Do Servers Prefer Cash or Credit Tips?

Should you tip cash or credit? What do servers prefer?

Based on our own experience waiting tables and owning a food-service business, plus the many servers we've known over the years, the answer to this question is overwhelmingly: cash.

First, that money is available to servers at the end of their shifts at the latest. With credit tips, they usually have to wait to receive them on their next paycheck, which takes up to two weeks.

Also, of course, every penny of a server's tips paid via a credit card is reported to the IRS, while there's much less of a paper trail with cash when it comes to paying income tax on tips. Not that we're suggesting people in tip positions underreport their cash gratuities, oh no. In the past, the IRS clamped down hard on cash tips in various ways, but lately, cash has become the exception rather than the rule. We've seen estimates as low as 5% of restaurant tips that are now left in cash, so what even 10-15 years ago was a major concern for the IRS is much less so now.

A third concern with tips left on cards is the fee, generally 2%-3%, that the credit-card company charges the restaurant to process electronic payments and that includes tips. Some restaurants pass along this fee to the servers to cover the extra cost, so $1,000 in gratuities, say, for the pay period is reduced by $20-$30.

On the other side of the question are two main issues. One is that especially since the pandemic, wait people at more and more restaurants now pool their tips, which can create a lot of ill will among them. No doubt some servers don't turn in all their cash tips, which shortchanges the other servers (and of course has tax implications). Tips on credit cards can't be disputed like cash tips can.

Two, if servers are trying to document more income, for example to qualify for a car loan or mortgage, that's easier to do when tips are reported/included on paychecks.

Otherwise, cash is still king with waiters and waitresses.

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Comments

Jon Anderson May-27-2023

tipping preference

so is it kosher to ask your server which they'd prefer ?? cash or credit ?? or is that tacky ??                                   GO Knights !!!

Kevin Lewis May-27-2023

Bizarre radical notion

How about paying them what their work is worth? Many societies don't tip--New Zealand, for example.

David Miller May-27-2023

Cash, always

 I always tip in cash - I let the server declare what they wish. I have never had a server complain when I tip in cash. Since almost of my meals (in Vegas) are comped, I tip based upon the service. The better the service, the larger the tip. If the service is lacking, I tip less. I tip as it should be - not because some entity tells me how much to tip. Tipping would be a moot issue for all if servers were paid a proper wage.

O2bnVegas May-27-2023

the customary plus

If the meal is comped I tip based on what the cost would be if I were paying, using the customary 15-18%, plus more for good service; plus even more for over and above service.  Those tickets that have the 'suggested' tip based on selected percentage at the bottom usually are way less than what I would normally tip, so those don't help the server at all, IMO.  

Some people have expressed being insulted by the "suggested" list, but it doesn't bother me at all.  Actually can be helpful; depending on the quality of the service, it helps me not overtip which I tend to do.  But I'll always tip at least the customary minimum.

Candy

Dan McGlasson May-27-2023

tipping preference

Responding to Jon's question - I don't believe it is at all out of line to ask the preference of the server.  Different servers need different things.  Asking cash or credit is another way to show you care about them!

Bob Nelson May-27-2023

Tips

I work part time in a tap room of a small brewery for fun and profit.  For us all tips are pooled, cash and credit, and divided for the day by the number of hours worked.  They all go in our paychecks.  It is really the only fair way for us to do it, one person may be ringing up tabs while another pours and a third washes glasses or cleans tables, all important jobs.  I have wondered but I have never asked if the credit card charge is taken out of the tip pool, I’ll have to check on that.  Either way all tips are appreciated!  I am retired but for the people that are full time it makes a big difference.

O2bnVegas May-27-2023

good QoD

Appreciate the different perspectives of servers re tipping.  What seemed like a no-brainer turned out to be very interesting, to me at least.  As is usually the case, I should add.  Thanks, Deke.

Candy

CLIFFORD May-27-2023

IN ADDITION

I TIP CASH ...BUT....I ALWAYS GIVE IT TO THE SERVER BECAUSE I'VE SEEN CASH ON THE TABLE GET STOLEN BY SOME LOW-LIFE. I BELIEVE GRATUITY SHOULD BE INCLUDED IN THE PRICE OF OF YOUR ORDER AND THEN GIVE EXTRA FOR A JOB WELL DONE... 
FUNNY...A WAITER IN SAN FRAN CHASED MY BUD DOWN THE STREET BECAUSE HE ONLY LEFT AROUND 10% DUE TO POOR SERVICE.  DUDE SCREAMED AT HIM FOR 2 MINUTES...HAPPY AND A SAFE  MEMORIAL DAY TO ALL.  DO YOU KNOW WE HAVE LOST 645,000 WOMEN AND MEN TO CONFLICTS SINCE WW1 FOR US AND FUTURE GENERATIONS...THANK YOU, THANK YOU.

[email protected] May-27-2023

Tip Cash

Unless that meal or bar tab is going on your expense account.

Ray May-27-2023

opposite viewpoint

I almost always tip credit, especially in a casino situation. I budget my money by having cash to gamble with (and tip cocktail servers, which I consider part of my gambling budget) and use either my credit card or check card for all other purchases. I will also tip cash for service at a buffet since we pre-pay for the meal and I don't want to commit to a certain amount. I have never heard a complaint about not leaving a cash tip. And, as far as having to wait for their tip, many restaurants that I frequent take the cash out of the drawerand give it to the wait staff after I have had it charged to my card.

Doc H May-27-2023

sure

"How about paying them what their work is worth?"

Sure lewis, so you can whine and moan on this forum even more when the prices of menu items go up way beyond the 15-20% tip range? 

When restaurants have to pay servers far more in the form of a fixed salary to make up for doing away with tips and to think that will neatly make all menu items go up 15-20% is naïve. Or do what they do in many restaurants in Whack-a-fornia, add a 'surcharge' to the final restaurants bill over and above tips because of the forced cost of high wages and cost of doing business on restaurant owners nonsense. Heck, I saw one with a 1% surcharge added to the bill because of 'green' nonsense. I kid you not.

Don't be naïve people - Tips, no tips, surcharges after the final bill to make the menu prices look better, it's all the same in the end as you will pay one way or another. And usually far more. Be careful what you wish for.

Reno Faoro May-28-2023

one answer -only

CASH IS KING , EVEN IN 2023 . DO NOT ANSWER ANY OTHER WAY .

Question of the Day - 27 May 2023

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