Lending Club Blog

Generous Tipping: When to Tip Like a Rock Star

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Have you ever found yourself sitting in a restaurant or at the hairdresser, frantically trying to figure an appropriate amount to tip? Should you play it safe and overtip? Should you factor in the quality of the service? You fear coming off as cheap, but you don’t want to give out free money, either.

Everyone struggles at one time or another with tipping, and these are only some of the issues that can affect one’s tipping decision. Gratuities have risen in the past decade, and remembering what amount is appropriate can be a tough task.

Fortunately, Lending Club sets a prime example for tipping etiquette. Lending Club helps connect people who need a personal loan with those who are seeking a rewarding investment path. The site’s annual average performance for a personal loan portfolio is over 12 percent, and the top performing portfolios earn lenders on Lending Club over 18.5 percent on their investments.

That latter number seems to be a perfect antidote for the oft-puzzling problem of proper tipping. For those who struggle with just how much to give in gratuity, the Lending Club return of 18.5 percent is a happy medium.

CNN Money
reported on the appropriate amount to tip in certain situations. For the most part, the average tip was 15 percent, which remains a pretty standard rate in today’s service economy. Some businesses demand higher rates, and the type of service received can also fluctuate the percentage, according to the article.

Paying 15 percent might be normal, but doing things the Lending Club way is commendable. No one likes a thrifty tipper, so keeping to the 18.5 percent gratuity can make a big difference. Here are five situations where the Lending Club tip rule can safely be applied.

Tipping 18.5 percent at restaurants

Years ago, the standard tip at a restaurant was 10 percent. Today, if someone were to attempt such a paltry gratuity, he would be seen as cheap or rude, or both. Fifteen percent seems to be the acceptable norm, and anything less would speak to poor service by the wait staff or poor math skills by the customer.

Tipping 18.5 percent, then, would appear generous, benevolent, and downright charitable. Dinner guests would find you charming, fellow diners would find you wealthy, and the waitress might find you a free dessert next time you visit.

Figuring the tip is relatively easy, too. Let’s assume the bill comes to $23.50 (you took your date to a pretty cheap restaurant). To calculate a 10 percent tip, take the total and simply move the decimal point one space to the left. A 10 percent gratuity on a bill of $23.50 would be $2.35. Doubling the 10 percent tip would give you the amount for a 20 percent gratuity ($4.70). A few cents less than that would be the 18.5 percent Lending Club tip ($4.35 to be exact).

Tipping 18.5 percent at the hairdresser

Barbers and hair stylists have a largely thankless job. They are only really recognized when they do something wrong, like shave a cartoon into the back of your head or cut your ear. A good haircut is supposed to say, “Don’t bother looking at my hair because it is normal, socially acceptable, and not nearly as visually appealing as the fact that I work out.”

Yet the importance of this service is immeasurable. With the options of never cutting your hair or doing the deed yourself, a salon provides a pretty necessary function. And shouldn’t its employees be rewarded for it?

An 18.5 percent tip would be an appropriate compensation for making sure you don’t look like a Neanderthal, 80’s train wreck, which is exactly what would happen if you took scissors into your own hands. Plus, the barber might even let you double-dip in the lollipop jar.

Assuming the haircut is a 50-dollar visit, an 18.5 percent tip would result in $9.25 extra for your hairdresser. Figuring other tip amounts is simple. For every 10 dollars, just add or subtract two dollars from your tip total. A 40-dollar haircut would yield a 7-dollar tip, a 60-dollar trim would call for an 11-dollar thank you, and so on.

Tipping 18.5 percent at the spa

For many, the spa is a great way to relieve stress and treat oneself, so those doing the work for you should be justly rewarded.

Whether the spa day includes just a massage and soak or if the visit turns into a day-trip with mud packs, manicures, and the works, an 18.5 percent tip would be an appreciated gratuity for the people who work so hard to make you feel so special.

A big spa day could cost $150, so a Lending Club tip will be a fine tip for the spa staff. At 18.5 percent, you would be giving out 28 dollars—a price tag that feels a lot better after that nap in the sauna.

Tipping 18.5 percent to the pizza delivery guy

One of the most widely debated tips is the one given to the pizza delivery guy. Some people throw a few bucks his way, and others treat the service like a standard restaurant tab. Still others choose not to give the poor guy anything.

Customers choose their different gratuities for a wide variety of reasons. Some believe that the delivery charge is included in the price. Others don’t really see the value in the service. A few find it easier on the conscience to stiff someone at home rather than in their place of business. But regardless of the justification, pizza delivery is a valuable service that should be rightly compensated. These people bring food to your homes; how great is that? The delivery man saves you the hassle of driving out to get dinner, waiting in line, fighting traffic, and wasting valuable free time. That is worth an 18.5 percent Lending Club tip right there.

A 12-dollar pizza is an easy two-dollar tip, and no one should be cheap enough to deny the deliveryman that.

Tipping 18.5 percent to the taxi driver

Getting around a big city can be hectic, stressful, and time-consuming, which is exactly why taxi drivers deserve Lending Club’s 18.5 percent tip.

