Dave Ramsey's Hot Take on Tipping Culture

Service-oriented employees, such as restaurant servers, bartenders, and caddies, rely on tips to make ends meet. However, it is becoming increasingly common for workers outside of these industries to expect tips for standard services.

Personal finance expert Dave Ramsey recently shared his perspective on what he views as an out-of-control tipping culture on "The Ramsey Show," offering seven strategies to help people avoid feeling pressured to tip unnecessarily. Take note so you can feel prepared financially and ethically, no matter the situation.

While the standard amount to tip is 15% to 20%, Dave Ramsey often tips higher. He believes good service deserves a generous tip, often shocking his wife with the amount he's willing to hand over for good service.

In a recent interview regarding tipping, he stated, "Tipping falls in the bucket with generosity. I overdo it to the point that my wife cringes."

Regarding counter service, Ramsey says, "I drove. I walked in the rain, got the queso, got in the truck, went to the house. No, we don't tip that."

Nonetheless, places like Starbucks encourage tipping for counter service by placing jars near the register or tipping via the app. Ramsey argues that this kind of "service" just isn't worth tipping.

Ramsey believes employees should receive tips for genuine service. While you may feel inclined to (or guilted into) feeding the tip box in the window at your local drive-thru, Ramsey does not. And he does not give in.

"I'm driving through, you're handing me the ... chicken — I'm gone," he added.

Think back: how many times has a counter staffer flipped an iPad your way this week? Using a tablet to place orders and pay at a cafe or restaurant has become the new standard.

In a survey on tech tipping, Businesswire found that 50% of customers felt manipulated by the screen into tipping, while 75% were unaware of where these tech-induced tips were going. Dave Ramsey shares this view in his recent episode on tipping culture: "You can flip that screen at me all you want. I'm not tipping."

"Guilt tipping" is nothing new. People often feel pressured into giving a tip or donating if they see others around them giving more. They do this because they don't want to be perceived as cheap.

To avoid this trap, Ramsey reminds listeners that tipping should be based on service, not guilt. 

Many Americans are starting to feel like tipping has become a routine part of their everyday transactions, even in places where it wasn't customary before.

"It's nickel-and-diming you to death," according to Ramsey.

This trend raises concerns about whether tipping still represents a voluntary expression of appreciation or a company's sneaky way of shifting labor costs onto the customers. As Ramsey puts it, "It's a  manipulation. I got zero obligations."

When it comes to gratuity, Ramsey reserves his biggest tips for employees he feels are putting in real effort. Consider workers like delivery personnel and furniture installers, those who go above and beyond.

He is known to tip hotel staff $20 per day regularly and valet drivers when picking up and dropping off his car. He also encourages people to tip delivery drivers, especially those working to get out of debt.

Your tips, according to Ramsey, should be given to people who work hard and truly deserve them. You should never feel pressured to tip by condescending staff members or screens prompting you to choose a set amount.

Set aside discretionary funds to establish your restaurant budget, or follow best practices to avoid the temptation of overtipping.