their energy on how to get more out of life. They’ve realised that the only substantial way to increase their living standard is by making a lot more money.

As a result, they’ve spent all their energy on increasing their standard of living.

Their focus becomes their challenge. A challenge to demand more of themselves and their life. Eventually, the challenge turns into a game that they enjoy pursuing every day. It becomes effortless and, for that reason, all the more effective.

On the other end of the spectrum, being incredibly, unreasonably cheap is a mindset that makes you expend energy on the small stuff.

Bezos & Co. spend every second thinking how to generate more income. The tightwad brigade spends half an hour figuring out how to save a dollar (or a euro). They’d even economise on tipping.

There is a reason why there is so much content about this extreme frugality stuff. It’s easy to sell in articles and produce clickbait headlines. However, a lot of this stuff about saving money is really ineffective. It’s, ultimately, about being penny-wise but dollar-foolish.

Focussing on how to make more money has to be front and centre of your life. It will prove a far more effective way to the quality of your life than all these cheap mental mindsets. Being unreasonably frugal will not make your rich. Saving money should be a hobby, not a priority to base your life on.

You have to make that mental switch.

Bezos & Co. spend every second thinking how to generate more income. The tightwad brigade spends half an hour figuring out how to save a dollar (or a euro). They’d even economise on tipping.

That’s where tipping comes in.

Being tight on tipping means you aren’t comfortable with your ability to generate wealth.

It’s an indicator that you are doing something wrong in your approach to money and your mindset for building wealth.

Being stuck in this mindset will hurt you on several levels. It’s also something the rest of the world will notice. A tight man is immediately recognised as a piker – a man who is seen as making small bets only and not advancing in life because he is timid when opportunities call for him to be bold.

The energy you send out into the universe determines what comes back to you. If you signal that you aren’t prepared to actively create an amazing future and instead have to rely on saving pennies, nothing major is ever going to happen in your life. It’s a self-fulfilling prophecy.

If you aren’t there yet and can’t afford to tip generously, then that’s totally okay. I am not saying any of this as iron-clad rules, but as inspiration for your future.

Ask yourself, what have you done today to change the situation? What will you do tomorrow?

In my view, being a generous tipper should be one of your goals in life.

It’ll all come back to you as a multiple, provided you apply the right mindset.

They more you give, the more will come back to you – it’s a subject I will write about again in future articles.

If you liked this article, you might also enjoy the following:

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