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 1. Food Trends
 2. Why You Should Always Tip In Cash


WHY YOU SHOULD ALWAYS TIP IN CASH

There are several reasons why cash tips are better for workers, including one
that most servers don't even know about.

By Taylor Ann SpencerPublished: May 30, 2024
Save Article

vinnstock//Getty Images

We live in an era of cash-free convenience. We buy most things by swiping or
tapping credit cards or holding our phones up to a screen. We prefer to tip our
servers, bartenders, and hair stylists the same way because it's as simple as
hitting a button.

But what if I told you that there are several practical reasons why we should
all be tipping exclusively in cash? The fast is, cash tipping is the only way to
ensure that your servers actually walk away with 100% of their tip money.

As a former NYC bartender and server, I have plenty of my own opinions, but I
also talked to several former and current service industry workers to get their
perspective. Here’s why you should consider bypassing the credit card tip screen
and leaving cash instead.




The Server Gets the Tip Immediately

One of the biggest reasons to tip in cash is that the service worker will
receive that money immediately. This is a big bonus on both a psychological and
a practical level. According to Colton Trowbridge, a longtime server who has
worked in both Kansas and NYC restaurants, cash tips are better because they
provide immediate evidence of earning money: instant gratification.

“It feels a little bit more real when it’s in your hand,” he says. This might
sound trivial, but when you’re in the middle of a crazy eight-hour brunch shift
and your guaranteed hourly rate is only 50% of the legal minimum wage, tangible
proof that you are actually earning decent money counts for a lot.

Cash tips are also important because they mean that the server will likely get
to take the money home that night. They won't need to wait two weeks to receive
it with a paycheck. This is often true even if the server has to pool their cash
tips with others at the end of the night. “I have worked in a pooled house where
cash is divided up evenly and then it’s given to you,” Trowbridge shared. “In
that case, I prefer it for sure.”

For some servers, this day-to-day cash flow might not be necessary. For others,
it might be as critically important as allowing them to buy food for their
families or pay the babysitter who watched their children while they were
working. Of course this varies by the individual, and there’s no way customers
can know a specific worker’s situation. Regardless, cash is always the better
bet.

RELATED STORIES

 * Beware Of This Tipping Scam
 * Is It Okay To Not Tip When The Service Is Bad?
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CASH TIPS LEAVE LESS MARGIN FOR ERROR

There’s significantly less margin for error when you tip in cash. Think about
it: a $10 bill is $10, and when you give it to your server, they have it
securely in their hand and its value is indisputable.

But when you tip on a credit card, there are many potential pitfalls. If you’re
writing the tip on a printed slip, there's the possibility for written errors.
Maybe you put the period in the wrong place and ended up tipping way less (or
way more!) than you intended. Maybe you forgot to sign the slip or, worse, took
the signed slip with you by accident.

I have personally lost at least two or three sizable tips when customers
erroneously walked out the door with those slips. In these cases, the
restaurant’s payment has already been processed, but the only proof of the tip
left on the credit card is that slip they scrawled on. Without it, the server is
left empty-handed.

Catherine McQueen//Getty Images





BUSINESSES CAN DEDUCT CREDIT CARD PROCESSING FEES FROM TIPS

No, you didn’t misread that. In most states, it is 100% legal for businesses to
pay their credit card processing fees from the tip money left for servers on
credit cards.

This is clearly stated on the U.S. Department of Labor website under the Fair
Labor Standards Act: “tips are charged on customers’ credit cards...the employer
may pay the employee the tip, less that [credit card service fee] percentage.”

Only Maine, Massachusetts, and California have laws banning this. So, to be
absolutely clear, if you have tipped a server on a credit card in any other
state, there’s a high probability that the server (or the pooled house the
server belonged to) didn’t receive the full tip you left them.

Most businesses do not necessarily tell their staff when they are removing the
fees from the tip pool. Trowbridge shared that he has worked at one restaurant
where he knew they were taking out the fees, but only because he asked them
point-blank.

“It’s frustrating,” he said. “I don’t think that’s something that most people
are aware of.” Since then, he has worked in several other spots where he and his
fellow servers might have been losing out on credit card tip money because of
processing fees, yet it was never really discussed. “It’s definitely not a big
topic of conversation in the industry.”

In this age of contactless payment, it takes extra planning to make sure you
have cash on hand for tipping. But all things considered, it’s definitely worth
it. Next time you reach the optional tipping screen, hit “skip” and tell your
server you’ll be leaving the tip in cash. They’ll appreciate that extra effort.





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