Why Must Servers Pay the Credit Card Fees?

Can we talk about credit card fees and how so many restaurants are making their servers pay them? For those of you not in the know, every time a customer uses a credit card, there is a fee attached to the transaction that the business is responsible for. The fees vary from card to card. American Express has the highest fee which is why so many small businesses don’t accept that card. For decades, the fee was an assumed cost to the business, but things are changing. In more and more restaurants, it is becoming common for the business to pass those fees onto the server. To that I say:


Why the hell is this legal? It doesn’t happen in any other business. If I use my credit card to buy some new, ugly-ass work shoes at Payless, we all know that the person at the cash register isn’t going to pay the credit card processing fee, Payless will. So why has it become acceptable that servers are responsible for that cost? It’s straight up bullshit and yet another way the restaurant industry takes advantage of us servers. Is it not enough that most of us don’t get overtime or holiday pay? Aren’t we screwed enough when we work eight hours straight and the only break we get is if we ask someone to watch our section so we can sneak into the bathroom for five minutes? And it’s shitty enough that most of us are denied health care because our employers won’t give us enough hours to make us eligible for it. But we have to pay the restaurant for the luxury of letting their customers pay with credit cards? Bullshit.

This doesn’t happen to all servers, but to a lot of them. Every week, I get at least two or three messages from someone asking me if it’s legal and I always have to give them the sad news that it is. The fee is probably about 3% of just the tip, but that adds up. If you make $400 in credit card tips each week, that ends up being $48 a month. Until the restaurant is going to let us tell the customer we’d prefer cash tips, we shouldn’t have to pay the fee. Any restaurant that makes their servers pay every time a customer uses a credit card is carelessly tossing one more straw onto the proverbial camel’s back and sooner or later that back is going to break like a rickety tray stand with too many dishes on it. How can we make change? Who do we know that is willing to stand up for the rights of those of us in the restaurant industry?

Well, my first thought was me, but I don’t have any connections with lawmakers and let’s be honest, I’m pretty immature and what lawmaker is going to want to talk to someone who smells like cheap tequila and is wearing a t-shirt that says “Internet Troll Prick” on it? And then I thought about Restaurant Opportunities Centers United. Their website states:

The mission of the Restaurant Opportunities Centers (ROC) United is to ensure that all people who work in restaurants can achieve financial independence and improve their quality of life.

Well, I know a lot of servers who might have a better chance at financial independence if they weren’t paying the credit card processing fees for the places they work, so maybe ROCUnited can help. If you are paying the fees on credit cards, or if you just think that it shouldn’t be the server’s responsibility, maybe send them an email and see if this is a cause they are willing to get behind? It certainly can’t hurt and I’m sure they’d love to hear from servers from all over the country.

Click here if you want to send them an email. (Just remember, we are asking them for help. They are on our side.)

It just seems completely unfair and so out of the question that any server would be responsible for that cost, yet here we are. So many of us see that deduction each week on our already ridiculously low paycheck. It’s not right and I don’t like it. Do you?

I wait tables and bitch about it on my blog, The Bitchy Waiter.

25 thoughts on “Why Must Servers Pay the Credit Card Fees?

  1. I know this post is a bit old. But I’m with the previous reply ⬆. The breakfast/lunch restaurant I work at, I make just over $3/hour. (I live in Pa.) We accept debit and credit cards. But for some reason, the customers are not allowed to leave us a tip on the card. There’s no line for it on the receipt. And our boss says “tough”.
    I count at least $50 a shift in tips I miss out on because of this. Some people are nice enough to run down to the closest atm & bring us a tip back. But most, don’t. Is this legal? I mean, my other job did this too, but I also made $11/hour. So that wasn’t a big deal.
    But literally server wages..and not allowed to collect credit card tips. I’m thinking of quitting over this. I bust my ass 6 days a week…to get half the tips I should be getting.

