Here's a tip: Don't stiff your providers

  • Article by: KELLI B. GRANT , MarketWatch
  • Updated: December 17, 2012 - 2:18 PM

Experts say average tip amounts have held steady at $20.

Photo: Philip Brooker, Miami Herald

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Holiday tips are one of the first expenses to fall by the wayside when times are tough, and sometimes the last to bounce back. Even though consumers say they plan to spend more on gifts, decorations and other purchases this year, experts say tipping will remain fairly flat.

Last year, 39 percent of consumers didn't tip their service providers, up from 38 percent in 2010, according to the Consumer Reports National Research Center. Average tip amounts have held steady, with $20 averages for providers including garbage collectors, teachers, hairstylists, newspaper carriers and pet-care providers.

"Tips are pretty uniform," says Tobie Stanger, senior project editor for the Consumer Reports National Research Center, which tracks gifting for 10 different service providers. "We haven't seen much of a change."

There are signs that budget crunches are easing, if only slightly: 68 percent of people gave a cash tip or gift to their housecleaner in 2011, up from 61 percent the year before, according to the survey. While about the same number of people (34 percent) tipped a pet-care provider, more gave a check or cash instead of a gift, which could be less valuable. Some consumers are also talking about giving a little more, says Jodi R.R. Smith, founder of etiquette consulting firm Mannersmith.

Experts say tipping etiquette varies by region -- coastal states tend to focus more on cash tips, while Middle America favors gifts, Stanger says. The appropriate amount to give can vary based on local pricing, but skipping the tip is a bad idea no matter where you live, says Teri Rogers, founder of real-estate guide BrickUndergound.com. You risk poor service going forward. More important, Smith says, it's rude.

Here are some tips for giving without offending:

SAY THANKS

Include a thank-you note with any holiday tip. "Holiday giving is really a way of saying thank you," Stanger says. A note is especially important if you're giving less than usual or can't afford to give at all, she says. That lets recipients know that they're not being snubbed.

CALCULATE RATES

The rule of thumb is to tip the cost of one session for a provider you see regularly, like a personal trainer, baby sitter or lawn-care provider, says Smith, but if you're somebody who only gets your hair cut twice a year, you can scale it down appropriately. Daily helpers like nannies, elder-care workers and dog walkers should get more: Give a week's pay, at least.

CONSIDER GIFTS

Cash is preferable for most recipients, but in a few cases, gifts are the better choice. "In a lot of school districts, they frown upon teachers getting cash. It could be looked on as a bribe," Stanger explains. Postal workers can't accept cash or a gift valued at more than $25. Consider the restrictions when deciding whether cash or a gift is more appropriate. Gift-giving etiquette means putting thought into the gift; a generic gift card is better than one to a specific store if you don't know what the housekeeper likes, says Smith.

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