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Should Restaurant Servers Pay Credit Card Fees on Their Tips?

Filed in archive General by Justin McHenry on September 19, 2008

I came across this article, which brought up a question I've seen asked a few times before:
Diners now use plastic 80 percent of the time at fine-dining establishments, 60 percent of the time at casual restaurants and even 25 percent of the time for fast food, according to the National Restaurant Association.

Restaurants have to pay fees on every card transaction, usually 1.8 percent to 3.5 percent of the bill. That includes the tip if it is added to the receipt. Instead of covering the fees on those charged tips, some restaurant owners are making the servers pay, deducting that small percentage from the gratuities left on credit cards.

Is it reasonable for management to ask servers to pay their share, or are waiters and waitresses being shortchanged?

Personally I think it is completely unreasonable to ask a server to pay a portion of his/her tip to management in order to pay for credit card fees. Servers are not owners, and credit card fees are a cost of doing business for the owners.

In addition, as I have railed away about before, restaurant owners have a sweet deal when it comes to their tipped employees - they pay them a pittance and rely on customers' tips to be the bulk of their wages. If business is good, everybody wins. If business is bad, the restaurant owner pays very little to have the servers hang around an empty restaurant.

To force servers to pay credit card fees on their tips is, to me, an insult. If they want to give the employees an ownership stake in the restaurant, then you can make a case that the employees need to bear some of the costs of doing business. Until then, credit card fees should be a cost of doing business for the owners, not a cost of employment for servers who already end up with lousy wages if their restaurant/bar isn't packing them in night after night.

What do you think?






Permalink: Should Restaurant Servers Pay Credit Card Fees on Their Tips?
Tags: money  credit  card  2008  2007  credit+card  card+fees  their+tips 

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