Money

Here Are the Best Places in the Country for Tipping

As cities and businesses experiment with higher minimum wages, it's easy to imagine tipping becoming an obsolete institution. Some restaurants have already nixed it, favoring an automatic gratuity charge on the bill.

But that doesn't mean it's anywhere close to disappearing. According to the Restaurant Opportunities Centers United, a pro-labor research and advocacy group, a majority of the six-million-plus tipped workers in the U.S. work in the food industry. It's one of the country's fastest growing job sectors, but also contains some of the lowest-paid positions, including tipped service work.

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Americans' average tipping practices can be hard to track, but banking companies and financial transaction companies can provide at least some data when it comes to how much their customers tip, and in what states servers bring in the most.

Average tipping by state

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According to data compiled last year by the payment service company Square, customers in Alaska, Arkansas, and North Carolina tend to leave the highest average tips in the country, while Delaware, Hawaii, and South Dakota residents leave the lowest amount. The numbers represent all card transactions in which a customer might leave a tip — like taxi rides or small businesses — but it's safe to say that a majority of tipping transactions probably occurred within a service industry setting. The company also ranked how customers in different states tip at food trucks, cafes, and restaurants.

Around the same time, the online banking company Simple also compiled the tipping habits of its customers in service industry settings, categorizing them by state, city, and even time. That analysis resulted in at least a few similarities, but also shed light on (probably predictable) tipping habits of customers during the week and time of day. Simple found that customers tipped more over the weekend, and also more the later (or earlier) the hour.

Tipping habits by hour

Average tipping across the U.S. can be hard to track. The Bureau of Labor Statistics includes gratuity in its hourly wage estimates, and many workers don't report how much they get on the side in the first place; the Internal Revenue Service estimates that unreported service industry tips amount to $11 billion in annual tip income.

One reason tips can be an inherently difficult to thing to quantify on a national level is that many customers (and servers) prefer hand-to-hand cash transactions. Moreover, some have suggested that people using electronic methods for transactions tend to pay more on the tip line. Still, electronic tipping data offers instructive insight to where—but not necessarily why—the country's best tippers live.

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