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How to Tip: How I Upgraded My $100 Room to a $500 Per Night Suite

Tipping is one of the most important skills that you will ever have. Tipping is also called a gratuity, and the etymology of it means that you are giving somebody money as a thank you for the service that they’ve done to you. You are essentially giving a legalized bribe to smooth the interaction between yourself and the other person. Tip generously, but only tip people that can affect your experience.

1. When Do You Give a Tip?

Always give money at the beginning of the interaction.

Let’s say you go to a restaurant and you have a waiter that will be serving you and bringing you food. From the waiter’s point of view, he has the expectation that at the end of the service you will leave a good tip. And what happens if you’re a lousy tipper? The waiter would have jumped through all these hoops for no tip or a lousy tip at the end. If the waiter has the vibe that you’re not going to be a good tipper, he won’t serve you well.

If you give a tip as soon as you are seated, there is no longer the expectation that you will tip well. There is an obligation for good service because you have paid him already. The relationship between you and the waiter is not of hope, but obligation. He’s going to do everything necessary to take care of you because he’s got that money in his pocket.

2. Who Do You Tip?

Tip people who can change your experience.

A lot of people show up with a roll of bills and shower everybody with money. If you’re going to be slipping $10 or $20 to everybody you encounter at a hotel, for instance, you’ll have nothing to show for it.

Suppose you arrive at a hotel in a taxi from the airport. On the journey, you give $10 to the taxi driver, $10 to the porter, $10 to the bell hop, $10 to the concierge, and $10 to the desk agent. You blew $50 on the journey from the airport and you have nothing to show for it. You tipped five people, when there was only one person who could change your experience at the hotel that was worth tipping.

Who can change the experience at the hotel? The desk agent can! Let me give you one specific example. I was in Munich a year ago for vacation, and I booked a standard room for $100 a night. As I was checking in, I slipped $200 to the desk agent as he took my credit card. The guy took the $200 and upgraded my room from a standard room to a suite. The difference in the price between the standard room and suite was $500 a night. Given that I was staying there for 7 nights, I was getting more than $2,800 in value for a $200 tip.

That, my friends, is a great investment. Everyone is happy. You’re happy because you now have a suite instead of a standard room. The desk agent is happy because he’s got $200 in his pocket.

3. How Much Do You Tip?

10 or 20% upfront of the total cost is sufficient.

If your meal is going to be $100, $20 should be fine. If you’re paying $800 for 5 nights at a hotel, $100 or $200 should be fine.

You want to tip in increments of 10 and nothing less than 10 of that currency. A $5 or $1 tip is kind of cheesy, and increments of $10 look better psychologically.

4. How Do You Tip?

There’s no trick to it – you want to do it discretely.

If you’re tipping a waiter, have the bill in your hand, holding it downward. As you go to shake your waiter’s hand, you can slip him the money discretely.

If it’s even in a situation where you need to use your credit card to pay for something, you fold your money and put it against your credit card as you hand it to a booking or desk agent.

5. Why Is This Important?

Tipping is important because it teaches you the skill of applying money strategically.

A lot of times, people think that you need a great deal of money to have a great experience. That’s not always true. Sometimes, very little money applied correctly, at the right moment, is only what’s needed. Think of the trip that I took to Munich where I spent a whole week at a luxury suite. It was a magical experience, and all it cost was a couple hundred Euros.

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