Spending and Saving

Tips for Holiday Tipping

recession is a great excuse for cutting back on your spending—be it the amount you pay for a pair of shoes or the number of nights you’ll go out to expensive dinners each week. But try blaming the recession for your slimmer-than-usual tips. People are generally okay when others spend less on themselves, but they’re less forgiving when it comes to penny-pinching on gratuities—especially during the holiday season.

Not that they’re not cutting back on tipping themselves. A recent report released by PayScale found that hourly gratuities dropped an average of 5 percent in 2009 from the year before. Meanwhile, other surveys have shown that up to 26 percent of Americans plan on spending less on holiday tips this year. Only 6 percent plan on spending more.

There really isn’t a right or wrong when it comes to tipping. But to help you stay on the good side of your doorman (or postal worker, or hairstylist, or housekeeper) this season, we’ve put together a few do’s and don’ts when it comes to tipping during a downturn.

Do: Plan ahead. If your doorman hasn’t cut back on his services, then you should try at all costs not to cut back on your annual gift — especially if you are part of the lucky group of people who still has a job. If that means planning ahead and putting some money aside, so be it.

Don’t: Give nothing at all. Surveys have shown that fewer people gave holiday tips to their newspaper carriers, barbers, and garbage collectors during the beginning of the recession in 2008 than in years past. You don’t have to give as much as you used to, but you should still acknowledge their services somehow.

Do: Give a gift in lieu of cash. If you have developed a friendship or personal relationship with your hairdresser or trainer, it’s perfectly acceptable to deliver a gift instead of cash—especially during a recession. Postal workers are not allowed to accept any cash or gifts with a value of over $20, though, so keep that in mind.

Don’t: Avoid the situation. If you can’t afford to give out your normal holiday bonus this year because of a job loss or other financial trouble, that’s fine. Just explain yourself to those who may be getting a tip that’s lower than expected. Otherwise, they may think the smaller-than-usual (or nonexistent) gift is the result of something they did wrong.

Do: Show your appreciation in other ways. Just because you have cut back on the number of people you’ll be tipping this year doesn’t mean you can’t still say thank you to everyone. Send a holiday card, make a phone call, or reach out in person to let them know how much you appreciate the job they have been doing.

Don’t: Be inconsistent. If you’re telling your housekeeper or gardener that you won’t be giving out tips this year, then don’t plan on going all out for Christmas, either. Failing to dole out tips and then spending excessive amounts on gifts for your family and friends is simply just rude, recession or not.

Do: Be ready to make adjustments in the future. Just because these new standards of tipping are here right now, doesn’t mean they’ll last forever. When the economy eventually recovers, the amount you’ll be expected to tip will most likely increase again, so be prepared.

Tags: holiday, spending money, tips