How do restaurants charge your card for the tip if they already ran your card and gave it back to you before giving you the receipt you wrote the tip on?
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After your server collects the receipt the tip amount is entered into the computer and the check closed out with the final total sent to the bank. When the card is run it’s memo posted to the bank and once the check is closed out, the final amount is sent to the bank. It’s like when you enter your card to get gas and they check to make sure it’s a valid card.
When a company runs the card, the transaction is only **posted** to ~~what is called the Automated Clearing House (a national service that handles most all transactions between US banks)~~ the credit card provider.
The ~~ACH~~ provider usually takes a few days to process, after which the debit is considered **settled**.
While it is processing, the seller can update the transaction with additional fees that are incurred on the debt that has been made (in this instance, the tip)
Edit: was wrong about the ACH handling card transactions.
It’s called “Batching”. (Domino’s employee here) The authorization when you originally pay, doesn’t actually mean much. It’s just checking that there’s actually money. When I close down the store at the end of the night, it finalizes credit card payments, including adding gratuity to any tickets that need it. The payment request is submitted that night, and you usually receive the actual charge the following day (sometimes longer). Some places may be slightly different than this.
It’s called “Batching”. (Domino’s employee here) The authorization when you originally pay, doesn’t actually mean much. It’s just checking that there’s actually money. When I close down the store at the end of the night, it finalizes credit card payments, including adding gratuity to any tickets that need it. The payment request is submitted that night, and you usually receive the actual charge the following day (sometimes longer). Some places may be slightly different than this.
In Canada, they bring a portable machine to your table and don’t take your card. You see the amount due, insert your card, enter your pin, and can enter a tip. It prints out the receipt, and you’re good to go. Card never leaves your possession. So much more efficient and secure. US should adopt the same thing.
In Canada, they bring a portable machine to your table and don’t take your card. You see the amount due, insert your card, enter your pin, and can enter a tip. It prints out the receipt, and you’re good to go. Card never leaves your possession. So much more efficient and secure. US should adopt the same thing.
I think it’s stealing. You hand them your card for an authorised transaction of the price of the meal. If they add anything on then they are stealing, and I will be calling the police! I went to one restaurant that added $50 on top of the bill as an access fee! FFS. Fastest way to lose your customers is to start robbing them at the till.
One of the teens at our church was charged by the police for ripping off customers at the restaurant where he worked by increasing the size of customer tips. This followed a customer complaint. He was fired but what the outcome of the legal charge was, I don’t know.
Alternatively, I once received an email from my credit card company wanting to know if I had actually given a rather large tip on a meal. It asked, “did you get really good service at such and such restaurant on such and such day, or was this a fraudulent charge”. The tip was legitimate as we had used the restaurant for a business meeting occupying their table for more than an hour while drinking only coffee.
I also got a telephone call from my mother’s credit card company (I had her power of attorney) wanting to know if she bought a snow board and some weight lifting equipment. Seemed an unusual purchase for an 88 year old woman.
So, there are checks built in to the credit card system.
I think it’s stealing. You hand them your card for an authorised transaction of the price of the meal. If they add anything on then they are stealing, and I will be calling the police! I went to one restaurant that added $50 on top of the bill as an access fee! FFS. Fastest way to lose your customers is to start robbing them at the till.
Not sure about all areas but in Canada terminals can be in Pre-authorization mode or final mode.
Pre-authorization usually goes for more than the total. So if $100 charged the terminal just asks the bank “is this card good for $120” and gets a yes or no. The amount is not posted until it is finalized. It can be changed before posting.
Most restaurants and gas stations use this mode. There is also a final mode that most other stores use and the amount cannot be changed.
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