Fees On Credit Card Tips

Last week I got into a discussion on a fantasy football message board. The original question was, why was food and alcohol split apart on a check for a company dinner, and whether the customer should tip the same on both the food and the alcohol.

One restaurant owner, while giving his point of view, mentioned that he deducts the fee his business pays to the credit card processing company from the tip, considering this cost to be directly related to the tip.

I think this is an underhanded way of transferring a portion of the cost of doing business to the employee, and not giving the employee the full amount of the tip that the customer intended.

I did some googling and found this article. Apparently a company in California was similarly deducting the fees from the servers' tips. A group of servers took the restaurant chain to court and lost. The California legislature then enacted a new law, AB 2509, prohibiting this practice.

This wouldn't affect me much either way as less than 20 % of my deliveries pay by credit card, and several of those that do either give a cash tip or don't tip at all, but the principle of it alone would probably be enough to encourage me to seek employment elsewhere.