New question about tipping - cash or card?

scottmandue · 06-06-2006, 02:27 PM

Didn't want to hijack the other tipping thread so...

We seem to have some people with food service experience on the board so how about a question of world shaking importance.

When tipping at a restaurant do you (the server) prefer or care if it is cash or on the card.

Inquiring minds want to know.

Steve Carlton · 06-06-2006, 04:35 PM

Servers prefer it in cash. Tips on the cards wind up on their paycheck.

sewell94 · 06-06-2006, 05:03 PM

cash was always better

artplumber · 06-06-2006, 05:19 PM

Reinforces why Rick's argument about waiters having to declare 8% income on their customer food receipts (whatever they get in tips) something to care nothing about.

Dixie · Dixie's Garage

Tipping via credit keeps those rude customers from diggin' into the tip jar...

SD Porsche Fan · 06-06-2006, 05:27 PM

I always prefered cash when I waited tables.

vash · vash's Garage

from a consumers point of view. at the end of the day, the manager will have togo thru all the CC tickets and add the tip. i never liked that. i dont want anyone adding to my CC bill. a slip of the finger, a missed digit and you will have some explaning to do. i like the cash, piled on top of the signed and zeroed out CC reciept. clean.

cantdrv55 · 06-06-2006, 08:38 PM

It's more convenient to just add the tip onto the check.

84porsche · 84porsche's Garage

When I worked in a restaurant, I always loved cash but now as someone who goes to restaurants, I prefer using a c/c for tip just because I don't like carrying cash.

Porsche-O-Phile · Porsche-O-Phile's Garage

I try to do cash when possible, especially when the service is good. They don't pay tax on it that way.

Then again, it's very difficult to carry cash - I pretty much live off my ATM/debit card. Without that thing I'd be hurting day-to-day.

masraum · 06-07-2006, 05:38 AM

They prefer cash, but I do card as much as possible because it's more convenient for me. Either way they get the money. Also, when you tip on credit card they can't fib to the IRS about their tips.

Rick Lee · Rick Lee's Garage

I just answered this on Vasteve's thread. It doesn't matter. Credit card tips are paid out in cash when servers settle with the house at the end of the shift, and IIRC the credit card tips do not at all affect tax witholdings. Remember, servers are only required to declare 8% of their revenue (that's total sales, not tips), which the IRS assumes they received in tips after they've tipped out the bar, kitchen, bussers, etc. Most restaurants require servers to come to work with their own "bank" or wad of cash to use for giving change back to cash-paying diners. Credit card tips are as good as cash, since they are paid out at the end of the shift.

sewell94 · 06-07-2006, 05:58 AM

The IRS does not make them declare 8% of there tips. They are required to declare 100% of there tips, 8% happens to be a magic number where they seems to leave u alone and not audit, but thats changing. Many of the chains are now allocating tips on w-2s, i had claimed 8 or 9% one year and the company i worked for decided that i needed to claim more so the added more in, how nice of them

The irs is now starting to compare the cash tips % to the credit card tip %. Its not like the companys want them to claim more tips, when they do that the company has to pay more in taxes (ie the matching taxes, -S.S., fico etc etc)

Rick Lee · Rick Lee's Garage

I had to enter my tips declaration into a machine at the end of each shift and sometimes 8% did not cut it. But it was not due to IRS regs, but rather the restaurant needing more to withold from my paycheck. Sometimes I got no paycheck at all and sometimes it was a whopping $25.

sewell94 · 06-07-2006, 07:29 AM

That does not make any sence, why would the restaurant need to withold more money from your paycheck??? I guess this is the accountant side of me asking the question.

Rick Lee · Rick Lee's Garage

Restaurants now have something called "subpay" where they need to show a server is making at least minimum wage, even if the tips declared divided by the hours worked don't compute to that amount. Since they have to withold income and payroll taxes based on that figure, sometimes you need to declare more than 8% of your revenue. I think this was most common during weekday lunch or inclement weather shifts, when servers are on the clock, but don't get a lot of business.