Buying and paying in the USA

The American way of money

    Currency units in the USA

    The currency of the USA is the best known currency in the world. The United States Dollar is known worldwide, and the one-dollar billll or one dollar note is the world's most recognized currency note. It is also  a banknote that can be used, officially or unofficially, in many countries worldwide.
    Nevertheless, visitors to the USA are warned to take care with US currency notes. Unlike most other countries, where notes of different value are clearly differentiated between by the use of different colors - blue notes, red notes, green notes etc - and different sizes,  US dollar bills are all the same basic color, whether a $1 bill, a $10 bill a $100 dollar bill, or other. All US banknotes are printed in greys and greens, with smaller distinguishing differences, and they are all the same size. So visitors are advised to take care! Even if more distinguishing features have been added on more recent notes, it is still easy to confuse a $1 bill and a $10 bill, specially if you are not familiar with the different heads engraved on different notes.
    Few visitors to the USA can spontaneously distinguish between the three buildings shown on the reverse side of the $5 the $10  and the $20 bills, which are the Lincoln Memorial, the US Treasury building, and the White House - three neo-classical buildings with their porticoed facades.
    As for cents... well the dollar - along with other currencies - has lost so much value over the years that cents are largely irrelevant. Prices are often given in dollars and cents, but 1 US cent, sometimes called a penny, has little value. It's worth less that one Euro cent, less than a British penny, and only worth about 1.5 JPY.
    Visitors need to know the common names of US coins which are: a 5 cent coin is a nickel, a ten cent coin is a dime, and a twenty-five cent coin is a quarter. As for dollars themselves, they are commonly known as "bucks", so ten bucks is slang for ten dollars.

    Paying for things in the USA

    For visitors to the USA, the simplest and generally easiest way to pay for things is by credit card, debit card, specifically Visa, Mastercard or American Express, or with a mobile payment app, such as Googlepay, Samsungpay, Paypal or Applepay. It is also advisable to have some cash available for small payments, though in most cases cash is not necessary. To obtain cash, the easiest way is to make a cash withdrawal from an ATM (hole in the wall, cash dispenser); take out as much cash as you think you will need for a few days – including cash for tips... see below – since your bank or credit / debit card company may charge a fee each time you make a cash withdrawal, and the distributing ATM may add a cash withdrawal charge.
    Foreign visitors and tourists cannot use the "cashback" option provided by many stores, unless they are using a credit card or debit card issued in the USA by a US bank. Cashback cannot be offered on cards issued by banks in other countries.

    Prices, taxes and tips

    In the USA some things are done differently to the way they are done in other countries, and pricing is one of them – which can be extremely confusing for visitors!
    In Europe, Japan and most other countries, what you see is what you pay... WYSIWYP . So if a price tag says 100 Euros or 1000 Yen, that is the price you will be charged. Not so in the USA... or at least, not in most parts of the USA!
    In the USA, if a price tag says $100, you may be charged just $100 in the states of Alaska, Delaware, Montana, New Hampshire, and Oregon.... but in every other state "sales tax" (the US equivalent of VAT) is then added to the bill. This varies from 2.9% in Colorado or 4% in New York, to 7.25% in California. So your $200 designer tee-shirt bought in Hollywood will actually cost you $214.50...  at least..... unless they offer you a discount.
    However, if that $200 bill were not for a tee-shirt, but four meals in a restaurant, you are really expected to pay at least $240, to include not just the California sales tax, but also the tip.
    In most parts of the world, a tip is something that you add voluntarily to a bill in recognition of good service. If the service is poor or basic you don't leave a tip; otherwise you tip what you want, maybe around 10% of the bill.
    Not so in the USA. In theory - and legally speaking - tipping in the USA is optional. In practice it is pretty much compulsory in restaurants, taxis, hotels with staff service, and other places too.  In the United States, tipping is part of the culture, and the recommended tipping amount in restaurants is 15% to 25%. In many cases the amount you are expected to tip will be shown on the credit card terminal when you come to pay... you may be offered a choice between a 20% tip and a different level of tip. You may also choose not to tip by credit card, and then slide the server of the counter clerk a few dollar bills.
    Some stores may also ask you for a tip, but this is not essential, specially if there is no service.

Fast food restaurants

    The exception to the tipping rule is the fast food sector. In restaurants like Burger King or McDonalds or Wendy's, where you pick up your own food and take your tray to a collection point after eating, no tips are expected. If you pick up your own food, but someone clears your tray away after, then it is considered normal to add a small tip, say 10%. If you order at the counter, but then someone prepares your food and brings it to you, and clears it away after, then tipping at 15% or more is considered normal.
    Alternatively, there may be a "tip jar" at the counter, where you can put a cash tip on leaving the restaurant. These are increasingly common. There are also some restaurants which state "gratuity included"... the American equivalent of "service included" or "service compris" in other countries: in this case there is no need to leave a tip... though some people will still do so out of habit.

America's tipping culture

    Why does one need to tip in so many places in the USA? The answer is simple: poor wages.
    The USA may be one of the richest countries in the world, but it is also one of the most unequal among the world's developed nations. Restaurant staff are not usually very well paid; in many cases they are paid below the minimum wage, even well below the minimum wage, because they are expected to complement their takehome pay with tips.
    It is quite legal for restaurant owners in the USA to pay their servers well below the minimum wage, if they are confident that their servers can make up the difference from tips – which is generally the case. Waiters in restaurants and bar-tenders may well depend on tips in order to earn a living wage.
    This is very different to western Europe, for instance, where staff must be paid at least minimum wage, and tipping is seen as a recognition of good service.
   
   

For more background to the USA.....

► Book / ebook     A Background to modern America -  people, places and events  that have played a significant role in the shaping of modern America. A C1-level Advanced English reader for speakers of other languages, and anyone wanting to  learn some of the background to today's USA.  Twenty-two texts, with vocabulary guides and exercises.