Question Re Putting A Tip On Credit Card at a Restaurant

[Bud]

Just wanting to understand what is really going on here. Infrequently, but seemingly at a growing rate as of recent times, some restaurant staff are now telling me when we are taking care of the bill for our food service that "the law doesn't allow us to put tips on the credit card; tips must be in cash". My understanding of the law (including the new law from earlier this year) is that tips cannot be automatically put on a bill by the restaurant, but nothing to the effect of barring customers from voluntarily putting a tip on the credit card charge slip. (And the credit card processing centers seem to validate my understanding, otherwise why would there be the ability to do such on the credit card transaction?)

So what is really going on here? I'm an inquisitive guy who just likes to understand things.

[Keith Woolford]

Bud, I think most restaurant employees believe that if a Tip goes on a Credit Card, the chances of them seeing a dime of it are slim to none as the restaurant owner will keep it for himself.

For that reason I always tip in cash.

Edited April 29, 2017 by Keith Woolford

[Twin Wolf Technology Group]

Keith is correct.  In the places where I have friends that work as waiters and waitresses, they do not get any of the tips that go on a credit card.   Management simply does not take the time and effort to tabulate and pull out the tip amounts, then distribute them.   Give them your credit card and tell the waiter/waitress you will be leaving your tip in cash... and you will see a big smile.

The other thing you are likely seeing is the common misunderstanding of the law.   The education and explanation of laws to restaurant employees is somewhat poor.   Compound the problem with the English / Spanish barrier and it is easy to see how this happens.   Management tells the staff that they cannot include tips on the bill (because that would make it appear mandatory), and that gets understood as you can't put tips on the credit card slip.   The employees then hate credit card users as they are unlikely to get a tip that goes in their pocket.

Another little known fact is that waiter/waitresses work a 48 hour week (6 days) as that is considered full time in Panama.   They do not receive overtime or extra pay for working that 6th day, so you may understand when they look a bit tired.

[JimAndNena]

Good stuff.

I would add that you hand your tip to your waiter with a gracias.

Leaving a tip on the table as you leave may never get to your waiter.

jim

[MarieElaine]

I also learned that the tip very often goes into a "pot" that is shared equally by all the wait staff working that day.  In my opinion this makes it difficult to tip a favorite server more generously than perhaps you would another.

[Keith Woolford]

Shared tips usually include the kitchen personnel as well as the wait staff.

3 hours ago, MarieElaine said:

I also learned that the tip very often goes into a "pot" that is shared equally by all the wait staff working that day.

 

[Twin Wolf Technology Group]

I will share one of my experiences with "shared tips" here in Panama.   In 2009, I owned and operated a poker room in Panama City within the Royal Casino.   Typically, poker dealers keep their own tips but I was quickly informed that in Panama they shared their tips.   In my opinion that takes away from the incentive to give good service.   I further learned that they collected the tips and then split them up every  two weeks.   Everyone got an equal share regardless of the number of hours worked.   That meant that if an employee only worked part time or if they called in sick, they still received the same amount of the tip pool as those that had worked full shifts or even overtime!  Unbelievable to my way of thinking.

In my effort to balance out this practice, I implemented a system that percentaged out tips based on hours actually worked, thinking this would give incentive to show up for work and volunteer for extra hours.   I was quickly proven wrong as the employees acted as a group.   Upon receiving their tip envelopes with varying amounts, the group collected them all up and redistributed the tips back out evenly.   Dealers that had worked twice as much, receiving double the amount of tips, put their money in the center and drew out the lesser yet equal share.  I watched it happen.

There appears to be a belief that tips are a group effort rather than an individual effort.   Based on this and several other experiences, I came to the conclusion that it is a cultural difference.   If you wonder why a nice big tip does not get that extra smile or appreciation, you need to realize that the person receiving the tip does not necessarily see that as personal reward.   There is comfort in being just a member of the group without the desire to be better or advance.

   

[Bonnie]

Very instructional. Thanks!

[MarieElaine]

Motivation goes out the window.  Perhaps this is what is lacking here in "manana land" and needs to addressed in order for Panama to become a first world country.

[Roger B]

On 4/28/2017 at 8:06 PM, Keith Woolford said:

Bud, I think most restaurant employees believe that if a Tip goes on a Credit Card, the chances of them seeing a dime of it are slim to none as the restaurant owner will keep it for himself.

For that reason I always tip in cash.

Keith

You hit on the nail.   

I do really think that it is a special petition from the employees because some "bad employers" sometimes did not give them the tips they have received.  Also it has to do with what is called "tip pool".  That means that at the end of the day the tip is divided equally among all the employess.  So an employee that did not gave a good service will be rewarded in the same amount of other employee who worked hard and gave a good service to his/her customers.

