Have we reached tipping point?
Until relatively recently, Australians never gave gratuities, but they are becoming more common. Is it a generation thing?
If you are an American in America, there is no discussion. Tipping is a way of life and an important part of the economy.
If somebody performs a service for you, from opening a door to waiting on you at a restaurant, they expect you to tip, and you will automatically oblige.
The going rate in the United States is about 20% of the bill in a restaurant or taxi, and at the very least, a bunch of dollar bills for a random nicety.
But tipping is not a universal thing. In some places it is not only not expected, it is actively discouraged. Why? Because it gives employers an excuse to pay their staff wages below the poverty line.
Many of us want to give tips as a reward for good service. But then there’s a problem: we don’t know where the tips go.
We might think we are rewarding an individual for exceptional service, but the establishment might have a policy of putting tips into a pool, meaning the money is shared among all staff, including those with whom the customer has had no contact.
If you tip in those circumstances, you are also rewarding the staff member who was rude to you, or the one who wasn’t even working on the night you were there.
Some places have a formula for sharing the tip, with managers getting more than floor staff. So, the person who is already on a higher wage, with whom you might have had no contact at all, gets more of your money than the person who gave you great service.
In some places, tips are pooled and used to pay off extraneous expenses – for example, the bills of customers who flee without paying, or breakages – before being distributed to staff.
Despite all this, it’s very hard to avoid tipping in the US and other countries where it is commonplace. You will certainly feel obliged to do it and, in extreme cases, you may feel intimidated into doing it.
There are several places online that can offer advice about tipping while travelling, including this list from the BBC. But what about here in Australia?
Some people are adamant that we shouldn’t, on the grounds that service staff are paid by their employer and that if the practice becomes commonplace it will be met with a reduction in their wages, effectively putting them at the mercy of their customers.
Others argue that wages in hospitality tend to be low and that somebody who goes “above and beyond” deserves a little extra.
It’s possible that younger people, who are more in touch with American culture and perhaps have themselves struggled on low wages, are more open to tipping, while older Australians refuse to do it on the grounds that it’s not part of our tradition.
If we accept that tipping is OK in some circumstances, where do we draw the line?
Who gets tipped and who doesn’t? In the absence of an established practice, I guess that’s up to you.
This article and any links provided are for general information only and should not be taken as constituting professional advice. National Seniors is not a financial advisor. You should consider seeking independent legal, financial, taxation or other advice to check how any information provided relates to your unique circumstances.
