TIME gratuity

And America’s Best Tippers Live In…

Dollars and cents
Finnbarr Webster / Alamy

Data from the mobile payments company Square reveal some huge regional differences in the generosity of customers

This post is in partnership with Fortune, which offers the latest business and finance news. Read the article below originally published at Fortune.com.

By Miguel Helft


New Yorkers are stingy with their cabbies (though not quite as stingy as their neighbors in New Jersey). Indeed, New Yorkers are among the worst tippers in the country in a number of categories — but not when it comes to personal hygiene. For some reason, a visit to the barber or stylist inspires generosity in the Empire State. Folks in Seattle and Portland reserve that same kind of giving spirit, no surprise, for their baristas, and Floridians and Texas extend it to their bartenders.

The observations derive from tipping data collected for FORTUNE by Square, the San Francisco-based mobile payments company, whose smartphone and tablet credit card readers have become a feature of thousands of small businesses across the country.

Interestingly, some tipping trends are fairly uniform across the country. Beauty and personal care professionals tend to receive the biggest tips — on average closer to 20% than to 15%. Taxis and limousines skew lower, with average tips below 16% in many states. Tips at restaurant bars show the most variability, with New York fast-food joints receiving an average of 14.77% and bars and lounges in Texas getting 19.66%.

For the full list, please go to Fortune.com.


Tips Add up for Many Workers

’Tis the season for tipping. Maybe you tip because you genuinely appreciate good service when you get it. Or maybe you tip because you’re afraid if you don’t, your newspaper will end up on the neighbor’s lawn every morning or you’ll be the last one served at your favorite bar.

But however you feel about holiday-season gratuities, tipping is a serious business for most people on the receiving end: Gratuities make up a significant part of their annual income. And new data from salary experts PayScale sheds light on just how big of a deal a tip is for people in service occupations.

Casino dealers — talented in helping us lose our money — earn more than 50% of their income from tips, as do waitresses and bartenders. The people we ask to make us look better — makeup artists, hairdressers, and nail-salon employees — get nearly one-quarter of their income from tips. And if you’re throwing a party during the holidays, note that caterers, food servers and parking attendants get more than 20% of their income from tips.

Who among recipients is least dependent on tipping income? According to PayScale, night club managers, hotel executive chefs and hotel front desk managers get less than 10% of their income from tips.

The past few years have been tough on workers who earn gratuities. Last year, PayScale reported a 5% drop in the average hourly tips across service jobs; this year, tipping hasn’t recovered from that dip. (In a separate survey, Rent.com found that 61% of apartment-dwelling tenants aren’t planning to tip their building staff this year — bad news for doormen, who PayScale.com says get 14% of their income from tips.)

So, in these still shaky economic times, if you’re thinking of cutting back on your tipping generosity, just keep in mind that it can have a bigger impact than you might think.

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More Money Friday Roundup: ETF Hazards & When Not to Tip

Personal finance from around the Web:

  • Exchange-traded funds are all the rage these days, but are they right for you? Here’s a primer on perks and pitfalls of ETFs. [USA Today]
  • If your teenager is more worried about the latest Twilight movie than her latest bank statement, she might need some credit guidance. Here are some tips to help your teen become credit savvy before the balances accumulate. [Wise Bread]

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Stiffing the Waiter for Rotten Service


Question: When a friend and I had dinner at a nice restaurant recently, the food was good but the service was terrible. The waiter got both of our orders wrong, was openly contemptuous of the wine we selected, ignored us for long stretches of time, and was horribly rude every time he did appear. I wanted to leave the guy next to nothing, but my friend insisted on tipping him close to 15 percent. Was she right, or was I?

Our answer: That’ll teach you not to decline the $75 wine your waiter recommends.

Seriously, we’re with you. There’s no excuse for the behavior you describe, and in your shoes we would have left the guy a buck – just enough to let him know we hadn’t forgotten him.

We assume your friend would argue that tipping is an obligation, not an option, and that stiffing a waiter is akin to an employer failing to pay an employee. But she’s wrong. Being in a job where tips are the norm doesn’t protect you from the economic consequences of failing to provide what customers have every right to expect. Taxi drivers who ignore their passengers’ directions and drive like maniacs don’t deserve tips. Neither do waiters who can’t bother to deliver competent and courteous service.

Given that your meal was so unpleasant, you should have spoken to the manager and insisted that your bill be reduced. But we can understand why you might not have wanted to end dinner with a confrontation. Either way, though, your friend was wrong to insist on that tip. Her well-intentioned but misguided sense of duty only encourages waiters like yours to continue to be contemptuous of their customers.

Questions? Email Money Magazine’s ethicists – authors of the upcoming book “Isn’t It Their Turn to Pick Up the Check?” (Free Press) – at FlemingandSchwarz@right-thing.net.

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