Should Restaurant Servers Pay Credit Card Fees on Their Tips?
Filed in archive General on September 19, 2008
© rachaelvoorhees
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?
© rachaelvoorhees
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?
Tags: money credit card 2008 2007 credit+card card+fees their+tips
Trackback: http://www.creative-weblogging.com/publish/mt-tb.pl/134295
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Vote for Should Restaurant Servers Pay Credit Card Fees on Their Tips?:
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Rating: 7.33 out of 3 vote(s) cast.
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Response from:
Jerry
(09/20/08 10:11pm)
I think it is an outrage to expect the waiter/waitress to pay the credit card fee! They are already grossly underpaid! Shame on the restaurant owners that require that! I always leave my tip in cash on the table, and now I feel much better about doing that!
Response from:
clemens
(09/21/08 8:04pm)
Servers get a raw deal in most ways. This one should be one that owners bear themselves.
Response from:
glenda
(12/21/08 1:53pm)
I am a waitress and work at a restaurant that does charge us servers the fee for credit card tips, I think its a rip off, and I wonder if its legal? I guess it is if they do it. Greedy owners!
Response from:
Kelly
(01/29/09 6:48pm)
I have to disagree. The servers at our restaurant make great tips and we do pay the fees. We have a lot of expenses with this being one of them. It is a difficult business to be in. Servers are typically not college grads and are going to school or serving as their career. Without an education, I don't think making $150-$200 in a 4 hour time period is too shabby. I don't think paying 3% of the credit card tip is too much.
Response from:
tower defense
(05/05/09 4:13am)
The servers at our restaurant make great tips and we do pay the fees. We have a lot of expenses with this being one of them. It is a difficult business to be in. Servers are typically not college grads and are going to school or serving as their career.
Response from:
ehpete
(08/22/09 11:16am)
The company I work for (almost 7 years now) just started this practice, without any comment or notice. I'm very upset. In addition they DEMANDED that all shortages be included with every shift close. It is not the dollar amount persay. It's the moral and ethical of these issue that really offends me.
Since the first of the year in my shifts (3-4 per week) I have rung over $86k in sales and made $16k in tips. Including every overage and shortage I'm -$1.67 (-0.194% of sales). I have never before put in for a shortage nor taken an overage. But if I paid every shortage they would have recieved an extra $350 from me (overages plus shortages)
This past week in noticed a payroll deduction for "cash shortage" $3.64. I inquired about it and found it was for our "tip refund" to "offset credit card fees".
I really wanted to ask; so are you gonna start deducting a portion of the electric and water that I use while servicing YOUR customers????
At one time I owned my own restaurant and accepted the credit card fees as part of MY cost of buisness NOT my employees.
Owners don't have to pay servers "minimum wage", overtime, sick leave, health benefits, etc. Your emplyee expense associated with severs is minimal. MOST severs live day to day and certainly don't make nearly as much as the owners of the business they work for.
If you are that worried about the bottom line, find another business to be in.
Since the first of the year in my shifts (3-4 per week) I have rung over $86k in sales and made $16k in tips. Including every overage and shortage I'm -$1.67 (-0.194% of sales). I have never before put in for a shortage nor taken an overage. But if I paid every shortage they would have recieved an extra $350 from me (overages plus shortages)
This past week in noticed a payroll deduction for "cash shortage" $3.64. I inquired about it and found it was for our "tip refund" to "offset credit card fees".
I really wanted to ask; so are you gonna start deducting a portion of the electric and water that I use while servicing YOUR customers????
At one time I owned my own restaurant and accepted the credit card fees as part of MY cost of buisness NOT my employees.
Owners don't have to pay servers "minimum wage", overtime, sick leave, health benefits, etc. Your emplyee expense associated with severs is minimal. MOST severs live day to day and certainly don't make nearly as much as the owners of the business they work for.
If you are that worried about the bottom line, find another business to be in.
Response from:
tips
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Response from:
blogcritics.org
Every year David Finkel and Diane Kennedy convince a handful of people that it would be a good idea to
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