  2. I actually like this article and can appreciate where the author is coming from. Here in my area of the country, we have a drive-thru restaurant chain called Sonic (burger joint essentially) and you can pay with your phone or a credit card directly from the same menu that you order from but they absolutely will not implement a method of adding a tip on to the total of the order…and I actually applaud them for that. Those servers also receive the same ultra-low minimum wage and have to bring you your order on skates after meticulously checking to make sure everything is as ordered and bring your order directly to your vehicle ON SKATES. They deserve at least a 15-20% tip as far as I’m concerned which is why I never visit the restaurant without any cash in my possession to tip with. Of course it’s inconvenient for the average layman who wants to tip but can’t add it to the credit/debit total, but they purposefully left this feature out of their ordering/payment system so that employees don’t have to pay back the crappy credit card processing fee. I just hope some of these restaurants actually work with reliable and very low overhead processing companies so that they can keep the most margin and not have to pay a ridiculous percentage to a credit card processing company. I worked for a pharmacy delivering narcotics to nursing homes and mental hospitals in the area, and our credit card processing company at the time charged almost 4% on every single transaction performed and the owner/head pharmacist didn’t care because their system was so easy to use. I could have setup the same system myself where he would pay much less just by using something stupid like the Square app on an Apple iPhone or Android device instead of their ridiculous POS system. I’ve learned to leave tips in the form of cash as often as possible at sit-down restaurants and places like the Sonic burger joint I frequent from time to time.

  3. My former boss decided few years ago that he was going to start charging employees for credit card processing fees. He would deduct those fees from our paychecks .Ever since that change happened, every bartender was always few dollars short every single shift they worked. I’m pretty good with money, and I knew that it was impossible for me to be short every single shift. My money was always on point before. When I mentioned that to my bosses ,they blew me off and told me that I probably made a mistake giving somebody chanhe. Really?? Every single time? I don’t fucking think so! I noticed that there was a new line on our reports that said ” tip charge back”. They told me that in didn’t know what I was talking about. That went on for about six months. I kept paying the shortage out of my pocket until we had this huge party and I ended up being $20 + short. I was furious. Next shift I made sure that I gave everybody the exact change and had to get few stacks of pennies during my shift. At the the end of the night I added all my cash checks manually, deducted my servers and my credit card tips and $150 bank as well and I was on point. My boss added my net cash due and my servers net cash due, and didacted $150 bank, and according to their calculations , i was about $8 short. I took the total cash due that he got and deducted my servers and my tip charge back combined , and that equaled to the number that I got after adding cash checks manually. He couldn’t deny that I was right because i was right on the penny. Something like $7.97. So , what he was basically doing was taking the fee out of servers checks and bartenders checks, and he was also charging us bartenders every single shift for our credit card fees and our servers credit card fees, since we were their cashiers. He wasn’t just double charging us, he was triple and quadruple charging us depending on how many servers were assigned to us on a shift. I did some simple math in front of him and showed him that he overcharged four of us bartenders $1,800 -$2,000 over a 6 months period. POS didn’t even apologize. He blamed it on our accountant. Dude, you stole almost $2,000 from your employees and all you have to say is “It wasn’t me”!!! GTFO! You’re a piece of shit employer and a thief and eventually you’ll end up paying that back, one way or another.

  4. It’s total bullshit. The restaurant chooses to accept cc as payment. They already steal 8k a year from me in tip share and pay me 2.13/he and on top of that I’m required to pay the cc processing fees for charge tips? When does it stop? What else can they squeeze our of me. On another note, why do they get to treat us like shut when after tip share we PAY to work there. My annual “fee” for taking care of their customers and cleaning their restaurant is about $3500.

  5. Totally illegal in California.
    And total bullshit. If a restaurant decides to accept credit cards, then they also decide to accept the credit card fees. It’s just another example of servers getting taken advantage of. Like tip pools where management is included. I find it fucking hard to believe that credit card usage has increased that much in restaurants. I’m not sure what the laws are in other states, but it’s definitely worth a look on your state’s department of labor website.

    1. They do accept the credit card fees *on the portion of the money that goes to them.* They can only deduct the portion of the fees that applied to the tip.

  6. Make sure that you understand the difference between cc fees for the check and processing for the tip, 2 different animals. The fee charged to servers is for processing their tip and is typically 2.5-3% of the tip only, not the whole check. Think of it like an atm fee, you don’t expect that processing for free from a bank that’s not your own. Only this is much smaller than an atm fee. Restaurants should eat it as a cost of doing business but some don’t, and it’s completely legal.
    Look at it this way, do you want to work in a cash only business or somewhere that takes credit cards? Think of it as your cost of doing business.

    1. It’s not YOUR cost of doing business, as a server. It’s the fucking restaurant’s cost. I didn’t choose to accept American Express. THE RESTAURANT DID!

