credit card tips

For those that take credit cards for delivery, do you take a percentage out of the tips to cover charge, and if so what percent?

Hmmmmmmm No.

I don’t either…It is not their tip that pays for the service, When I get a call for card over the phone we add a $1.00 charge to the order. We currently have a cellular credit card machine so 95% of them go through it, but some people are ordering for someone else & so they want us to run the card for them.

off the top of my head, probably illegal in most states to do that.

Which states?

I dont do it, but the FLSA permits it. I thought the same thing, that it couldn’t be legal, until a friend mentioned it to me and I looked into it for him.

Here in CO it is illegal to have a CC charge… unless your the state. They exempted themselves from that wonderful law.

He wasn’t asking about charging customers for using a card - he was asking about deducting the costs of processing credit card tips from the amount of the tips given to the employee.

I would think taking a cut of tips to cover your costs might be “demoralizing” for your staff and be a bad idea in the long run…

Is it worth 3 cents on the dollar for the hassle of calculating it? Do you want your staff to feel like you are ripping them off? It is not worth the time or effort in my opinion.

So… (% of sales paid by CC X total sales) X (% ave tip) X .025…

Might even be over $1000 for the year for us, but… definitely not worth ANY employee dissatisfaction!

Of all things I can think of to save $1000 per year, this one ranks near the bottom of the list of desirable ideas.

As of right now, we do not take credit card for delivery orders, so it’s not something that was once given then taken away. It would start from day one. The hassle of the calculations may be the issue, and a good point.
I think I will look into the charging of a $1.00 for use of a credit card though, we still take local checks so the main customers do have other options.
Thank you for your input.

On a credit card tip of $4.00 you are going to keep 12 cents if your processing averages 3%. Hardly seems worth it from my perspective.

Penelope, whether you can charge for taking credit cards is going to be dependent on your state law. Here in Colorado it can not be done. Where it is allowed, it is often limited to your reasonable costs for accepting CC. For example on a $15 transaction at 3% costs you are looking at 45 cents not a dollar. You might also keep in mind how your customers will react. It is not a widespread practice and some will be mighty put out with it. Better off overall to just raise your prices a bit in my opinion.

Aside from state laws (not sure of any that even allow it) I’m pretty certain that most processors don’t allow it. So even if your state somehow does, you still need to make sure everyone else involved allows it.

The typical workaround is offering a cash discount.

With regard to surcharges to customers - processors have been required to allow it for over 2 years. Some states don’t allow it. You can get the whole scoop here:

http://usa.visa.com/personal/get-help/checkout-fees.jsp

we legally charge 50 cent processing fee on all orders under 20 bucks.we also disabled tips on the credit card machine because if we forgot to punch them in at the end of the night and still paid them out.this was more than a 12 cent loss.

So your customers can’t tip on credit card?

Why not make entering the tips a part of the process of paying them out?

No CC tips? I’d lose all my drivers if I tried to do that.