Readers of this newsletter are firm that a 15 per cent tip at restaurants is just fine.
There were a few voices of dissention among the hundreds of responses received to my request for comments on whether a 15 per cent tip is cheap. “Tips should be 20 per cent,” one reader said by e-mail, while another wrote that “20 per cent should be the standard.” A few others leaned toward 10 or 18 per cent.
Where the general consensus on the 15 per cent tip broke down is on the question of whether it should apply to the pretax amount, or the tax-in cost you see on the payment terminals used in restaurants and stores. The idea of tipping on tax offends some, but most people seem grudgingly OK with it.
Now, for the problem with 15 per cent tipping. Restaurants and retailers make you feel cheap if you choose that amount. Payment terminals often present three tipping options – 18, 20 and 25 per cent. Going off the menu to choose 15 per cent or whatever makes people feel, well, allow me to quote a few readers:
- “I hate the awkwardness of tipping.”
- “With the suggested tip automatically displayed on the card reader, it is awkward and intimidating to reduce the tip with the waiter standing right there.”
- “I just hate being told not only that I have to tip, but how much.”
The word hate came up a bunch of times. “Restaurant tipping – I hate it,” said the subject line on one reader’s e-mail.
Quebec recently introduced new rules on tipping that are supposed to ease pressure to give higher tips and ensure tips are calculated on pre-tax amounts. Meantime, a recent edition of the Globe and Mail’s Decoder feature noted that restaurant bookings for April were up 20 per cent compared to the same period a year earlier, possibly because of cancelled plans for U.S. travel. It seems clear that as much as people dislike tipping, they love restaurants.
Now, it’s time for restaurants to love us back. Adding a 15 per cent tipping option on payment terminals would be a good start.
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Rob’s personal finance reading list
Housing’s other affordability problem
Getting into the market as a first-time buyer is the affordability issue that gets most of the attention in housing, but many people who already own houses are finding it hard to afford their mortgage and other costs. Now, for a look at the touchy issue of whether home prices must come down to improve affordability for buyers.
Best ETFs for balanced investors
A look at some top choices for investors making the sensible decision to use an asset allocation exchange-traded fund, which is a fully diversified portfolio in a single low-cost product. Balanced asset allocation ETFs typically have a 60-40 mix of stocks and bonds. You can also get more and less aggressive versions.
Retirement, euro-style
A look at retirement ages in Europe, which are creeping up from the old standard of 65. Retirement ages are significant because they’re a reference for starting pension benefits. The date for starting Old Age Security in Canada was set to rise to 67 from 65 under former Conservative prime minister Stephen Harper, but the Liberals cancelled that plan. Don’t be surprised to see this decision revisisted. OAS is a huge cost for the federal government and getting bigger as the population ages.
Prepping for disaster
The Guardian asked its international readership for thoughts on what to pack in case of an event along the lines of the recent power outage in Portugal and Spain. Toilet paper, sure. But what else?
Podcast fans
Subscribe to Stress Test on Apple podcasts or Spotify.
Ask Rob
Q: My wife is the beneficiary of my registered retirement income fund account. After my death, does she have to pay tax on this?
A: The answer should be no. Details here.
Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.
Tools and guides
A tipping calculator that asks for the amount of your bill and the percentage tip you want to leave.
In the social sphere
Social Media: A discussion about whether term or whole life insurance is the better choice.
Watch: The risk of a retiree tax shock, and how to avoid it
Money-Free Zone: The alt-rock band The Feelies just issued a pair of covers I’m enjoying – Patti Smith’s Dancing Barefoot and Barstool Blues by Neil Young. The Feelies’ jittery guitar sound suits both tunes nicely. One more Feelies cover for you – a version of David Bowie’s Fame that was featured in the 1986 movie Something Wild. If you haven’t seen Something Wild, get on it. A hugely watchable weirdo romcom that goes off in unexpectedly tense directions.
More PF from The Globe
- Many parents worry they can’t afford to leave an inheritance – but their kids may be banking on one
- Stress-test your retirement: Four smart moves to make now
- Dependable dividend payers that helped the CPP bolster its returns
