How are tips rung up on a credit card?

I prefer leaving the waitress’ tip with cash on the table. Yesterday I didn’t have any singles. I added the tip to the credit card ticket.

The cc receipt the waitress brings has already been rung up. It’s not clear if the charge has gone through. I didn’t see an authorization number. I’ve always assumed the charge has been made and my signature is a formality.

What happens when we add a couple dollar tip to the receipt? (the IHOP meal total was less than $11.)

Is the tip run through as a separate charge?

Or is it added in and somehow they complete the cc transaction?

I’ve always been a bit nervous about adding a tip to my cc receipt because I never see a final charge until the bill arrives weeks later. I have no idea what happens after leaving the restaurant.

That’s why I leave cash tips when possible and write tip on table on the cc receipt.

It’s not run as a separate transaction as far as I can tell, they just add it to the overall credit card charge.

Added in somehow. When I check my online banking, the pending transaction is for the amount of the bill only. When the transaction becomes final, the amount is the post-tip total.

Since chip cards have become prevalent, some restaurants where you pay at the cash register (rather than paying your server) allow you to enter the tip as the charge is rung up so the pending transaction is for the entire post-tip amount.

How would adding a tip make it easier for fraudulent alteration of the charge to take place?

The amount added could be altered, for example you leave a $6 tip and someone squeezes a one in to make it $16.

I’ve had situations where I found myself running low on cash. I paid my tab to that point in cash, then switched over to my credit card. I then pay $12 on my card, but add a tip to cover the cash part, so say another $12,

My credit card app alerts me at some point later, asking if I really intended to leave a $12 tip and I click “yes”.

I discovered this by accident a few years ago. My wife and I had lunch at a local place (paid and tipped on debit card) and then went home, where I immediately sat down to balance my checkbook(monthly thing just happened to coincide with lunch). When I logged into my checking account, I noticed the lunch charge was showing in my pending transactions. The price showing was not what showed on the receipt, even when I added my tip to it. I don’t remember the exact difference, but it was $8 to $10 more than my total plus tip.
Thinking shenanigans, I called the restaurant and spoke to the owner. They were shocked, but promised to look into it. The next day they called with the information. It seems that the company they use to run cards through will add a certain percentage to the charge to account for tips. This is sent to the bank as a pending charge, which ensures there is enough money to cover the charge and a tip if it’s on there. When the restaurant “closes the books” at the end of the day, they add in the tip and the pending charge is amended to show the exact amount charged. When I checked my account after they explained, the pending charge had indeed changed to the exact amount (bill plus tip) and finalized on my bank account. We both learned something that day.

Apparently gas stations do something similar with cards when you pay at the pump. When gas prices were $4+ per gallon a few years ago, the card companies raised the amount that they would put in pending. I don’t know what it was prior to the gas price increase, but after the increase, the gas stations around me all had signs stating that paying at the pump would put a $75 hold on your card until the end of their business day when sales were finalized. People who didn’t have the cushion in their account were encouraged to pay ahead of time, wherein the exact charge would go in, instead of the whole $75.

I have not worked in a restaurant, but I have managed billing and payment systems at a large dot com. At the time the slip is presented to you, the restaurant has only put through an authorization. After you sign the slip and add a tip, they are still just putting through an authorization. I am guessing the second authorization is put through on the same authorization number, superseding the first one. Credit card transactions settlements occur in batch–that’s when the charges are actually posted to your card. If you look at your credit card statement or online bank information, you will see that the transaction always posts a day or maybe two after the date of the transaction.

Responding to Riemann…

The meal total is printed and can be checked before I sign the receipt.

I never see the ticket total after adding the tip.

I write $2 on the receipt and sign. How do I know if they rang up $5 or $20?

A big tip would stand out. I’d expect maybe making a $2 into a 5.

Most people are very honest. The few bad ones can give a restaurant a bad reputation.

To elaborate on Emergency911’s post, when a merchant runs an authorization, the bank counts that amount towards your credit limit before it posts, to prevent you from going over your credit limit when they settle. Some businesses auth for more than the purchase amount in case there is a tip. IIRC they can settle for less than the auth amount.

The sign may have said that but that’s not how it works. The bank decides how long to hold the funds, not the merchant. Once I had to release an auth for a customer* and I had to jump through hoops to convince the bank to drop an auth that we were not going to settle. (However, that was in 1999.)