      1. Reality check Lance. If your restaurant didn’t accept credit cards you wouldn’t have a job. While were at it do you claim ALL your tips or are you a hypocrite like every other server I meet?
        Wash state servers make minimum wage $12.00 per hour!
        I think servers should win the “WHINEY EMPLOYEE AWARD” they deserve it. Lets throw in the “FEEL SORRY FOR ME I AM JUST A LOWLY ABUSED SERVER AWARD”

        1. I make 2.85 an hour and have to take to go orders that come in as well as my tables. 90% of people don’t tip on to go orders (which I wouldn’t mind at all) until I’m paying a credit card fee. It is literally costing me money to serve them. And before you get all high and mighty. Not everyone is scheming, I claim ALL OF MY TIPS. I never want to be audited. So you can keep saying we are lazy or entiybut just know you are generalizing a lot of hardworking people.

    2. If a server should “consider it a cost of doing business” then they should be allowed to file as an independent contractor on a 1040 instead of ad an employee with a W2. The they could deduct the cc processing fee on their taxes.

    1. You can call BS all you want. I’ll make you a deal once you start reporting ALL your tips I will pay your credit care processing fees. Oh, wait. I already pay those.

  7. The difference is that Payless is making a profit on the shoe sale. Restaurants don’t profit on credit card tips, so why should they eat the credit card fee. I never minded having the fee deducted from my tips because credit card users usually tip higher, and American Express users even higher. $48 per month for the server, but how much for the restaurant? Nickels and dimes add up.

  8. Doesn’t it just mean the tips will not be subjected to tax reporting? If a customer pays for the bill by credit card, and not the tip, why does this avoid fees?

    If the card still has to charge the bill and not the tip, is the fee somehow avoided?

    1. I’m not saying it’s the best system, but the comparison to Payless doesn’t make sense. A Payless employee isn’t getting any part of the actual processed sale/they don’t make tips.

      Processing fees are a percentage of the total, so a tip increases the total bill and thus the fee. The tip then goes to the server, not the restaurant, so if they don’t pass on the fees, the business is paying processing fees for money that doesn’t actually go to them.

      That’s why it’s permitted (in the states where it is permitted) and why the restaurant can only deduct the portion of the fees for the tip, not the entire bill.

      “But we have to pay the restaurant for the luxury of letting their customers pay with credit cards?”

      No, you’re paying the credit card processing company for the service of processing credit cards.

      I worked in food service for years. There’s a ton of ways employers take advantage and it’s shitty. This is pretty low on the list of shitty things, IMO. If I owned a restaurant, I like to think I wouldn’t do it, but it’s easy to see the business owner side. They don’t want to pay fees on money they aren’t getting.

    2. Carol,
      “If a customer pays for the bill by credit card, and not the tip, why does this avoid fees?”

      Credit card fees are a percentage of the total. So a $50 restaurant bill paid by credit card and a $10 tip paid by cash will incur a lower fee than a $60 bill with tip included paid by card.

    3. No. It is a fee charged to the restaurant based on a set agreement. Be it a percentage of the bill ran, or a per transaction charge. Where I work currently we pay a percentage of the tab that was paid with a card. Which is still BS in my eyes as I have been in the industry for almost 20 years and have never seen this happen till now

    4. First of all the bitchy waiter thing is right on! I have no pity for servers as they are usually the laziest (unless they are waiting on a customer who is supplied to them by the owner) and most selfish bunch I have ever had the honor to employ.. In our state, Washington, they will be making a hourly wage of $12.00 an hour plus tips (50% of tips they don’t pay taxes on they just don’t report them even thought it is illegal). Never fear though they cannot be coerced by management although if caught the restaurant owner will probably have to pay all fines and penalty’s). For heavens sake never ask the to share tips to the other crew — HEAVEN FORBID! For all you servers who think the owners are rolling in the dough think again. Look at the stats most servers are the highest paid employees in the building. We just can’t keep raising prices and stay in business. I know everyone feels sorry for you and you thrive on that. Poor servers, so abused. NOT! Most people in our state have no idea they make $12.00 an hour its time to get the message out. LOUD AND CLEAR:
      Oh thought I throw this in we also pay for your credit card tip fees, yah we do.

Leave a Reply

Your email address will not be published. Required fields are marked *

I want two things: a shift drink and your email address!

Someday, if I ever get my act together, I might send out a weekly newsletter about the wonderful goings on of the restaurant industry. Or maybe I won't.