In many situations, tipping isn’t an option, but you can still decide how you tip.

By Lauren Phillips
December 02, 2019

If you’re up to date on your tipping etiquette, you likely already realize (and respect) that tipping is a must in many situations. It’s absolutely necessary when dining out, considering many restaurant workers are paid less than minimum wage with the difference made up in tips, but there are other situations where you truly want to tip—think tipping a massage therapist or tipping your hairdresser—to maintain a relationship with a professional you know and trust.

Understanding every situation where you should tip can be a minefield; the only thing trickier (for many people) is knowing when to tip with cash or a credit card. In many situations, if you pay with a credit card, you can add a tip to your bill, putting the charge on your card along with the charge for the meal or service, but tipping with a credit card isn’t always the best option for the service-worker or person receiving the tip.

First, there can be a delay in processing credit card tips, so the workers may have to wait until the next payday to receive the money. If they’re struggling to make ends meet, not receiving daily tip money can put a huge strain on their finances. Second, restaurants or employers must pay credit card companies a percentage for each transaction, and U.S. Department of Labor regulations allow employers to take that percentage out of employee tips. Third, if you’re always relying on a credit card (or debit card) to tip, you may miss out on the opportunity to tip workers where no credit card transaction takes place—think movers or valets.

If you’re committed to tipping well and want to make sure your tips are ending up in the right pockets, read on for situations where it’s best to tip in cash—and one where tipping with a card is better.

RELATED: 5 Times You Should Pay With a Credit Card, Instead of Cash or a Debit Card

When to tip in cash

Restaurants and dining out

If you’re in the habit of paying for expensive meals at high-end restaurants, this might not apply—it’s not reasonable to expect anyone to carry enough cash with them to cover the sizable tip on a bill that’s a couple hundred dollars. If your restaurant tips tend to be $30 or less, though—and unless you’re spending $150 or more on each meal, they should be—you can certainly carry enough cash to cover that 15 to 20 percent (or more!) tip.

According to The Takeout’s advice columnist The Salty Waitress, most food industry servers prefer cash tips. They receive that money right away, instead of potentially having to wait until the next payday to receive credit card tips. (There are also some tax benefits for them having unreported cash tips, instead of taxable credit card tips, but taking that route is a personal choice.) Plus, they’ll pocket more money: Remember those fees employers must pay credit card companies? They can be as much as three percent of each transaction, taking your satisfied 20 percent tip down to a 17 percent tip. If you have the cash, try to leave your tip on the table after using your credit card to pay the bill.

Coffee shops (or any dining establishment with counter service only)

Traditionally, if you’re not being served your food, tips are not expected. Still, baristas and other employees at bakeries, coffee shops, and more often put out a tip jar, and contributing a little to their funds is the right thing to do, especially if you’re a regular—and especially if they’re making minimum wage (and they probably are).

At these establishments, you typically have the option of adding a dollar or two on to your bill for a tip when you’re paying with plastic. Every little bit adds up, but if that bit has a percentage taken out of it—we’re back to those transaction fees employers must pay on credit card bills—it’s even smaller than you may think. Instead, if you want to treat your favorite barista or sandwich shop worker right, keep a few dollars (or even spare change) to toss in the tip jar each time you stop by.

Nail salons (or any place that says cash gratuities are appreciated)

Must it be said? If an establishment asks you to please tip in cash, you should really tip in cash. Knowing what politics or dynamics are happening behind the scenes at each salon is impossible, and you should trust that there’s a reason they ask for cash tips. Some employers may not even accept credit card tips on behalf of their employees, so if you don’t have cash, that means no tips for the person who just polished your nails to perfection. Keep cash in your wallet, or run out to the nearest ATM after your appointment and bring back a little monetary gratitude.

Complimentary services, such as coat check, valet, room-cleaning, or porter services

Most tipping etiquette says to tip $1 per item at coat check and $2 to $5 for valet parking; for porters and bellhops, $1 to $3 per bag is fine. In these situations, it’s especially important to plan to tip in cash, because you’re not paying for the service itself, so there’s not even an option to pull out your card. Not having a cash tip means no tip at all, which will earn you a few dirty looks and probably a good bit of guilt.

Food delivery

This is particularly important if you’re ordering food through delivery apps. Certain food delivery apps incorporate tips into the promised fee they pay workers for each delivery, so your tip for a speedy delivery or thoughtful service simply saves the company a little money—workers don’t receive the full tip, leading to campaigns asking people to tip in cash, according to Fast Company. Don’t mistake a delivery fee for a tip, either—if you order delivery, plan to tip $3 to $5 for the luxury, more if the weather is particularly nasty.

Any service you’re paying for in cash

Another obvious one: If you have an agreement with your lawncare service or house painter to pay for their services in cash, plan to tip in cash, too. If plastic never enters the payment conversation, don’t rely on a card transaction to cover the cost of the tip on top of the service cost. You’ll already have cash on-hand—just withdraw a little more for tipping.

Services with prior payment

Say you’ve purchased brand new appliances from a large business that offers free delivery or charges a delivery fee at the time of purchase. When the large, heavy items arrive, you’ve already paid for everything—but you still want to thank the delivery team for their work, especially if they have to carry the items up or down stairs or do something above and beyond just dropping the items at your door. In these situations—movers also fall into this category—you’ll want to have cash on hand to give to the people doing the work, beyond what you’ve paid the parent company.

The one time it’s always OK to tip with a credit card

If tipping in cash means leaving a smaller tip or no tip at all, put the tip on your card. Credit card fees and delayed payment aside, any service worker will take a larger tip on a credit card over a smaller one in cash.

In the situations where putting a tip on a credit card truly isn’t an option—tipping valets, housekeeping, movers, etc.—and you don’t have a single dollar on you, consider asking if they use the Venmo app or another money-sharing service. Savvier service workers (particularly younger ones) may have accounts with these apps, and you can send money directly through them; for some people, that may be even better than cash, but don’t assume that to be true for everyone. If even that fails, you can offer to write a check.

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