Holiday Tipping Tough On Wallets

Dec. 18, 2009— -- Debra Nussbaum Cohen doesn't look forward to the holiday tipping season. Raising three children in pricey New York City on a modest income, Cohen has always felt burdened by the outpouring of cash gifts expected from her at the end of the year. Still, she gives as much as she can.

"We tip the way we're supposed to, but it's hard," says the writer, explaining that the recession has only made matters worse. "Most of us don't make all that much to begin with, and to dole all that money out at once, it's hard."

Cohen falls right into the middle of a debate that flares up around the country each year about holiday tipping. The debate is particularly meaningful this year since so many Americans have lost their jobs, homes or retirement accounts, but it sounds very much like the discussion heard around kitchen tables and in online chat rooms each year. On the one hand, there are those who believe it's impossible to expect middle class families to spend hundreds of dollars on tips each December, while others feel that those who serve you all year round deserve a little extra appreciation.

"I think it's a little out of control," says Mats Rudels, an artist from Madison Wis. who says he tips anyway because everyone else does. "People should get paid for their work, and they shouldn't need my tips."

Others complain about the cold materialism of cash gifts, saying they would much rather give their doorman a box of homemade cookies than a $100 bill.

The discussion draws so many strong opinions in part because we rarely know how much we're expected to tip, let alone what others around us are paying. (Not what they say they're paying!)

"The norms aren't clear and that's really problematic," says Michael Lynn, a professor of consumer behavior at Cornell University. He points out that one-third of Americans don't know that they're expected to tip 15 percent to 20 percent in restaurants, even though this expectation is very widely publicized. "If a third of people don't know what you're supposed to tip in a restaurant, you can imagine how many people don't know how much to tip for the holidays."

Lynn argues that despite this confusion, Americans are eager to tip anyway because they're afraid of the stigma of not tipping. They worry that they might be considered cheapskates or end up with shoddy service in the following year.