Guilt or gratitude? Tales of the holiday tip

NEW YORK Wed Dec 5, 2012 8:58am EST

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NEW YORK (Reuters) - After seven years as a New York City hotel concierge and 10 years running a concierge firm, Michael Fazio certainly has his opinions on how to appropriately tip during the holidays. But if you think he recommends playing Santa Claus with every service employee who crosses your path, guess again. (Neither does he espouse a Scrooge philosophy.)

As you come to grips with how much to tip people for the holidays, your own finances should be the main consideration. To keep control of spending and give appropriate gifts to the right people in your life, you need to plan ahead.

Fazio suggests making a tipping budget first, just as with any line item in your family finances. "Ask yourself if you have $500 or $5,000, and work backward from there," he says. He suggests applying a rule of thumb based on tipping tiers rather than throwing money around willy-nilly: $20 gets a smile, $100 gets somebody's attention, and $200 gets what he calls "insurance."

That last category is for people who interact with your most valuable assets. "I love the guys in my garage, and they park my car upstairs in a very good spot. I don't want anyone who has access to a $50,000 piece of my equipment to be angry at me," Fazio says.

GUILT OR GRATITUDE?

The one thing Fazio's formula does not take into account is the quality of service he received over the past year. That is typical, says Holona Ochs, a political scientist at Lehigh University in Bethlehem, Pennsylvania.

As co-author on a book about gratuity giving, Ochs interviewed postal workers, bartenders, strippers and even prostitutes — more than 425 tip-earners in 50 occupational categories — to get their views on tipping and compensation. "Tips are generally a weak signal of quality of service," Ochs says. "People appear to tip rather for social and emotional reasons, because we care about how others perceive us."

If the amount you tip is aligned with your emotions, you could end up spending out of control, especially on tips for personal service providers like nannies, housekeepers and dog walkers. Looking for a good amount? Tip them up to one week's salary, Ochs says.

Try not to be ruled by guilt, adds Fazio. "We should all treat each other pretty nicely, so it's great that the doorman is nice," he says. "But is he proud of his profession? Does he take pride in his service? Does he look engaged? Being nice is just one ingredient of many, and a tip is showing respect and appreciation financially for a job well done."

That view resonates with Jason Haber, the CEO of Rubicon Property, a real estate firm in New York City. "Doormen, porters and maintenance staff deserve a generous hand, but I think it's important to ask friends and neighbors what they give, and then decide accordingly," Haber says. "Every building has their own internal protocols and customs."

Even so, an element of insurance tipping comes into play: "There are many stories of how failure to tip resulted in a staff that became less attentive and helpful in the following year," Haber says.

DON'T TRY TO KEEP UP

Holiday tipping isn't a contest, either. "It is more important to maintain your financial security than to out-tip the Joneses or blindly follow a neighbor or relative's advice," says Kevin Gallegos, a Phoenix, Arizona-based vice president of operations with the Freedom Financial Network, a consumer debt resolution service provider.

"Tips can add up, so if a cash tip is outside your budget, take the gift route or say thank you with a batch of cookies. The most important element is to let your caregivers know you appreciate their work all year round."

Some holiday tips work out better if you pool resources. Colleen Rickenbacher, an etiquette expert and author of "Be On Your Best Business Behavior," suggests that parents at a school organize to give one nice gift to a teacher at the holidays. Cold cash is out. "You don't want to look like your children are bribing them," Rickenbacher says. But gift cards can work. Check with your school's policies to see what's permissible.

How about cash for the trash man? Why not, Rickenbacher says: "If they work for a privately-owned company, then tip $10 to $20 for each trash collector that may service you throughout the year."

Technically speaking, you're not supposed to tip a U.S. Postal Service mail carrier, but no one's likely to complain if you adhere to the government's "20/50 rule," which limits single gifts to $20 and total gifts in a calendar year to $50.

And while newspaper carriers represent the last heralds of print news in an electronic age, enough of them remain to make a holiday stocking stuffer worth pondering. Rickenbacher suggests between $10 (for Sunday subscriptions) to $25 (weekly subscriptions) for your local paper person, adding that you should include a full name and address in the tip card so that they know who's delivering them some good news.

As for Fazio, he's never met his newspaper delivery woman, which would normally rule her out on his list. But he has reconsidered her contribution to his daily life.

"She has to get up at the crack of dawn to get my paper," Fazio notes. "I need that person, I appreciate what they do, and I wouldn't want to wake up at 3 a.m. to get my own newspaper."

(The author is a Reuters contributor. The opinions expressed are his own.)

(Follow us @ReutersMoney or here. Editing by Beth Pinsker Gladstone, Nick Zieminski and Lauren Young)

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