Unfair Credit Card Fees

As far as I know it is against the law to take the tips of the hourly employee and use it for anything beyond their compensation.

 

It's bad enough that tips have to be reported and paid taxes on...

 

Credit card companies have always charged fees for the use of their cards. It is how they make money, which is perfectly fine.

Here's the key: If a company does not want to pay the credit card fees, then don't take the credit card. This is not something for the government to be involved in.

But I have to ask about this:

Why is that bad?

 

Because tips are a gratuity, not a wage. Waitresses are paid a very low hourly wage. Usually about half of what the minimum wage is and they have to live off of their tips.

Granted, it is for a service rendered, but it is optional and not everyone tips.

A waitress has to pay 10% of her 'tickets' whether everyone tips her or not (and believe me...everyone doesn't).

 

Its been a while but I waited tables for Ruby Tuesdays. I paid taxes on what I was tipped not on my tickets. Not sure when that changed. But if it has changed I am sure it is a result of servers not reporting all their tips.

 

That is probably true. Now ALL servers are punished for the actions of a few.

 

The problem is no one but the server really knows what they pull in. So there is no real accountability. I am not for taxing any income. So long as we are the honor system is not reliable. But what will happen is people will be less inclined to become servers if this is not profitable. But that is another thread.

 

That's a disticntion without a difference. They get a tip based on their work (theoretically ... the problem is that some think a tip is automatic rather than based on the work).

Right, and with their tips, most that I have talked to who work hard come out with a very decent hourly wage for the kind of work that they do.

I don't think that is true, is it? I think all tips are reported by the server.

 

In your 'swankier' restaurants, and even some not so swanky, the owner assumes everyone will give you a tip, and not only that, but everyone will give at least 10%.

This is simply not true.

Nevertheless, the tips are now reported to the IRS based on how much you sell, not on the tips you actually receive.

 

Idiocy and most likely illegal.

 

Another reason income should not be taxed, but consumption should be.

 

My first job out of college was writing software programs that allow the credit card terminals to interface with Visa and MasterCard. There were a few states that allowed the owners to do this. The discount charged back to the wait staff only applied to the tip amount, not the entire value of the bill.
If I put on my old pro-business Republican ballcap, I would make the argument that, if I were a restaurant owner, why should I pay the fees associated with the dollar amount that is paid directly to the employees? How is that fair to make me incur an expense for money that I never receive? That is not unlike the people who complain that they pay taxes to support everyone else.

Regards, hope all is well with you,
BiR

 

Do you really want to tax consumption? Do you really want the government to have that much control over the economy?

To quote a great Virginian (and a great RICHMONDER), John Marshall, "the power to tax is the power to destroy."

BTW, if you are ever in Richmond, be sure to visit his house:
http://www.apva.org/marshall/

It's only seven hours from Knoxville (less if you don't have any traffic). I have done that drive many times.

Regards to you, TomVols,
BiR (a proud member of APVA)

 

I have not heard of such a practice in the UK. (Some restaurants and other retailers add a small percentage to their prices for customers paying by credit card).

 

[deleted - post inadvertently sent twice! Sorry!]