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(Some sage wisdom regarding tipping in Cuba, I DID NOT write this, I am simply sharing as it is an, often, discussed topic among those of us who visit the beautiful island and her people.)

First may I say thank you so much to all of you who, through your generosity do so much for Cuba.  Your gifts, your gratuity and most of all, simply your presence here on the island.

I just read a thread about tipping, and which currency is the best for the Cuban people.  

Whether it is a gift, a Loonie, an American dollar or a Euro, a gratuity is a gratuity.  There are, however, a few things you should consider, if you are trying to decide how to do so.

For the most part this topic evolves around convenience.  Convenience for you, and convenience for the recipient.

To begin, you must understand that there are multiple exchange rates in Cuba. The official bank rate, and the informal exchange rate.  There is a big difference.  No one knows this system better than the Cubans themselves. The informal rate is twice the bank rate.  So, when you tip, the value of that tip will be impacted by that exchange rate.  Here are some things to consider:

• Tipping in “U.S. Dollars,” is convenient for the Cubans, depending how effectively they exchange that dollar, they may net more proceeds.  Inconvenient for a Canadian because Canadians take a hit on the exchange rate., so with that said, a tip of one to two U.S. dollars is still a very good tip.
• Tipping in Canadian loonies or twoonies is not a good plan as Cuban banks do not accept the coins, this renders them, pretty much useless to Cubans unless they can find another Canadian willing to exchange them for bills.  This is kind of thoughtless as it puts the onus on other Canadians to haul, sometimes, large amounts of the coins, back home.  
• Tipping in Pesos, is good for both parties but only if you understand the informal exchange rate.  If you base the tip on the bank rate, you are not doing the Cuban any favors.  If the tip is based on the informal rate of exchange, then the Cuban will be receiving a more realistic tip. Most tourist have no way of knowing that informal rate.  For folks on a short one week trip, this is very inconvenient because they have to first get their money exchanged, do so at a competitive rate. Tall order for a first timer.  Going to the bank or a Cadeca is a no, no!
• Your Cuban friend would like you to tip in “Hard Currency” for multiple reasons,
  • First and foremost is convenience.  They can choose how and when to exchange that money.
  • They may leave it for weeks or months to exchange depending on their needs and their situation.  
  • They often benefit (sometimes not) from your lack of understanding of the current exchange rate, you might be shorting them, or you might be over tipping.

It is, however, very important to understand, Cubans working in the tourist trade, are the wealthiest people on the island, maids, waiters, bartenders, entertainment staff, bus drivers, taxi drivers for example. Those of us who live here see the cycles.  Relationships are everything.  A maid at the hotel has multiple relationships with the new arrivals this week, and next week, and week after week, everyone has a friend who is a bartender that took them to their house on his day off for dinner.

No reason to be put off or angry, it is an industry after all, regardless, you are helping a fellow human being.

My wife and I live here, we tip, and we tip often.  Generously.  We tip in Pesos at the informal rate.  Currently 340 to 1 U.S. dollar.  We bring U S. dollars because even with the double flip CDN to USD and then USD to Pesos the American Dollar goes way further, as long as we mentally factor in how much we are tipping it works fine.

I know many Canadian tourists who visit the resorts and tip weekly so that they can use a five or a ten dollar note.

I know others that tip with gifts.  However, depending on the situation these gifts are often exchanged (Sold), in order to convert the gift to cash. Thankfully there is an army of resellers that take care of that so that the maid can convert those running shoes into dollars.  Those hair clips and tee shirts into pesos.

In closing, there is no right way or wrong way.  There is what is convenient and what is not.  Your Cuban friend will be happy that you helped them no matter how that gratuity is shaped, BUT, I can say to the short term turn around guy, you will never go wrong with a fist full of U.S. one dollar notes, other than the initial exchange (if you are not From the USA) one dollar U.S. bills are easy to calculate quickly. They are convenient for you and convenient for the Cuban.

One more closing point.  Restaurants in Cuba are, (like Miami) starting to add gratuity (10 percent) to the restaurant bill.  It DOES NOT always show as a line item, but it has been added to the total.  Always manually total your bill to detect a hidden tip and avoid doubling up.