A Survival Guide for the Holiday Tipping Season

The holidays are a time when many Canadians feel compelled to show extra appreciation to the people who add value to their lives, like the newspaper delivery person, dog groomer or a child’s piano teacher.

But in a season full of high inflation and pressure to spend, factoring in extra cash tips, gift cards and presents can leave you feeling economically stretched.

Holiday spending and tip-flation

More than 4 in 5 Canadians (88%) plan to purchase gifts for friends and loved ones this holiday season, according to a survey of over 1,000 Canadian adults conducted by The Harris Poll on behalf of NerdWallet Canada. Among them, 48% plan to spend $500 or more on those gifts.

But the higher cost of some goods and services has many looking to reduce holiday spending, with 35% of holiday shoppers saying they will be spending less per person this year compared to years past, according to the NerdWallet survey.

When it comes to tipping specifically, the Angus-Reid Institute[1] found earlier this year that Canadians are also growing weary of ‘tip-flation,’ with 6 in 10 Canadians (62%) saying they’re being asked to tip more and 4 in 5 Canadians (83%) saying too many places are asking for tips these days.

Who to tip this holiday, and how much?

So, with tip-fatigue, overstretched budgets and holiday etiquette at play, how can you make decisions about who and how much to tip this season?

It’s common to give holiday tips to service providers with whom you interact regularly throughout the year — and they are often larger than the amount you would usually tip.

According to the etiquette experts at The Emily Post Institute[2], suggested holiday tip amounts for service providers include:

Beauty salon/barber: Up to the cost of one visit.
Pet groomer: Up to the cost of one session.
Newspaper delivery person: $10-$30 or a gift.
Trash/recycling collectors: $10-$30.
Yard worker: $20-$50 or a gift.
House cleaner: Up to the amount of one week’s pay or a gift.

But if rising interest rates and inflation have hit your budget hard in 2023, don’t feel pressured to overextend yourself by giving large cash gifts. It’s possible to show appreciation to service providers without feeling financially exhausted by the new year.

How to tip without breaking your budget

1. Make a plan

Make a list of individuals you would like to tip this holiday season. Start with those you have the closest personal relationship with — perhaps your house cleaner or your dog walker — and work down to those you interact with occasionally or only around the holiday season, such as the package delivery person.

Detail how much you plan to spend on each person and the type of tip you’d like to give, whether it’s cash, a gift card or an actual gift.

2. Decide if your plan is realistic

Holiday tipping should never require you to go into debt now or in the new year.

Covering everyone on your list without overstretching your finances may ultimately mean scaling back on the amount per person or considering whether everyone needs to make the cut.

Alternatively, if a tighter budget means tipping in cash is out of the question for everyone on your list this year, several non-cash options can step in as worthwhile substitutes.

3. Think beyond cash

Depending on the profession, a cash tip may not be necessary or even permitted. For example, teachers, couriers or postal workers may only be allowed to accept small gifts.

In these cases, or in situations where a personal touch might be appreciated, consider making gifts such as ornaments, baked goods, crafts or even just writing a thoughtful note.

If you want to thank a person you know fairly well, consider a practical or personal gift, suited to their profession — nice, warm gloves for your dog walker, for example.

Even store-bought items like a box of chocolates or a bottle of wine, if appropriate, are often appreciated and usually less costly than a cash gift.

4. Redeem loyalty rewards

If you have accumulated points from a rewards credit card or loyalty program, like Scene+ or PC Optimum, now may be the time to put these into action.

Cashing in rewards points for gift cards or redeeming them for small gifts can be a budget-friendly way to cover some of the people on your holiday tip list without having to dip into your own bank account.

5. Get charitable

If you know that your recipient is passionate about a particular charitable organization, you can also consider making a donation in their honour as all or part of their holiday gift or tip.

This is often a win-win-win — the charity gets a financial contribution, your recipient knows their gift is going to a meaningful cause and you receive a donation receipt that may help you claim a tax deduction.

Survey Methodology

This survey was conducted online within Canada by The Harris Poll on behalf of NerdWallet Canada from October 3 – 5, 2023 among 1,021 Canadian adults ages 18 and older. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 3.6 percentage points using a 95% confidence level. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact Bria Weaver, [email protected].

“Holiday shopper” refers to Canadians who plan to purchase gifts during the 2023 holiday season. “Holiday season” refers to the period of time between October and the end of 2023.