Why Half of Americans Will Scrimp on Tipping This Holiday Season

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The holidays are the season of giving—at least on paper.

But a new study from GOBankingRates found that more than one in three people plan to leave their trusted service providers out in the cold this season, even though they need tips now more than ever.

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The obvious culprit is the rising prices that have reduced household buying power all year long.

“Ordinarily, it’s appropriate to tip your regular service providers such as gardeners, caregivers, hairdressers, garbage collectors and the like,” said Peter Hoopis, a chartered financial consultant and CEO of Peter Hoopis Ventures. “With the current inflation and talks of an impending recession, it has become financially challenging to give holiday tips to all your regular service providers, making people decide to do away with holiday tipping.”

In 2022, Service Providers Should Expect a Lot Less Holiday Cheer

The study, which surveyed 1,025 American adults, found that roughly 36% don’t plan to tip anyone for anything extra during the holidays. Among those who will, the largest plurality plans to tip only an extra 5%, with 10% not far behind. Fewer than one in 10 will tip 15%, 20% or more.

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About one in three will tip their delivery drivers, a quarter will tip their mail carriers and fewer than 20% will tip garbage collectors or doormen.

Half won’t tip any of the above.

So, Who Reserves a Little Extra?

Inflation has made it harder for people to be generous, even if they want to. That means families have to be extra selective this year — but you don’t want to leave out someone special simply because you forgot about them in the chaos of the holiday rush.

This list should jog your memory.

Colin Palfrey, CMO of the personal finance management company Crediful, believes that people you should consider for your holiday tipping shortlist fall into two primary groups, and he offers suggested gratuities for each.

The first group consists of those who take care of your home:

  • Doorman: Up to $100; if there’s more than one, make sure they get at least $20 each

  • Gardners: Up to $50

  • Pool cleaners: The price of one cleaning

  • Handymen: Up to $50

  • Mail carriers: Up to $50

  • Garbage collectors: Around $20 — but make sure your municipality doesn’t prohibit tipping

The second group is those who look after your family:

  • Child care staff: At least $50 each

  • Nanny or au pair: An extra week’s wage

  • Babysitting: The price of one evening’s service

  • dog walker: An extra week’s wage

  • Barber or hairstylist, personal care assistant: The price of one session

Two Types of Service Providers, Two Types of Tip Structures

All of the service providers that Palfrey mentioned, and any others you might consider tipping, fall into one of two broad categories — those you pay for the services they perform and those you don’t.

It’s easy to come up with an appropriate gratuity for those in the first group.

“The amount you tip could equal your typical payment to a provider,” said Laura Adams, MBA, personal finance expert with Finder.com. “For example, if you pay your housekeeper $100 per visit, your holiday tip might be $100.”

Another strategy is to tip a multiple of the regular gratuity.

“For instance, if you regularly visit a hairstylist, doubling your last tip of the year may be an excellent way to thank them for their outstanding service,” Adams said.

The appropriate amount to tip the people you don’t pay is much more subjective.

“Even those just doing their jobs — such as teachers, garbage collectors, mail carriers or building concierges — might be worthy of a gift or tip if you believe they’re exemplary or have significantly helped you or your family throughout the year,” Adams said.

The experts agree this category is a judgment call based on how frequently you see them or use their services, how hard they work, how well they’re compensated and how much value they add to your life.

Adams said, “The amount should be appropriate for your relationship and the value you’ve received from them.”

Avoid Being a Holiday Scrooge By Planning Ahead

The best way to avoid shortchanging the service providers whose work you value is to build them into your household spending plan ahead of time.

“One way to make holiday tipping work so it doesn’t feel financially painful is to work it into your yearly expense budget,” Hoopis said. “When you draw up your budget, include a portion each month of the holiday tip you plan on giving each provider. Place these amounts you have saved in a separate account you will not touch. Before you know it, you will have saved up your service providers’ holiday tips when the holidays come.”

Methodology: GOBankingRates surveyed 1,025 Americans aged 18 and older between Oct. 17 and Oct. 21, 2022, asking 18 questions: (1) Do you plan on spending more or less on holiday shopping this year?; (2) With the current state of inflation, how much more do you expect to spend on holiday shopping this year?; (3) What is your favorite place to shop for the holidays?; (4) Do you have to change any of the following holiday traditions this year due to rising costs?; (5) Where do you do a majority of your holiday shopping?; (6) Do you plan to work in retirement?; (7) How much time do you take off from work during the holidays?; (8) How much would you typically spend on a gift for a family member?; (9) How much would you typically spend on a gift for a friend?; (10) Where have you noticed rising prices for holiday shopping/expenses this year? (Select all that apply); (11) When did you start or plan to start your holiday shopping this year?; (12) As the holiday season approaches, which of the following applies to you?; (13) How much do you plan to spend exclusively on gifts this holiday season?; (14) How much do you plan to spend on travel during the holidays?; (15) Who do you tip for the holiday season?; (16) Do you tip extra to service workers (food delivery, Uber, hairdresser, etc.) during the holidays?; (17) What is the primary way you plan on paying for your holiday spending?; and (18) What holiday purchases do you make at the dollar store? (Select all that apply). GOBankingRates used PureSpectrum’s survey platform to conduct the poll.

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This article originally appeared on GOBankingRates.com: Why Half of Americans Will Scrimp on Tipping This Holiday Season

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