Lots of discussion on this topic. Check out this thread to start: http://www.cancuncare.com/forum/viewtopic.php?t=21887 Generally speaking, pesos is the local currency and easier for the locals to work with. Dollars are acceptable as well.
You tip the people that provide a service just like anywhere else. I think the only exception is with the taxi drivers, total price is negotiated prior to the trip.
I tip in MX Pesos and here is why: Tipping is a thank you to people who did right by you. I have spoken to many locals who have told me that while yes, they receive dollars and often can spend them in Cancun, there are several establishments that will not accept anything but MX Pesos. Therefore, in order to save the person I am tipping from experiencing that kind of hassle, or even worse, from having to wait on line at a bank in order to exchange the dollars for pesos on their day off, I simplify matters by tipping in MX Pesos. 212eric
Working with tourists, some tip in dollars, and when the time of sharing comes, the staff (Mexicans) usually keep the dollars for themselves, so I guess it is very appreciated... maybe because there is a grey market, but I know nothing about it. I leave with my few pesos :cry:
I don't think they care if you tip in dollars or pesos, a tip is a tip But, I do have friends down there who have told me in the past, if they can afford to, they will save their U.S. dollar tips until the exchange rate is really good and then they'll go exchange it for pesos.