CNBC Video on How to Save Money When Tipping Gets Big Backlash

By Zachary Stieber

A new video that includes a tip on saving money while tipping at restaurants is getting a big backlash.

Yahoo Finance host Zack Guzman produced the video for CNBC, which promoted the approximately two-minute clip with the tagline, “This simple tipping trick could save you over $400 a year.”

Guzman said that tipping “is a seemingly insignificant decision” but that it can add up over time.

He said that it’s customary to tip 15 to 20 percent, citing experts at the Emily Post Institute. The institute was created by etiquette author Emily Post and says it shares “etiquette advice for the modern world.”

The simple trick is tipping on the pre-tax total, versus the post-tax, according to Lizzie Post, who works at the family-run institute. “From an etiquette standpoint, tipping on pre-tax is absolutely fine. You don’t have to tip on what you’re already being taxed on,” she told CNBC.

Two other tricks, according to Guzman, are calculating the tax by moving the decimal point over one—for instance, for a bill of $108.88, the tip would be $10.88—or by doubling the tax. Both methods could save you money, he said.

Many people were not pleased with the video, which has nearly 4 million views in about 36 hours. The post sharing the video on Twitter was filled with comments of people saying tipping pre-tax wouldn’t be fair to servers.

“Servers work hard and get paid FAR LESS than minimum wage in most states. Tip 20 percent or eat out less,” said one user.

“I’ve saved thousands of dollars eating out by simply robbing my waiter after their shift ends,” added another.

“Finally, I can exploit low wage workers on my way to a sweet profit, just like millionaires and billionaires have been doing forever! Thanks CNBC!” said one.

Others shared slightly different tips for tipping.

“Except when a gratuity has already been added, I just multiply the final, post-tax total by 1.2 and round up to the nearest whole dollar,” said one.

“Tip 20 percent when you eat out unless the service is terrible, then 15-18 percent. Tip at least 10 percent when you order take out or delivery,” added another.

“Move the decimal place over by one, and multiply by two. That’s 20 percent, what you should be tipping for good service,” added another.

Others questioned why servers aren’t paid a minimum wage and instead rely largely on consumers for their pay.

“Why do we allow restaurant owners to pay the servers $2? They should be paying the minimum wage or better. Restaurants should not be expecting employees to be at the mercy of the customers. Airlines don’t expect you to tip flight attendants,” one user wrote.

Guzman created seven posts on Twitter to address concerns about his video, saying that Americans tip far below 20 percent.

“Calling out a hard working person for tipping less than 20% is just as unfair as a server ‘getting screwed over’ for the services he or she provided. Denigrating how much someone tips is an easy, privileged take. It also misses the point I make in this video’s article,” he wrote.

“As I lead with in the article, the better question to ask would be why are working class people being asked to subsidize a company paying its servers below minimum wage? Why does federal law allow restaurants to pay servers as little as $2.13 an hour?”

He later wrote that the reaction to the piece proved that people think about their tips.

“Not just HOW MUCH they tip, but also WHY they are tipping. Hopefully that might lead to better outcomes for all,” he concluded.