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Restaurant issues policy to deduct credit card fees for waitstaff tips, sparking debate

There are pros and cons to using a credit card as a customer, but the biggest cons are now going to fall onto the employees' plate.

Restaurant issues policy to deduct credit card fees for waitstaff tips, sparking debate
Representative Cover Image Source: Pexels | Andrea Piacquadio

In this day and age of digitizing, the whole world is going online. That is why even banks and credit card companies are coming up with new and enticing offers so that people choose to use more and more credit cards from particular banks and providers. However, have you ever wondered who bears the cost of the discounts you're availing by using your cards? Who is paying the price for your discounts or cashback?

Representative Image Source: Pexels | Andrea Piacquadio
Representative Image Source: Pexels | Andrea Piacquadio

There is not one answer to it. When you're eating out, some restaurants have different policies and prices for people paying by cards versus those choosing to pay via cash. That is because these credit card payments levy a fee of 1% to 3.5% on the restaurants. They either do this or they include the price of that fee in the menu itself. However, that becomes unfair to the customers who are paying by cash because not only does that result in them having to pay the extra price on each item, but they also avail no discounts because they aren't using cash. In one way or the other, someone is bearing the cost. 



 

To combat this very issue, Twin Peaks, which is a restaurant chain, has issued a policy in their Kansas City and Wichita-area franchises stating that when receiving credit card payments from customers, the tip given to the waitstaff would include a fee, per The Kansas City Star. That fee would depend on factors, such as whether the card was a Visa, MasterCard, Discover, or American Express. They also sent a letter to all Twin Peaks in the two locations to inform the servers that the card processing fee would be deducted from their tips.

The employees have also been told that no retaliation against this new policy would be tolerated. However, after the image of the policy letter went viral on Facebook - there has been quite a backlash about this. The sad part, despite the backlash, is that doing this is completely legal in about 44 states in the USA as long as the deduction is based only on the top and not the entire bill amount, which is the scene in this case.

Image Source: TikTok | @sourdieselnomad1
Image Source: TikTok | @sourdieselnomad1

In a video posted by Mandy–who goes by @sourdieselnomad on TikTok–she mentions this new policy and asks people how many of them knew that employers could charge employees the credit transaction fee. She also proceeds to read the letter, which states the specifics and would come to action from January 1, 2024. She says, "So you've got to give 3.25% of your tips that are a credit card back to your employer for the credit card transactions and nothing is stopping them. This seems ridiculous." And she isn't the only one who feels that way. 



 

In a YouTube Shorts posted by Kevin (@KEVIN247), he says how franchise owners of Kansas City Twin Peaks have dropped a big bombshell on their "gratuity-based waitstaff and scantily clad servers" who would majorly rely on customer-paid tips to support their salaries. He added, "For each dollar in tips received through Visa, Discover and MasterCard, a 2.5% refund will be deducted from your final checkout." He further added, "Similarly, for tips received through American Express, a 3.25% refund will be deducted." He continues to read the part of the letter that mentions that this would apply only to credit card tips and not to cash tips.

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