Tipping – When, Why and How Much?

No one wants to look like a cheapskate. Perhaps that is the reason tip inflation seems to be getting out of control. I thought I was a decent tipper until I saw a tourist tipping a bellman at the Bellagio $40 for putting two suitcases in her car. I have felt inadequate ever since.

“To insure proptitude” – Where did the custom of Tipping originate?

Surprisingly, the custom of tipping originated in Europe. Tipping may have originated in the bars of 17th century England, where drinkers would slide a little extra money to the bartender “to insure promptitude” or TIP for short. Wealthy Americans traveling in Europe a couple of hundred years ago witnessed tipping and decided to show off by bringing the aristocratic custom back to the United States. All Americans were not on-board with the practice at first. In fact, many thought that it highlighted the difference in classes and went against the country’s ideals. There was a movement brewing to ban tipping because it created an aristocratic class in a country that fought hard to eliminate class distinctions according to an article that appeared in The New York Times in 1897. In 1915, six state legislators tried and failed to pass an anti-tipping bill that would have made gratuities unlawful.

TIP inflation: Is it getting out of control?

Fast forward a hundred years and we tip just about everyone regardless of the quality of the service, except Uber drivers for some strange reason (full disclosure, I tip them too). I usually tip 20%, which I thought was generous. Turns out it is just about average. According to an article in the Wall Street Journal in 2008, the most common tip left for a restaurant server in 1950 was 10% of the bill. By the 1970s and 1980s, it had risen to 15%. Now the average is 18-20% and a Huffington Post article suggested that the standard tip will be 25% in a few years.

The psychology behind tipping:

I was a little skeptical that the reason we tip these days is “to insure promptitude.” I think the explanation of Cornell professor of consumer behavior and marketing Michael Lynn makes a lot more sense. Professor Lynn has studied tipping and written over 40 papers on the topic. He says we tip so that people (e.g., waiters, hairdressers, etc.) will like us.

All those tips add up. Americans tip about $42 billion a year, but there is little agreement on how much to tip and to whom. If you have a few minutes to kill, here are a few tipping guides for your perusal: