1. Money
Lorri Mealey

Employer Takes Server’s Tip Money to Pay For Credit Card Fees

By January 29, 2008

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A Michigan restaurant is charging its own staff for credit card fees. Gandy Dancers, located in Ann Arbor, is charging servers 1.5% of their credit card tips, to off set credit card processing fees.  Should the fees associated with operating a business be passed on to the employees?

Is the owner of Gandy Dancers going to charge servers a percent of every meal they sell, to cover the their food costs? Perhaps they should charge servers every time they use the bathroom, to cover the cost of water and sewer. Nickel and diming staff does not seem like an effective way for a restaurant to save money. Food, costs, payroll, utilities, those are all ways that restaurants can save money, without taking servers tips. 

Read the entire story and share your thoughts in the forum.

May 12, 2008 at 4:50 pm
(1) Vicki Hancock says:

My soninlaw works for Raffertys in memphis and they also practice this. It is bad enough that servers do not make minimum wage and often get no tip at all let alone the company having employees pay expenses. Does that mean that this is an expense for the employee?

March 2, 2011 at 12:43 am
(2) Sean says:

Lorri Mealey thanks for being a genuine restauranteur! I have been in the business for 20 years and your story above I 100% agree with as this is being done to me in Virginia at a rate of 3% of credit card tips. I’m thinking of resigning and pumping gas for a living instead. I just moved down here from Vermont and have never heard of such an evil thing. I just turned down a job after finding out they wanted to charge me 3.5% of cc tips and a weekly fee for breakage whether it happens or not ie. cups, glasses, plates, etc.

March 29, 2011 at 12:23 pm
(3) Robert says:

You have to be kidding me thinking this is wrong? If anyone is to blame it is the Credit Card Companies. As long as the Employer pays the C/C fee on the Goods, the Servers should be responisble for a fee on the Service Tip. The article wants me to look at Payroll and Foodcost..really!!! So basically, dont charge the service tip fee, just give 5 servers 2 fewer shifts a week right (haha..little backwards) Oh ya, and food cost, READ A COMMODITIES REPORT and then get back to me on that.

April 20, 2012 at 12:31 am
(4) Greg says:

I totally agree with you Robert. We own a day spa and the services are 99% paid by credit cards. The cc companies charge a flat percentage and a swipe fee. Our employees are paid by commission. We Are Not taking a percentage of their commission from service, Only Tips! Why should we have to pay for the employees cc fees on their tips? Blame the system that we are required to go by! Look at your local governments, they are all charging a service charge with any cc payment. Now that is criminal!!!

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