Tipping: Personal or Business Transaction

[Tanner]

When you give someone a monetary tip, do you consider it a business or a personal transaction? Do you think that because actually paying for the product or service is a business transaction and that tipping is a by-product of that, that tipping is a business transaction? Or do you think that because it's not obligatory and is left mostly to personal preference, that it's a personal transaction between two people?

Edit: Only members of the Youth and Beauty Brigade are allowed to quote Mr. Pink in the context of this thread.

[blue_tetris]

Business is not the opposite of personal. What the hell made you think "business" and "personal" were two mutually exclusive forms of transaction. Allow me to describe to you the terminology you're using here.

Any exchange of money is "business". Business is any commercially viable activity. So tipping is a form of business. Moreover, it is a transaction that is commercially viable. So, yes, it's a business transaction. No matter how you send the money, when you tip, you are doing business.



Unless the firm that employs the recipient of your gratuity accounts for the tip, then it's personal as well. I am presuming that "personal" means between two people in your usage of it, Tanner. In this case, personal business transactions include all gratuities in which the firm doesn't account for the tip. By most laws, this gratuity must be accounted for so it can be taxable. It is income. It's for this reason that most firms do have a hand in "gratuity", which has become increasingly less "gratuitous" and more obligatory (some places simply add it into your bill) as companies find easier ways of handling their taxes. I suppose it's possible for employees to jot down their tips personally and offer no account for them to any other person and still somehow pay fair income tax on them. But it's unlikely that it will happen, and the principal responsible for those transactions (the holder of the employee) could find themselves in trouble with the IRS (or Canadian Mounted Tax Collection Troupe) if those figures aren't reported properly.

Also, saying tipping is less businessy because you do it for a service rendered instead of a product rendered is mostly short-sighted.



In sum, your question sucks, Tanner. All transactions are "business transactions". And "personal" is a fuzzy term.

[Tanner]

If that's your opinion, how do you account for the variable of personal preference by the patron towards the product or service provider? And I'm not talking about consumer loyalty here, either? I'm talking about you thought the waitress was cute and bubbly and you want to give her a little something extra. Despite the fact that the net result of taxes, tracking, etc. turn a kind gesture into a business transaction, I wonder if, at it's root, is this monetary transaction personal or professional?

Am I giving this person more than what I owe because I think they did their job or because I think they went above and beyond the call of duty so much so that I consider our relationship to be more than just business?

[blue_tetris]

If that's your opinion, how do you account for the variable of personal preference by the patron towards the product or service provider? And I'm not talking about consumer loyalty here, either? I'm talking about you thought the waitress was cute and bubbly and you want to give her a little something extra. Despite the fact that the net result of taxes, tracking, etc. turn a kind gesture into a business transaction, I wonder if, at it's root, is this monetary transaction personal or professional?

Am I giving this person more than what I owe because I think they did their job or because I think they went above and beyond the call of duty so much so that I consider our relationship to be more than just business?

Ahh, I see. Well, I'd say that their kind gestures, cuteness, bubbliness, and the like are all a service. If you think that service warrants a higher gratuity, then you pay that amount for that service. But the consumer probably believes that their gratuity is out of "being nice" and not out of paying for a service rendered. That doesn't alter the nature of the service (whether it's "personal" or "professional"). The profession led by the waitress (or a vagrant, busker, or street performer) is one which renders that same service for income. So, that transaction is necessarily professional. If their profession didn't allow for gratuity but they received it anyway, it might an unprofessional transaction. (That's also not necessarily a personal transaction.)

So I account for personal preference by the patron towards the provider like I do with any other firm. The service rendered is viewed as superior so the customer prefers it and pays more for it.



I'm interested in knowing whether other people think their giving of a gratuity is "unprofessional", "intimate", or whatever, though.

[SkyPanda]

I'd say tipping is a business transaction. It's obligatory in many places around the world, and it is not uncommon worldwide for restaurants and hotels to add automatic percentage-based "service charges" to the bill.

In Australia it is quite common for customers to not accept the change for the transaction if it is a reasonably small amount. Although this is very similar to tipping and is sometimes done out of gratitude, it is more often a self-serving gesture- nobody likes carrying around a wallet full of coins. The kept change is off the books, and the receipt will read that the change was received by the customer, irregardless of whether they took it or not. Also common is tip jars, where customers drop their spare change. I've never worked in a place which had a tip jar, so i'm not sure how the tips are distributed with that, but in the places that I have worked, the refused change is simply added to the till total and has no bearing on the wage paid to the worker/service provider. I'd propose that the closest tipping gets to a personal transaction is when the waiter (for example) pockets the tip.