In some circumstances, an auth will never settle and the bank will eventually drop it from your account. For example, some businesses, like car rental companies, will auth when you check in, then when you pay you can pay using some other method and the auth never settles. Sometimes if you return an item the same day you bought it, the merchant will simply not settle the auth, rather than doing two separate transactions.

*He cancelled his transaction with us so we took the auth out of settlement but he was maxed out on his credit card and couldn’t buy a plane ticket or something.

When I eat a restaurant and ask for the bill, they bring it over with the current total on it. Then I write whatever amount of tip I want and add them together and write the final total. Then the waitperson takes that and brings me back a receipt with the total + tip on it, that I could take with me if I cared about it.

I save my receipts and check my credit card statement every month. That’s about all you can do.

In 40 years I have only one found one mismatch on a restaurant charge. It was because I added wrong. They charged me for the correct tip and corrected my addition for the total. Merchants are required to retain the receipts for a certain amount of time and the bank actually sent me a copy after a filed a dispute.

I’ve never had the waitress return with an updated receipt.

A waitress returns with two copies of the receipt, one which you add the tip to and sign and return to the waitress, the other you can take home. Optionally, you can write the same amount of tip and total on the take-home one for your reference.

You are right, a server will not bring another copy of the receipt after that.

Manson seems to be saying that he writes the tip and total on the food bill prior to giving his credit card. In that case, presumably they could include the tip in the printed amount shown on the credit card slip for you to sign. I’ve never heard of anyone doing this, and I think at most restaurants you’d have to draw attention to what you want them to do.

Well, now I’m questioning whether I’m correct or not. I haven’t been to a restaurant in a few weeks and don’t usually pay attention.

I do know that they bring the bill holding portfolio to me twice, but I’m not sure of the order I do things. I’ll try it out some night when I’m not feeling ill .

And to be frank, that honesty is what they value and how the restaurant is valued.

I once had to call back a restaurant a week later as the bill was $40, I tipped $6 as the service was medium at best. So when $48 showed up, I was surprised as this was the first time I’d seen any discrepency. The manager refunded the whole meal, apologized for the inconvenience, and stated that the server would be let go. Places need repeat business and a good reputation to do well.

I was at Serendipity 3 in NYC 15 years back, when Zagat and TimeOut ruled the ratings scene, and witnessed a guy slipping the host $100 to be seated faster than the 60 minute stated wait. He and his date were seated 2nd. After being seated shortly thereafter (1 or 2 parties later), I requested a manager and reported what I saw. She said that she would handle it- the host was different as we left- and we had $20?$40? deducted from our bill and a note that said, “We apologize for your experience, we hope your next visit meets our high standards!”

That is to say that CC changing of numbers is fraud and truly awful service. It will not be tolerated by anyone.

This does happen often at restaurants in hotels or clubs and occasionally in a foreign country, fwiw.

If I may hijack this thread to ask a question which I think is sufficiently close to the OP to justify that hijack: I’ve always wondered if restaurants lose money on tips paid by credit card. We all know that the restaurants pay processing fees to the credit card companies (and payment network operators, and god knows what the various players in a credit card transactions are called). When you pay the tip by card, I presume that this fee is also levied on the tip component of the overall amount. Do restaurants typically pass this on to their waiters? I’ve always imagined that at regular intervals, say once a month, restaurants pay out the aggregated tips that their waiters have earnt during that month and that have been paid to the restaurant by card. Is it common for restaurants to deduct credit card fees from that payout? And, in relation to that: I would presume that there is some kind of float involved, in the sense that it may take longer for the restaurant to receive the payment from the credit card company than it takes for the waiter to collect the tips from the restaurant. Is it common for restaurants to withhold the pay-out of the tips until the credit card payment is settled, to avoid that they have to advance the tip payments to their staff?

Crackerbarrel, around here at least, asks you how much you want to tip before running your card. That way the check you sign has the total for you to verify first. Most restaurants don’t do that. I make sure to put a big dollar sign close to or touching the left digit, accentuate the decimal point and write all numbers close together so no one can sneak any extras in there, but I’m pretty sure I don’t need to. I’ve been eating at restaurants for a long time, and using credit/debit cards for most of that time, and I’ve never had someone change the numbers. The downsides to the restaurant and waitstaff are huge, and the benefit is minor. At worst you might get a few innocent mistakes in a lifetime.