RAPID CITY, S.D. (KEVN) – Tipping, showing appreciation for a service, especially in restaurants.
What if the tip, doesn’t always stick? It hasn’t for Jacobs Brewhouse & Grocer owner, Sharon Jacobs, who says, “March, this year, I received my first chargeback.”
She didn’t think much of it. Things happen and she speculated maybe the tip was added after, “or, for some reason the customer thought it was wrong.”
Then, there was another. She says not for much money or anything, “five-dollars on one, ten-dollars on another, so I basically let it go.”
It didn’t stop there.
“Then, when the third one came in,” Jacobs says “I started questioning it. So, I started disputing them with the records that I had.”
She found the common thread. Tips over 20-percent, “that’s what sent up the red flag.”
It’s called tip tolerance and Jacobs says, “it’s VISA, Discover, Mastercard and AMEX. It’s every single credit card. It’s every single debit or credit card.”
Jacobs is referring to your bill at a restaurant and your card issuer when she says, “they know it’s from a restaurant. You put the first part of a bill in,” or, how much you owe for dinner. “let’s say it’s 100-dollars. Once they put it in, it’s pre-authorized for 100-dollars plus 20-percent.”
So, you’re pre-authorized for 120-dollars for what’s called tip tolerance. It’s a way the bank protects themselves to make sure the funds exist. However, Jacobs says if you want to give a 25-percent tip, “that sends up a red flag, and then they come back to the restaurant and charge back only the tip portion of that.”
Not just the percent over 20-percent, she says, “they literally take the entire 25-dollar tip back.”
It’s not every tip over 20-percent. However, it is problematic because the bank has 13-months to dispute charges, and a restaurant pays their staff the tips they made that night.
So, they’ve started saving tickets.
She says she refuses to ask her servers for that money back, “because, if they are doing such a job that enables them to get more than a 20-percent tip why would I then take that away from them, giving them no incentive to go above and beyond.”
She says the restaurant eats the cost of something that took place potentially a year ago, “And [are] happy to do so. You know, that just means I have a great crew.”
There are a lot of tickets to keep records of and thermal paper fades quickly. She’s been taking photos and copies, and dating them in case she has to go back in time to find a ticket as proof of payment and tip.
However, she says that “I’m bothered by spending time looking for something that I completely disagree with them having the right to do.”
So far she’s had no luck with disputes, because there’s “no conversation. They just deny it and out goes the money.”
She says sometimes a tip has a story, for example “my son-in-law works for us. He and my daughter just had my first grand baby. 12 weeks.”
Naturally, people wanted to show their support, she says “because they were saying, ‘Awh, keep the extra for a little gift for Daisy.’
She says there haven’t been any chargebacks yet, “but, ask me, let’s see she’s [Daisy] three months, so ask me in another ten months and let’s see if he’s lost money towards his new baby girl.”
What she’s saying is the story of generosity sometimes behind a tip is cast out the window.
“You play the game. You know, you follow the rules and like I said,” says Jacobs, “every single one I’ve been denied.”
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