restaurants override your undertip -- automatically charge 20%

[unblock]

has anyone else experienced this?

you have subpar or worse service at a restaurant and decide to tip something less than 20% of the total tab. later, you look online or on your statement and find out that your charge was run through for exactly 20% more than the tab, despite your tipping something less.

i just had this happen at 2 restaurants, and my neighbor had previously reported this happening as well.

anyone else have a similar experience?

my neighbor thought the restaurant owner took it upon himself to do this, but now i'm wondering if maybe mastercard/visa have a corporate program for restaurants where it does this automatically, calling it a 'courtesy' no doubt....

[unblock]

1. my 2 experiences

one was pizzeria uno, where service was abysmal, including our waitress going on her own lunch break without getting anyone to cover for her, leaving us abandoned.

the other was an (otherwise?) fantastic local indian restaurant where we ordered takeout. being in the restaurant only long enough to pay and pick up dinner, i didn't tip.

[fujiyama]

2. Isn't it fraud..

if they charge something other than what was said on the menu? Otherwise it should be stated explicitly on the menu or the reciept/check that a tip will be added.

I know that if a check were to state that 20% will be added to the total, I probably wouldn't leave a tip.

[unblock]

10. sure seems like fraud

though i can imagine a credit card company doing this as a 'courtesy' and arguing that more people 'forget' to leave a tip or whatever.

[BootinUp]

3. Did the receipt

have the tip included in the total? Usually automatic tip amounts apply for large parties only. I would probably call the credit card company and dispute it if the restaraunt did that without your knowledge and you gave a tip that was reasonable for the service.

[unblock]

4. i filled in the tip line myself

of course, i will dispute both with my credit card. and i will win both.

but my cynical self figures that with an automatic mastercard/visa program that automatically increases any 'tip' to 20%, this way a restaurant only actually gets undertipped when people like me follow through with actual disputes.

or non-credit card customers, of course.

[rfranklin]

5. The credit card processor cannot automatically add anything...

It's the restaurant that's doing it.

I caught one of the top restaurants in New York City doing that years ago. It was an expense account place on Park Ave. and they probably got away with it 90% of the time, counting on business people not to pay attention since it was paid by their employers.

[HFishbine]

7. Was it a large party?

Many restaurants print on their menues and/or receipts that large parties will automatically be billed a fixed percentage as a tip. As a former waiter, I'm all for this. If you weren't in a large party, then you have a gripe and you should contact your credit card company. Businesses hate charge-backs as they affect the interest rate the company is charged.

[unblock]

8. pizzeria uno was 3 people, the indian restaurant was pickup for 2

not large parties.

[NewJeffCT]

18. that can happen, but

Usually, restaurants will automatically charge 15-20% for large parties (where I worked, it was 8 or more and 15%)... but, when I worked in a restaurant, we'd often have people cross out the automatic percentage and leave a lesser amount.

[jmowreader]

22. There's a law in NC...

that they can't do the automatic-tip thing for a party of five or fewer.

And they have to put on the menu that they do it.

In Germany, restaurants put the tip on automatically--fifteen percent "service charge"--for any size party. My first night there I ate at a restaurant across the street from post and left a tip on the table. The waitress was really embarrassed.
"What's wrong?"
"Why did you leave money on the table?"
"It's a tip!"
"What's a tip?" (Not a mocking question; she didn't know.)
"Well, when you go to a restaurant, you leave money on the table to pay the server."
"No, no, in Germany they add that to the check, the owner pays us (very well, at least in the case of this restaurant) and you don't have to leave money on the table to pay us." (She wouldn't take the money I left, either.)

[Kellanved]

27. that's strange

I have never seen a restaurant in Germany (for that matter in Europe) that adds the tip automatically. The only difference between tipping in Europe and the US is that the normal upper limit for the tip is 10% in Europe.

However, the tax is 16% and gets added automatically...

:evilgrin:

[jmowreader]

29. Maybe it's only Berlin...

But on every menu in town there's a line at the bottom "prices include tax and service charge."

[Orangepeel]

9. What would the *restaurant* get out of that?

It's the server's problem if they don't get enough tips to live off of, not theirs. If they cared, they'd pay the server more than $2.15 an hour or whatever to begin with.

If the amount was changed, it was probably the server who changed it.

[HFishbine]

11. You answered your own question

By sneakily increasing the tip amount to the server, the restaurant is in a better position to keep the wages they pay low. If tips are too low, servers may actually be able to make the claim that they are not earning even minimum wage, much less a competitive wage -- a problem for the restaurant. The restaurant does indeed have an interest in this scheme.

[foo_bar]

15. see #14

This is the 'authorization' amount (according to his cc statement), which will presumably go down when the restaurant batch processes the real receipts.

[hippywife]

6. I've worked in a few restaurants

and to keep from paying an additional person to be cashier, your server is your cashier and they are the ones that run your credit card. In one place I worked, a server had been fired for adding in tips that were erroneous and to her benefit.

The restaurants only add a gratuity (tip) if the party is larger than a designated number and that is normally stated on the menu. In that case, unless you have had super-human service and want to give more, it is not necessary to tip because it has already been taken care of.

[GaYellaDawgDem]

12. I don't know if this is related...

but I have noticed with my visa check card that initially the total will show up inflated when I check it online. I've been told by waiter friends that they do this to get approval for the check amount plus a potential tip and it is entered as a pending amount (or is supposed to be) until the patron signs off on the total and the waitperson finalizes the ticket. When it actually "clears" the bank it is always back to the total I signed for...well, except that one time a restaraunt wanted to get paid twice. (That one took months to clear up!)

