Ways to Manage Tipflation

From coffee shops to convenience stores, it seems as though just about every time you pay for something, you’re asked to leave a tip. And it’s not just a tip jar sitting on the counter. Often, a server or clerk will swivel a screen toward you, and you’ll see options to tip 20%, 25% or even 30%.

You may feel uncomfortable or even annoyed at being asked to tip, and you may resent the growing bite that tip creep is taking out of your budget.

Still, many people rely on tips for a significant part of their income, and you may want to reward people for good service. Our guide on how to handle tipflation can help you manage tip fatigue.

Tipping is a small part of your overall financial picture. For help looking at all of your expenses, your income and planning for your future, talk to Farm Bureau.

When Tipping Is Expected

As a rule of thumb, people who work in the services industry from servers to rideshare drivers, expect to be tipped and in most cases depend on tips as a significant part of their income. There are some situations where tipping is expected, and you should factor it into what you expect to pay. 

Sit-Down Restaurants

Tips may feel like rewards or gifts, but they are considered a requirement at sit-down restaurants. The federal minimum wage for tipped employees is just $2.13 per hour, although most states set higher minimums. Tips make up most of a restaurant server’s pay. Tip at least 18% of the total, and more for good service.

Be sure to check your bill when you pay in a restaurant, because some places include the tip. You can choose to tip more than that amount if you like.

If you use a coupon or deal for a discount on your meal, it’s best to tip on the total amount before the discount.

Bars

At a bar, it’s customary to tip $1 per drink for beer and wine and 18 to 20% for cocktails, since making them takes longer and requires more skill.

Delivery Drivers

A delivery driver usually doesn’t get the delivery fee you pay. So, you should tip 15 to 20% of your order cost. You should usually tip higher if your driver has to deal with a heavy order, bad weather or lots of stairs.

Salons and Spas

It’s customary and expected to tip 15 to 20% for haircuts, manicures, pedicures, facials, massages and other personal services.

Transportation

It’s common to tip limo and taxi drivers 10 to 20% of the fare. Tips start at 3–5% of the fare and go up from there for Uber, Lyft and other rideshare drivers.

When Tipping Is Optional

In some situations, tipping may be nice, but it’s not something workers count on or expect.

Counter Service

You don’t need to tip at places where you pick up your order at the counter, like fast food restaurants or to-go orders, since those workers are paid a full wage. A tip for good service is appreciated, though.

Coffee Shops

Coffee shop employees appreciate a tip of 10 to 15%, but you don’t need to tip.

Should You Tip in Cash?

Many people like cash tips since they get the money right away, but you can always ask. Some people would rather be tipped through Zelle or Venmo and have the money deposited into their account.

Financial Advice, From Tipping to Taxes to Trusts

At Farm Bureau, we know the ins and outs of financial planning. Reach out to us for professional guidance.