Opinion: Tipping isn't a tax, we need to stop treating it like one

Nov 17 2016, 2:49 am

At back-to-back restaurants last week in Toronto I was handed the POS terminal (you know, the portable card reader machine that takes all your money) to pay for my meal with my credit card and the tipping options were as follows:

  1. 15%
  2. 20%
  3. 25%

Yes, 25%. Twice. At completely different restaurants across the city from one another.

Remember 10 years ago when tipping in major cities suddenly jumped up to 18% and everyone you knew (who wasn’t and had never been a server or bartender) lost their minds like they’d just seen The Red Wedding for the first time?

And then five years ago when 20% started showing up and people said, ‘enough, no, not happening, no way!’ Except that it did happen and now many of us feel like we’ll be publicly shamed if we don’t ante up the requisite fifth of our bill for gratuity. And now, with the causal introduction of 25% as a suggested option for a meal well served I’m left asking, when will it end? When will I be leaving 30% or 50%?

Well, after this news from Vancouver-based Lendful Financial, the answer to when will it stop could simply be: now.

After putting together a very simple spreadsheet that calculated how much the average Canadian millennial is spending out every day, they then added on the ‘necessary’ tips being left on top of that. And, well, the annual repercussions of our daily tipping habits quickly add up to a terrifying total.

Namely, in a 30-year span, you could be dropping approximately $76,750:


Lendful Financial

Considering that the “average wage for Canadian employees is $943 a week – or just over $49,000 a year (after-tax, a little shy of $41,000 per annum, $3,400 per month),” that means we’re talking nearly two years’ salary spent on tipping over an adult lifetime.

Do I have your attention now?

When we spoke to Lendful CEO and co-founder Alex Benjamin about our tipping habits, he explained that as a lending company they see into people’s finances, and one of the things they started noticing was how much people were spending on tips and how much they weren’t counting it in their spending habits.

He also stressed that Lendful “isn’t saying ‘don’t tip.’ We’re not saying don’t reward people who deserve it.” Rather, Benjamin’s suggestion is simply that we need to “have the conversation.

“We started looking at a number of different conversations millennials should be having around money, and a lot of them are generally awkward conversations, and so they’re being avoided.”

Of course, when you’re tipping the equivalent of a downpayment on a house over 30 years things are bound to get awkward.

“It’s worth putting a little more thought into,” says Benjamin. “Right now, someone earning $35K to $40K a year is expected to tip the same as someone who makes $200K.” When pressed for a solution to this tipation without proper representation (of means), Benjamin doesn’t pretend to have all the answers, he simply reiterates that it’s a conversation we all need to be having with ourselves.

“What this comes back to is choice. As a consumer you have choice.”

As someone who consistently tips 20%, and is often blithely unaware when handed a terminal whether that is 20% on top of tax or before it, I believe Benjamin is right.

It is my choice.

And the choice I’m going to make is not to stop tipping, but rather to begin paying much more attention to who gets my gratuity and how they’ve earned it.

After all, tipping isn’t a tax, and we all need to stop treating it like one.

Eric WainwrightEric Wainwright

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