How Much Should You Tip During the Holidays?
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What is the main topic discussed in this episode?
This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise.
Here's your money briefing for Thursday, December 14th. I'm J.R.
Why is tipping popping up everywhere and causing fatigue?
Whelan for The Wall Street Journal. It seems almost everywhere you make a purchase, you're asked to leave a tip. Even some of those self-checkout machines want a little extra. And while some people have developed tipping fatigue, we're in the holiday season where tipping is common, if not expected.
People have a more long-term relationship with people who they're tipping for the holidays. They're often interacting with these people every day or every week. So it feels really different from being asked to tip. after one interaction, or in the case of self-checkout, no interaction at all.
How did tipping behavior change after the pandemic began?
We'll talk with Wall Street Journal reporter Rachel Wolf after the break.
This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise.
The holiday season often means tipping service workers you've interacted with throughout the year. But it also means knowing how much to tip. Wall Street Journal reporter Rachel Wolf joins me.
Are Americans tipping less now and what does the data show?
So, Rachel, starting with the initial spread of the pandemic, we saw newfound attention paid to tipping, especially to delivery and service people working while the rest of us were at home. How have feelings about tipping changed since?
People have definitely soured on the practice. They feel overwhelmed and frustrated with the fact that these prompts are popping up everywhere, especially in places that they didn't used to exist, from the dry cleaners to even self-checkout stations.
Does that mean that people have been handing out less tips?
People have been starting to tip less, especially in non-restaurant settings. As of November, service sector workers in non-restaurant leisure and hospitality jobs made 7% less in tips an hour than they did the year prior, which is a pretty significant decrease. And that's according to an analysis by a payroll provider, Gusto.
Do people plan to tip more during the holidays despite fatigue?
How much of this has to do with tipping fatigue we've heard about where people complain about being asked to tip everywhere?
It's definitely related to tipping fatigue. People feel that the limits of their generosity have been reached and they don't understand why they are continuing to have to subsidize employee wages instead of companies paying workers a living wage themselves. So definitely we're seeing more frustration both from consumers and from workers.
But now we're in the holiday season where tipping traditionally is common. Do people plan to be generous with their wallets?
It's possible that people still might not cut back tipping for the holidays. Bankrate, a financial services company, surveyed about 2,400 people, and 15% said they plan to actually leave more generous tips for workers, including housekeepers, child care workers, landscapers, mail carriers. And then about 13% said they plan to leave less. The amount that people said they would tip these workers is up from last year, but really just a return to what they tipped in 2021 inflation last year lowered the amount that people were able to spend on tips by a bit.
How much do people typically tip holiday service workers by category?
So we're seeing more of a return to that this year. And that could be because people have a more long-term relationship with people who they're tipping for the holidays. They're often interacting with these people every day or every week. So it feels really different from being asked to tip after one interaction or in the case of self-checkout, no interaction at all.
All right. So people are in the mood to be giving, but they might be afraid of not tipping enough or maybe over tipping. Is there a rule of thumb in terms of how much to give service workers like the ones that you mentioned?
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:00–0:21
2
Why is tipping popping up everywhere and causing fatigue?
0:21–0:56
3
How did tipping behavior change after the pandemic began?
0:56–1:41
4
Are Americans tipping less now and what does the data show?
1:41–2:39
5
Do people plan to tip more during the holidays despite fatigue?
2:39–3:53
6
How much do people typically tip holiday service workers by category?
3:53–5:00
7
How are businesses responding to lower tips with wages and policy changes?
5:00–7:51
Speakers
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