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I've never heard of restaurants charging waiters the credit card fees!  This is awful, and I suspect, illegal.

Why?

I've asked this question to various people "in the know" and I could find no agreement. Some thought it was illegal and some just thought it was immoral.

I started asking when I was a server who had a percentage taken off my cc tips. The owner felt justified and most of the servers had no idea it was wrong.

That was the last place I ever worked where tips were deducted this way, but it was not the only place where I worked where the owners were less than honest.

That said, I generally ask the server if they'll get the tip right away on the cc and if they'll get all of the tip. If they do, I'll leave it on my card. If not, I'll usually pay cash. :)

Here's my take. Bear in mind I've always worked back of the house managing the finances. I worked for one (out of about 6) restaurant that dedcuted the cc discount. My only problem with this was that it was a bookkeetping nightmare and not worth the savings to the restaurant because of all the time involved to calculate the discounted tips. Other than that, I found nothing wrong with the practice. If the the restaurant only receives 95 cents on the dollar on credit card tips, why should the server receive any more? In larger restaurants, this can be a substantial cost/savings.

If the consumer is so concerned about the server receiving the entire tip, let them leave a cash tip. Others here have commented that they are happily oblivious of what happens to the credit card tip and I don't disagree with that thinking. However, if you are aware that the server might not receive the entire amount or not receive it promptly and you care, then you should leave cash. I always do.

As for the legality, I did check with the restaurant association when I worked for the restaurant that deducted the discount - I was told it was legal. And I can think of no reason why it wouldn't be.

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