Originally posted by Ginger Tea
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"-san" is more formal, and usually used either when speaking to someone with a higher social standing, someone whose social standing is unknown, or social situations (such as corporate settings) where politeness is a must. The lack of any honorific at all is considered to be extremely informal - it's implying a casual relationship between the speaker and the object of speech.
If the two people aren't close friends, failing to use an honorific is a breach of etiquette.
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