I recently read that many restaurants where card tips are left, deduct a service charge for this on top of the card charge before they give it to the server. They say it is to cover costs, so the server get much less of a tip if it's left on a card. Not all places do this, but some do so it's not illegal, but doesn't say much for big companies that charge their servers to get their tip. A huge chain in the UK, Pizza Express has admitted to doing this, however they say it's because of tax, but many people can declare the tax themselves. "There is a small admin charge of 8% on tips made by credit card. The remaining 92% is split 70-30 between your waiter and the kitchen team.We have a legal duty to pay tax, and so do our waiters. We have to make sure that all credit card tips and service charges are taxed. We use a tronc system for this. The 8% charge is what it costs us to run this." There was a protest by the servers as a card charge is usually between 2-5%, so the company are charging the servers to process their tips. Fair or not? If I do go to places I tip in cash if I can, because it's not fair on servers.
Thanks for posting this Theo, I had absolutely no idea that this went on. OK, it might not be illegal but it really is unfair to the servers. They don't make much as it is. I'll make sure to have some change on me next time we eat out.
Thanks for posting, Theo. I'm sure I've heard this somewhere and this was ages ago. So as a rule, I always try to have enough change on me to use towards tips when we go out eating, even if I intend to pay on my card. It's unscrupulous and just heartless what some of these restaurant owners do!
I've never heard of this, so I'm not sure if it's applicable also in the United States. I don't go out to eat much anyway, but am going to look into this. I usually do leave a cash tip when I dine out, except when I get take out delivered, sometimes I will add the tip in with the food and delivery charges. I've always figured cash in pocket / on hand is best for those who don't make much money anyway, but that was simply on principle, figuring a bird in the hand is worth two in the bush.
I'm fairly certain this is illegal in the US, but that doesn't stop restaurants from still doing it. Legally in the US, restaurants are not allowed to take servers tips and disperse them to other non-wait staff, such as cooks. There are laws regarding tipped employees which allow restaurants to pay them below minimum wage as long as their tip income brings their total wages above the minimum wage level. That's how they get away with paying their servers $2-something an hour. If the server does not make enough money in tips on a given evening to total out to the minimum wage per hour, then the restaurant is responsible for paying the difference to them. The laws are fairly explicit in that the restaurant may not withhold a servers tips nor engage in "tip pooling" which is demanding that the server give a portion of their tips to other employees such as bussers, or cooks, etc... What the restaurants are basically doing is trying to avoid paying anyone higher wages. So they are stealing from the servers to pay the other employees a little more, because they don't want to raise their existing hourly wages. When I was a server, I was told that if we didn't claim at least 8% of our sales as tips each night (regardless if we actually earned that much or not) that the IRS would come after us with an audit. In reality they were just trying to scare us into claiming 8% so they didn't have to pay us the difference to bring us up to minimum wage. Talk about scumbags. In addition, I never knew that the tip pooling they were making us do was illegal, and we were not obligated to give away our tips like that. The sad thing though is as a server if you refuse to do that, you'll also piss off your fellow employees who are used to receiving that money, even though they are not entitled to it by law from the servers.
Many years ago I worked as a server and did not have to deal with anything like this but things have changed. It is not fair to the server that is already not making that much money to have to pay a service charge because the company he is working for does not want to pay it. I mostly pay in cash and will make sure from now on I pay my tips in cash.
Ditto, thanks for posting @Theo because I really didn't know this at all. Even when I do pay by credit card, I often tip the waiter with cash regardless. I know a few restaurants that take the tip directly from the bill and I always wondered how that money would be split. I know nowadays that servers are usually tip based, meaning that they often get paid lower than minimum wage and tubs are usually what they get paid in. I did know that some restaurants compile their tips and result it afterword but I think that's super unfair especially if someone isn't pulling their weight. Now, I see that the system is even more unfair than I though, seeing as the split of tips is a ridiculous percentage.
We always tip the server with cash because that is the norm here. And the amount of tip is around 5% of the bill. So when we dine out with the family, our bill normally reaches 3,000 pesos and our tip is 150 or 200 pesos depending on the kind of service rendered to us. But when the server is kind of rude, we really dare not to leave a tip even of coins.
It's not fair to rob waiters/waitresses of their tips. If the hotels want to charge anyone a fee then it's their customers who should fork out that fee so the waiter gets the tip they desired to give. All these fancy "digital" payments are getting to be a nuisance.
This is pretty unfair. When people tip, they tip the waiters or waitresses. It's unfair to take that away from them. I definitely didn't know this happened, so I will definitely only tip with cash from now on. I rarely tip digitally anyway, because tipping with cash is just a little easier. This split of tip percentage is absolutely ridiculous, if you ask me. Very unfair.