Ha, I just read the wikipedia on article and it says much what I just did. I'd like to correct a strange claim written there though, that 'tipping' is linked to rubbish collection (and as evidence, they've linked to the Brisbane council site, rubbish collection section. Hmm.) The word 'tip' is indeed also used to reference a rubbish dump, but in NO WAY would anybody ever make a connection between tipping in the service industy and a rubbish dump. The word tipping to refer to extra money paid is quite common in Australia. This is one of the weirdest claims i've ever read on wikipedia.

[capt_weasle]

I certainly don't view tipping as obligatory, but I might be biased since I'm a jobless (and therefore poor) high school student. This has never happened to me, but if I thought a waiter was truly horrible, I'd have no qualm in denying him/her a tip.

Start a job where part of your earnings is in tips, and your views on tipping will change. I think it's good you usually just tip %15, and it is the waiter's fault if he is a dick/inconsiderate. I think for larger parties or ones that require special attention, tipping is a little more obligated than for a normal party (as they are a lot bigger hassle than regulars). For the most part, tipping is based on the service, unless you are at a fast food / casual food joint where you tip at the register, which is when people tip out of habit because they only have the experience of the cashier (though most don't tip at all).

[Kablizzy]

So when my Grandmother gives me a Christmas check for $3.64, she's paying me for services rendered?

[T3chno]

My dad's a head chef for a top-notch Indian restaurant here in the South Bay. He gets many tips. I don't see them as business. My dad told me how there was a party of 30 or so people and left him a total of $500 in tips just because they enjoyed the food that much.

[blue_tetris]

So when my Grandmother gives me a Christmas check for $3.64, she's paying me for services rendered?

This isn't what the original topic was about and no one is saying that. This was about tipping at a restaraunt, where the waitstaff is acting as an extention of that firm and performing duties associated with their profession.

If your profession involves being nice to grammy, then that pay might be an aspect of services rendered. Perhaps the biggest difference here is that serving customers food is part of their job description. Any money they receive as "gratuity" is a part of their income and is taxable, must be accounted as assets or even income for the firm, etc, etc... it's all part of the job and it's not a "gift". If the customer thinks it's a gift, good for them! They might feel better about giving the money.

Important part: When you tip an employee at a restaraunt, it's important to note that you're also tipping the federal government. Granny can hand you a five spot without even thinking about Uncle Sam's cut, because it's not commerce. And no matter how you view gratuity at restaraunts, it's a viable function of commerce and the government, community, and public owners are stakeholders in its function. Stakeholders deserve a right to profit from the functions of their business.



If your granny is paying you $20,000 a year for roofing her house, you might be able to hide it from the government. However, that's taxable income and is part of commerce, too! It's a business transaction. If Grandma keels over and you get $20,000 in inheritance, there are still laws that consider that part of commerce and therefore a business transaction. Although not technically income, Uncle Sam gets to tax her deathcash too--which is amazingly even more than the amount He'd tax if it were acutal income. So, when the old bat kicks the bucket, try to pretend like you were roofing for her or serving as her private accountant. It'll save you some money.

[Kablizzy]

Well, in all fairness, I *did* wash her cat. I guess that's worth three bucks.

[Tanner]

Any money they receive as "gratuity" is a part of their income and is taxable, must be accounted as assets or even income for the firm, etc, etc... it's all part of the job and it's not a "gift". If the customer thinks it's a gift, good for them! They might feel better about giving the money.

There's the nail in the coffin of my argument. Friggin' rhetoric; I'm only introducing threads with real, palatable facts from now on.

[blue_tetris]

Well, in all fairness, I *did* wash her cat. I guess that's worth three bucks.

If it's granny and she doesn't say it's for washing the cat, then it ain't for washing the cat. If you're working for Denny's and a customer slips a five into your titty-pocket and says "This isn't for being delightful and delivering quality service in the course of your work", then just maybe it's not. But I think that an employer would be a little skeptical about that analysis and would consider it a business transaction anyhow.



Also, I don't know what Tanner is getting at. I don't have a real opinion here aside from the facts so I'm offering those facts. They should be interesting, at the least. If Tanner is refering to the original argument as to whether tipping is a "business transaction", I don't think any amount of feelgoods should change the fact that it is, indeed, business. It's a function of commerce and when you tip the employee, you tip the stakeholders.

I'm not saying don't make threads if you don't know facts. Being curious and inquisitve is a great way to discover things. Just don't be annoyed when someone offers a fitting response. You don't need to confound people with your threads in order to succeed, Tanner. We appreciate and enjoy your lust for erudition and view you as a powerful asset to the community.

The service of their business is to be "personable", so maybe it's a personal exchange too. But the function of a PR rep, a Best Buy employee (or any sort of sales rep), or a masseuse is to develop personal relationships. They forge personal connections so they can push products or services. Their service, being friendly and human, generates their income. Am I to assume that those people are out of "business" and are just busking for money on the streets? Nah. I assume that they're good enough at being personal as to make it their profession.

And I'm th'oo.