[Roger B]

On 4/28/2017 at 11:02 PM, Twin Wolf Technology Group said:

Keith is correct.  In the places where I have friends that work as waiters and waitresses, they do not get any of the tips that go on a credit card.   Management simply does not take the time and effort to tabulate and pull out the tip amounts, then distribute them.   Give them your credit card and tell the waiter/waitress you will be leaving your tip in cash... and you will see a big smile.

The other thing you are likely seeing is the common misunderstanding of the law.   The education and explanation of laws to restaurant employees is somewhat poor.   Compound the problem with the English / Spanish barrier and it is easy to see how this happens.   Management tells the staff that they cannot include tips on the bill (because that would make it appear mandatory), and that gets understood as you can't put tips on the credit card slip.   The employees then hate credit card users as they are unlikely to get a tip that goes in their pocket.

Another little known fact is that waiter/waitresses work a 48 hour week (6 days) as that is considered full time in Panama.   They do not receive overtime or extra pay for working that 6th day, so you may understand when they look a bit tired.

Twinwolf

 

You are absolutelly right. 

Give the waitress a tip in cash and the big smile will show up.

Some business owner's dont care about teaching correctly the law to their employees.  They think the more ignorant they are the more they can control them.

Your last paragraph is something that I have been investigating for some years.  I think that the cause of some "bad service" given by some waiters and employees is because of that.  They feel exploited and sometimes abused and they are not working in a very good work environment that makes them happy.  They worked there because they need the job but not because they like to be there.

[Roger B]

On 4/29/2017 at 4:40 PM, Twin Wolf Technology Group said:

I will share one of my experiences with "shared tips" here in Panama.   In 2009, I owned and operated a poker room in Panama City within the Royal Casino.   Typically, poker dealers keep their own tips but I was quickly informed that in Panama they shared their tips.   In my opinion that takes away from the incentive to give good service.   I further learned that they collected the tips and then split them up every  two weeks.   Everyone got an equal share regardless of the number of hours worked.   That meant that if an employee only worked part time or if they called in sick, they still received the same amount of the tip pool as those that had worked full shifts or even overtime!  Unbelievable to my way of thinking.

In my effort to balance out this practice, I implemented a system that percentaged out tips based on hours actually worked, thinking this would give incentive to show up for work and volunteer for extra hours.   I was quickly proven wrong as the employees acted as a group.   Upon receiving their tip envelopes with varying amounts, the group collected them all up and redistributed the tips back out evenly.   Dealers that had worked twice as much, receiving double the amount of tips, put their money in the center and drew out the lesser yet equal share.  I watched it happen.

There appears to be a belief that tips are a group effort rather than an individual effort.   Based on this and several other experiences, I came to the conclusion that it is a cultural difference.   If you wonder why a nice big tip does not get that extra smile or appreciation, you need to realize that the person receiving the tip does not necessarily see that as personal reward.   There is comfort in being just a member of the group without the desire to be better or advance.

   

Twinwolf

The tip is a gratuity you give to any person who you consider deserves it because of the good service you received from that person.  Period.  I know that in some places the OWNER states the tipping practices and instating the tipping pool.  Some business owners include in the tipping pool all the persons working including the kitchen personnel.  

In your personal case if that happened then it means that anyone of your employee was acting a leader and decided with a good majority to do that.  I am so sure that there were a lot of them who were not satisfied with this measure but.... they didnt want to have trouble with their peers so they accepted it reluctantly.  

People here thinks that their extra effort is theirs but they cant do anything if there is "peer pressure" to accept this.  

 

[Bud]

I have delayed responding to my original question/topic so as to give a reasonable amount of time for those wishing to respond to have time to do so. It has now been a bit more than a week since I started this topic.

Several replies brought up aspects of this tipping topic that I never even considered. I must be really naive. I have learned a lot. Thank you to all who have responded.

A disappointing new awareness on my part has to do with a cultural or regional (?, not sure which, or both) aspect of this topic is the "tip sharing" concept. For some reason I never considered that as an option. Duh! I know that is the norm in some situations (e.g., aboard a cruise ship, etc.), and that doesn't cause me concern. Apparently, if I am understanding correctly, the pooling/sharing of tips is a common thing in Panama. A management decision to share tips can be presented as a good thing by some. But that wasn't the way I was raised. I actually do [now] see both sides of this issue. But that then defeats the purpose of my wanting to tip someone for good service. My mindset about a "tip" is that it stands for "to insure prompt service", and NOT to be an augmentation to salaries for all employees; to augment salary for the intended recipient is what a tip is supposed to be about to my way of thinking.

I understand that many of you reading this will have different opinions, and you are free to share them and conduct your affairs accordingly. I am just telling you how I have always approached the subject of tipping (be it for a waiter in a restaurant, or a skycap for luggage assistance at an airport, or assistance with groceries at a store, etc.).

It is not clear to me how this new awareness is going to affect my tipping protocol. Time will tell.

Again, thank you to all.