Guidelines for “tipping” in Panama

Blog by Joy Huppe

tip

Tipping, in general, is a curious phenomenon. It is a direct exchange between the consumer and service provider which almost everyone engages in at one time or another. Additionally, tipping represents a major source of income for many who work in the service industry, and as such, it is a consumer behavior of enormous importance in the economy. Lastly, tipping is one of the few areas of the economy where the exchange is dictated by informal rules of custom rather than explicitly stated procedures. Factor in that tipping norms vary cross-culturally, and are influenced by individuals’ perceptions and awareness of this custom… and you may end up scratching you head, wondering whom to tip and how much.

It should come as no surprise that tipping etiquette in Panama is different than say the U.S. (where tips are expected/implied), or from say, New Zealand (where tips are few and far between.) So how should you handle tipping when visiting or living in Panama? The answer we resonate with the most is “listen to your heart” and give how/what you feel is appropriate. You cannot go wrong when you give from the heart. However, in matters of money, the heart usually takes a back seat… and this is where suggested guidelines can be helpful.

Tipping has evolved over the years. While the exact origins of tipping are not known, the custom dates back to at least to 18th century England when collection boxes with signs stating “To Insure Promptness” (TIP) were placed in inns and coffee houses for people to deposit coins. At its core, tipping is simply a monetary incentive given to invoke or reward exceptional service. Overtime, in certain countries, the custom of tipping has become mandatory and/or relied upon in certain industries to actually meet minimum wage requirements. For example, it is commonly known in the US that restaurant waitstaff earn much less than minimum wage because outside tipping is factored into their end totals. Another common practice for restaurants is to include the tip as part of the bill when serving parties over a certain size.

In Panama, the customs on this are a bit looser, but similar to the US.   You may or may not see a “propina” added to your bill, regardless of party size. Technically this is not legal, but this does not stop many area establishments from engaging in this practice. Use your judgment when dining out how you would like to handle this, while keeping in mind the following. It is commonly required for waitstaff in Panama to pool their tips, of which they will only get a certain percentage, regardless of the quality of service provided. Therefore, every little bit counts, especially if your server went above and beyond the call of duty. Other advice is if you are paying with a credit card, you should consider leaving the tip in cash. This is because, unfortunately, it is also common for restaurant owners to pocket credit card slip tips and not reimburse their servers.

A standard amount for tipping in a restaurant here in Panama is 10%, and tips are considered a reward for good service, rather than an obligation. Keep in mind that service workers here in Panama earn staggeringly low wages, so tipping is a great way to help supplement that and get your money into the hands of people who actually need it.   However, if you received truly horrible service, you should speak with the owner/manager to let them know, and whether or not you decide to tip after that is up to you.

So far we’ve talked about tipping in relation to dining out, yet there are countless other instances where tipping is appropriate. Spas (massage, hair cut/color, etc.), hotels (room cleaning, baggage handling, etc), and tour operators are also incentive-based industries. For spa services it is customary to tip at least 10% of the total cost of the treatment. Of course, if you received exceptional service, you may want the tip to reflect that. An appropriate tip for hotel porters is suggested to be .50¢ – $1.00 per bag, while $1 – $2 per day is suggested for housekeeping.   For tour guides it is suggested to tip $5 – $10 per day, depending on the duration of the tour and the quality of the service.

Interestingly, it is not customary to tip taxi drivers here in Panama. However, you may decide to round up your fare. Or, if you have a favorite driver you rely upon, it wouldn’t hurt to slip him a little something.

Again, when in doubt, erring on the side of tipping is always appreciated!   Don’t worry, over-tipping is not an insult. Also, a simple smile and praise go far to reward someone for a job well-done. Honest appreciation is taken to heart and remembered.

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Believe it or not, there is a bit of controversy when it comes to tipping outside of one’s home country. Some people are of the opinion that tipping can be detrimental to the local economy of the country they are visiting. While there is a point there (think a waiter earning more than say, the chief of police), it is important to note that the Latin American countries have the most inequity in the entire world. Why would it make sense to not give to those who don’t have?

In Panama, there is some controversy surrounding the bag boys found in most of the larger supermarkets. These boys are usually school-aged and not legally employable. They don’t earn any money, other than what they may collect in tips for bringing customers’ bags to their cars. It is not uncommon for the boys to be rewarded with $1.00 by every “gringo” who utilizes their services. This can add up quickly and be quite a lucrative business for a school-aged child. Some are concerned that this may discourage them from actively pursuing higher education and instead becoming accustomed to “easy money.” Others hold the opposite viewpoint that money earned will help contribute to the boys’ families income and overall quality of life. Despite differing opinions on this topic, the choice to tip remains personal and entirely optional… though you can be sure that the money is appreciated!

Here at Casa de Montaña, we value our hard-working staff and encourage tipping for good service. For our guests’ convenience we’ve placed small envelopes in each of the rooms for tips that then get divided between our house-keeper/chef extraordinaire (Veronica) and house-keeper / all-things-handy-man (Nicolas). We strongly believe “what comes around goes around” and also that “paying it forward” makes a difference, especially here in Panama!

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