For many urban dwellers, taxis are their only means of transportation. City buses only go through certain routes, and riding a bike doesn’t always fit in with a schedule or dress code. Taxis also provide a great service for out-of-towners, businesspeople and tourists.

As such, tipping 18.5 percent seems more than reasonable. Though some might feel that the fare is enough price to pay for a ride through traffic, taxi drivers offer a service that is quite important, if not appreciated.

Tipping 18.5 percent on a 20-dollar fare is $3.70 out of your pocket, which is a fine price to pay to avoid morning road rage.

Be sure to check out the article for more tips on tipping!

Thursday, March 27th, 2008 at 1:34 pm

Comments (6)

  1. Dwindle:

    So let me get this straight. A spa worker, who already makes $500 a
    week sitting on their ass doing nothing deserves a few hundred
    more, but a pizza deliverer, who loses over a thousand a year just
    in wear and tear, and a thousand a month in gas, oil, and time
    deserves only “a couple of bucks” even though his entire income
    comes from tips? It’s bad enough you will pay a spa $300 an hour,
    but to pay the driver $10 an hour is too much, even though they do
    just as much work?

    March 27th, 2008 at 11:18 pm

  2. feralbaby:

    As a waiter and student of tipping in general, I feel compelled to
    add a note here. An 18.5% tip, while perfectly adequate and even
    generous, is nothing to write home about. The author grossly
    overstates the likelihood of a “free desert on your next visit” for
    such consideration. To be acknowledged and remembered to such an
    extent, 25% or more would be necessary in my experience. Anything
    less is still just barely paying my bills.

    March 28th, 2008 at 2:14 am

  3. drkungfu:

    Don’t tip with change. Figure twenty percent, then round higher or
    lower to the nearest dollar, especially in a restaurant. In nearly
    all restaurants in the U.S., servers make only enough hourly to
    cover taxes, meaning they never see their paychecks. Those go
    straight to Uncle Sam. To an American restaurant customer,
    remember, this isn’t Europe, and le gratuit is NOT incluyee. The
    tip is not extra, it is a waiter’s only source of income. If you
    eat at a restaurant regularly, keep a minimum tip, especially if
    you intend on coming back, doubly so if you usually visit during
    lunch. Don’t go expecting that free dessert when you get $10 worth
    of food and leave $1.85 on the table. Remember; if you don’t have
    enough moolah to tip your server well, then you aren’t rich enough
    to be eating out, Moneybags.

    March 28th, 2008 at 5:39 am

  4. Hal:

    Ah, tipping arguments. Let’s start here; the guy who thinks he’ll
    get any special consideration for 18.5%. You won’t. Generally I
    consider anything less than 20% a bust on my skills as a server and
    would appreciate it if the customer would share with me or my
    management the reasoning for this. Just a note to all the diners
    who don’t tip well. We remember the good tippers and we really
    remember the bad. Trust me, if you’ve visited an establishment and
    tipped poorly, you can be sure all the employees know it and will
    happily give you crappy service next time you’re in.

    March 28th, 2008 at 10:18 am

  5. Hal:

    My rules on tipping: restaurants = 20% unless the service was
    unacceptable. hairdresser = first, I’m a guy. Mens haircuts average
    about $20 where I’m from. I put a 5 on it. spa = like I said, I’m a
    guy. spa = never go. the pizza delivery guy = They bring the food
    to your door! $5 minimum and 20% for any order over $25. taxi
    driver = 15% min. Follow this and no one will think you’re an
    a**hole, at least not for how you tip!!

    March 28th, 2008 at 10:29 am

  6. Okay, I own a spa. I have to stand up for my staff and tell Dwindle
    that my employees do not “sit on their asses.” Giving a spa service
    (such as a massage or a facial) is physically hard labor. In fact,
    if you give 4 massages in a day, you can liken it to working out
    for 4 hours at the gym. Not only that, but you are frequently doing
    it in a room that feels too hot for you because the temperature
    must be adjusted for the comfort of the client (who is lying on the
    table unclothed and relaxing, and at a much lower body
    temperature). So, you are definitely sweating. And that means that
    spa employees deserve as much of a tip as anyone else. That being
    said, I don’t feel that anyone should expect a tip at all… I
    really frown on comments from my staff like, “She only left me a
    $10 tip” or “She didn’t leave me a tip” with the customary
    look on their face of dissatisfaction and chagrin.
    The attitude that you should get 20% just because you are in the
    service business does not fly – you still have to earn it. Besides,
    anything you do get ought to be looked at as a blessing (because
    you could get nothing at all)! The other thing we have to remember
    is that not all cultures tip. In fact, ours is the only
    one
    I know that does. No one tips in Europe (I had a
    waiter get offended when I tried to tip him in London). No one tips
    in Asia. No one tips in India. So if someone isn’t leaving you a
    tip, it might just be because they don’t know that they should. So
    be grateful for anything you get… and more will come your way as
    a result.

    June 26th, 2008 at 5:59 pm

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