[unblock]

13. possibly...

so far it's only showing up online as a 'debit authorization', which is a reservation for credit, not an actual charge.

but why would they do this when the tip amount is every bit as known as to tab? it's not like i'm going to run back to the restaurant and tell them to increase the tip....

[foo_bar]

14. because the authorization comes first

before you get that carbon copy receipt with the Tip/Total/signature, they have to run the card with a projected (usually 15%) tip to see if it would be declined. That way it can't "bounce" after you leave the restaurant, unless you tip beyond your limit in which case they at least get their 15%.

Now, why do they collect the tip and the signature at the same time? Probably as a convenience to the customer, so there's only one piece of paperwork to fill out. If they already have your card (say, hotel room service) then they skip the authorization stage and just collect the tip on the first round.

[silverpatronus]

16. this is why...

i always pay and/or tip in cash at restaurants.

[mac56]

17. Amen!

I was about to post the same thing.

GMTA!

Welcome, silverpatronus.

[foo_bar]

26. it makes no difference if you only tip in cash

once you hand them a credit card, they authorize it for the bill + 15 or 20% as a "security deposit" for the presumptive tip. It can take a week for the correct amount to be posted over the initial pre-tip authorization.

[htuttle]

19. IIRC, the server gets taxed (withholding) on 20% of your bill as a tip...

...whether you pay it or not. At least that's the way I've seen it done in many places.

I believe the IRS assumes that everyone tips 20%, even when they don't.

[Lisa0825]

21. As someone who has waited tables on and off since college around Texas, no

Everywhere I have worked, we were either required to declare (or it was declared for us) 8% gratuity. The reason for this is because most places have tip-out for bartenders, expeditors, tip pool for hostess, bussers, etc, in some combination. If I started out with 15% for the night, I would have 3% deducted automatically at most places, to cover the hostess/bussers, and then would be expected to tip the bar as well. So, they could legitimately say that I was walking with 8-10% in tips. at other places I worked, it was up to me to declare, and I could declare nothing and risk the consequences if I wanted, or be honest and say 20%. Most people there declared between 8 and 10%. I have never known a place where waiters declared 20%, since most places don't even average 20%.

[MadHound]

20. Just one more reason not to have or use a credit card

I've never had a credit card in my life. And the few problems I've encountered are nothing to the horror stories I've heard from my card carrying friends. The main hassle is the time factor if you're buying something online, you have to account for the time lag in regards to sending in a check. Otherwise, I've been very happy to go through life cardless. I enjoy not having to hassle with a credit card company, I save money, and my spending habits are more difficult to track.
And if I don't have enough cash to cover a cost, oh well, I save my money until I do.

If you haven't cut up your card by now, do so. You will not only save money, but you will also deprive 'Pug donating corporations of a cash inflow.

[GiovanniC]

23. I'm With You

But to a lesser degree.

I don't use a credit card, but I do have a MasterCard debit/check card that I can use wherever MasterCard is accepted (but it's deducted directly from my checking account and there's never any interest to pay). I use it for online purchases and buying gas, mostly, but it's there if I need it.

[amazona]

24. it's fraud but must be reported in WRITING

If you try to resolve it with a telephone call, even if the credit card clerk says she's fixing it, you will end up having to pay. Federal law only protects you if you report the fraud IN WRITING within 60 days of receiving the fraudulent charge.

This type of fraud is very common, and in days gone by I always reported it in writing and got it removed. You should also report it to the restaurant management -- if there is a pattern of servers altering credit card receipts, they can fire the problem server.

Because of the rampant fraud, these days I never pay a restaurant bill on a credit card. It just takes up too much of my precious time resolving the many disputes. Also, my mom was a victim of credit card theft by a waiter -- they give you back someone else's expired card and if you notice, oops, sorry, let me get the right card, honey. If you don't notice, they have a $999 shopping spree -- credit card companies don't prosecute fraud less than $1,000 and all the thieves know it by now.

If you want further incentive, one of my friends has made extra money off credit card fraud for about two decades now and never been prosecuted.

Small "deniable" frauds like changing the amount on your ticket are only going to increase because of the lack of consequences.

Never use a credit card in a restaurant. If you are worried about theft, use traveler's checks -- AAA members get them for free.

[foo_bar]

25. no it isn't

#13 says it appeared online as a "debit authorization". The initial authorization is never for the correct amount, because it happens ten minutes before you sign the receipt with the tip amount (which isn't processed until the daily/weekly batch).

[amazona]

30. thanks missed that part

I was thinking he'd already received a billing statement and my several bad experiences have made me rather cautious.

[really-looney]

28. When the bill comes in............

Check to see when the bill comes in if the right amount was charged. I have been in the bar business for 19 years. As others have posted, they assume the tip amount until the paperwork is cleared. This also happens with hotels for things like phone bills, room service and business center activities. It puts a part of your credit line on hold until the exact amount is recorded.

[BlueStateGirl]

31. Honestly, that sounds like a dishonest server to me. It's odd that

it happened at two different places, but I don't think the businesses would do that. It serves no purpose.

I have known servers to add a few bucks to the tip, thinking that the customer will not remember if he tipped 5 bucks or 7 bucks when the bill comes in.


18 to 20 % is often added for large parties, but not without notification. And sometimes, if paying with a check card, the bank will put a hold on your funds for a few days.

If you still have your signed copies, take them back to the restaurants and find out what's up.