Don't charge your tips?

Story in USA Today about why tips should always be in cash. Does this sound right?

I think the main advantage for cash tips is that the server doesn't have to claim as much since there is no way to prove tip amounts. This would result in a lower tax liability at the end of the year. As to the processing fee comment from the article, that is something I have never heard before. I think AmEx is about the highest rate for processing right now at 3.5% if I remember right, but there is usually a flat fee for each transaction as well so on a $100 tab, the fee would be around $0.28 plus $3.50 or so. Doesn't sound like a lot but can add up quickly. I know Proof tip pools, but the only negative comment I have heard from servers about their system is not based on anyone stealing their tips. At Napa, we give the servers their money every night and have never had any discrepancies in the formulation. Our POS software does all the accounting itself, as should every POS system. I think in a place that still used handwritten tickets, there may be more room for human error, but there are way more opportunities for servers to scam the restaurant in there as well.
It's funny that you never see owners or managers writing articles about all the ways that servers scam the system and cause profit loss to the restaurants and their owners/investors. Think about all the times a non-alcoholic drink goes uncharged by a server and do the math over a year on how much that would short the restaurant. It is far from a perfect system that we work in but I have never heard much around this town about managers/owners scamming tip money from their staff (and hopefully we never will).

[Robin Garr]

One obvious problem with high-end joints is that a restaurant bill can add right up. For record-keeping purposes, I pretty much do everything on plastic - one card for each revenue center - and even if I didn't care about having a record of the full amount paid including tip, I'd still often get into a jam where I didn't have enough cash - or not the right combination of bills - to lay down the necessary amount.

I I think AmEx is about the highest rate for processing right now at 3.5% is I remember right, but there is usually a flat fee fr each transaction as well so on a $100 tab, the fee would be around $0.28 to $0.35 or so. Doesn't sound like a lot but can add up quickly

3.5% of 100.00 is $3.50,not 35 cents. Funny what that decimal point does.

When you leave a tip of 20% on a meal you buy, I hope you aren't leaving 2.00 or your server will not be happy.

Edited, and if you want to actually contribute to the conversation Steve, feel free.

Hmm, interesting. I'm a server however, I have not actually taken the time to sit down and do the math on whether I come home with the exact amount of credit card tips that I received during a shift. Although I will say, it seems pretty close if not dead on to the quick math I have done. We get our credit card tips at the end of our shift and when we clock out, the POS system will estimate how much in cash tips you should have received based on cash sales. I have noticed that this system is flawed. For instance, the other night, everyone payed with credit cards. One person though didn't charge my tip on their card, but gave me $4 in cash. So when I clocked out, the system automatically inputted $0 for cash tips. I typed in what I actually received and it came up with an error message telling me that I made 400 % over what was expected and I need to have a manager override it. I even tried putting in $1 and the same thing popped up. Now I'm sorry, but I'm not going to go hunt down my manager for this. I am not the only server that does this. I don't understand why I would have to get a manager involved if I got more tips than what the system estimated. I could understand getting a manager involved if I under reported my cash tips since servers making $2.13/hr that do not bring in enough tips to make it up to minimum wage, the company is responsible for making up the difference. Personally, I would much rather have my tips charged. That way there is a paper trail in case if the IRS decides to do an audit. Yes, I'm one of those honest people even if it means I will end up paying more. The last thing I need is for the IRS to come knocking at my door.