Americans have reached their tipping point as gratuities spiral ‘out of control' — where Dave Ramsey draws a firm line

Yahoo

3 days ago

Tipping has become ubiquitous, but many Americans are burning out.
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According to a recent survey by WalletHub, nearly nine in 10 believe tipping culture has 'gotten out of control,' and 83% think automatic service charges should be banned. Nearly 3 in 5 Americans think businesses are replacing employee salaries with customer tips.
On a recent episode of The Ramsey Show, hosts Dave Ramsey and Jade Warshaw attempted to answer the question: When is it actually appropriate to leave a tip?
When should you tip?
Warshaw advised to always tip in restaurants. 'Where you're sitting down, you're placing an order, there's somebody attending to your table … tip between 18 to 20%," she asserted. "I feel like if you can't afford to leave a nice tip, you can't go."
Ramsey agreed, saying staff are working for tips and often aren't paid well otherwise.
For close-contact services like haircuts or nails, Warshaw recommends starting around 15%. But for quick barista service or grocery delivery? She says it depends on how great the service was, if she knows the person or if they went through a tough time to serve her, like delivering items in the rain.
"For me, tipping falls in the bucket with generosity, so I overdo it," Ramsey admitted, even if the food wasn't that good. "Here's the thing: The kitchen might have screwed up, not the poor waitress."
He typically wants to tip, and leaves $20 on his bed for the maid every day he stays at a hotel, but clarified, "The times that I walk up to the counter and someone spins an iPad at me and I leave a tip [are] precisely zero. I do not tip there, ever." Ramsey feels no guilt about this practice he calls a "manipulation at checkout … it's nickel-and-diming you to death.'
All in all, the pair lean towards tipping and showing empathy for service workers and what they must deal with at the workplace — a sentiment not entirely reflected in the average American's view.
Tipping fatigue
Driven by inflation, menu price hikes and pressure to tip on basic transactions, tipping expectations are probably fueling exhaustion, resentment, and blown budgets among consumers.
The same WalletHub survey found some telling information: almost 60% of Americans feel businesses are using tips to replace employee salaries, while close to 30% end up tipping less when prompted with a tip suggestion screen.
What's more, 40% believe an instant employee rating system, which businesses can use to determine staff wages, should replace tipping.
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People are possibly feeling confused and overwhelmed by the higher number of situations for which they're expected to tip, including in quick-serve food establishments and rideshares or taxis.
In fact, one-third (33%) of U.S. adults say the frequency or amount they're expected to tip has increased in the last five years, according to a Morning Consult survey.
Regardless of consumer sentiment around tipping, the service industry still depends on it, since for many people, tips are essential to their income and will remain so unless their wages increase.
Tips without budget stress
Want to show gratitude without breaking the bank? Consider these budget-friendly ideas:
Cash-only tip jar: Keep a small bill, like $1 or $2, for cash-only gratuities at coffee shops or convenience stores.
Daily tracking: Add a 'tips' category to your monthly budget, so you can splurge or skip deliberately.
Service-based tipping: Only tip at sit-down restaurants, delivery orders, valet and services like nail or hair — no need at counters.
Modest weekly tip budget: For frequent routine services (e.g. your daily barista) to cap your spending.
Evaluate, prioritize and trade off: For example, you might prefer splurging on a nice dinner out with friends each month to your convenient, weekly quick-service lunch.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.