To tip, or not to tip

On my first business trip to the United States many years ago, I was travelling with an Australian public relations consultant who had a bad experience with the local tipping culture.

She caught a taxi from the airport to the hotel in Las Vegas and after she got out and paid, he took off with one of her bags - which happened to contain her passport.

She immediately called the cab company to try to retrieve it. At first everyone assumed it was inadvertent, but then the cabbie left a message at the hotel saying that he'd taken the bag because she hadn't left a big-enough tip.

When she reported this to the authorities, the person on the other end of the phone replied, without skipping a beat, "Well, how much did you tip?"

Unbelievably, she never got her bag back and had to leave the conference a day early to visit the Australian consulate in Los Angeles and sort out a new passport.

After the conference ended, I spent the weekend in Las Vegas on my own dime and downgraded to a less luxe, but still nice-enough, hotel off the main strip.

On the morning of my departure I was waiting for a cab just before 6am, and started chatting to the doorman. He was from El Salvador so I tried to practise my rudimentary Spanish. The kitchen wasn't open yet but he offered me a coffee, and made it for me in the staffroom.

I was very surprised when he refused a tip.

I guess he felt there was a human connection and he wanted to show genuine hospitality. Thankfully, he wasn't offended by my offer.

Getting the etiquette and ethics of tipping right can be tricky, especially outside your home country.

"Australians don't really know how to tip because we're not a tipping culture," says Tamerlaine Beasley, managing director of cultural consultancy Beasley Intercultural.

"One example I'd give is that in the US I had no idea you'd tip a hairdresser or anyone giving personal services. It's pretty common knowledge that you'd tip a taxi driver or a waitress but most Australians wouldn't know the boundaries of where you do and don't tip."

In the US and Canada, it's customary to tip 15-20 per cent on top of the bill. In Europe it's similar to Australia - an optional thank you for good service.

In Asia it depends. Apparently, tipping is normal in Thailand but frowned upon in Japan and China. That's despite the fact that in east Asia it's much more common to give cash as a gift for birthdays, weddings and even to bereaved relatives at funerals.

With tipping culture varying so wildly, Beasley says you need to research beforehand.

"The best thing you can do is ask a local, and hotel concierges can be an incredibly good source of advice," she says.

"The other thing to bear in mind is that locals will often go 'Oh it doesn't really matter, it's up to you' whereas it usually does matter and it's very rarely up to you. There usually is a rule so you need to be rigorous in your questions."

From the point of view of self-interest, the main reason to tip properly is to make sure you get good service next time. But if you tip too generously then you might set up an expectation that will cause problems for yourself and other people in the future.

Beasley says when you travel, your behaviour also reflects on your country more than you might expect. "It's amazing how much when you travel in the region [Asia] people from different nationalities have reputations," she says.

But what about from the point of view of doing the right thing?

Dr Matthew Beard, an ethicist with The Ethics Centre, says in countries such as Australia there is no moral obligation to tip. If staff are paid a living wage, then customers can consider it a genuinely optional gratuity for good service.

It's a more difficult ethical dilemma if tipping is supplementing a very low wage, such as in North America and many developing countries. In this case the decision not to tip is essentially docking their pay.

But by participating in the tipping, are you somehow complicit in the low-wage system?

"I'd suggest that if you don't want to be part of a system where there's no minimum wage or the minimum wage is below the living wage, don't go to restaurants," Dr Beard says.

"If you don't tip, the consequences are going to be felt by the victim, you're protesting on behalf of these people but you're also hurting them."

He adds it's possible to tip too well from an ethical perspective if you can't afford it but feel obliged, or if you're tipping out of fear.

Tim Harcourt, author of The Airport Economist, adds that you might tip different amounts to different people depending on what you know about their circumstances. His wife is from the US.

"My wife used to be a waitress and she used to say that the men who work behind bar get paid more than the women who are waitresses so you shouldn't tip them as much," Harcourt says.

Dr Beard says tipping is not just about the economic transaction.

"There's also a human connection," he says. "It's important to understand the cultural context but it's also important to think about the way in which you want to relate to other people and understand that how you tip is part of that."

Caitlin Fitzsimmons is the Money editor for the Sydney Morning Herald and The Age. She writes weekly about the psychology of money and fortnightly about our lives at work. Find her on Facebook and Twitter.

The story To tip, or not to tip first appeared on The Sydney Morning Herald.

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