Confused with Tipping in America With Credit Card

So I'm in America at the moment and tipping via credit card has been highly confusing for me. Here's how the process has been so far:-

  • I ask for bill and waiter brings me a bill
  • I check the amount and provide my credit card and waiter takes it away
  • waiter returns with a receipt for my meal and on the receipt I can provide a tip
  • e.g. total = $40, tip = (i put $8 as it's 20%), total = $48
  • waiter comes back takes the slip and ask me to keep my card

I've been really confused by this process as I've paid for my meal, but I haven't paid for the tip? They don't take my card away to make the payment for the $8. I checked my statement and I've only been charged for my meal.

I assume credit cards in america work differently where they can still charge for x% for tips after a transaction is made? Is that it? Am I support to expect more transactions in my statement in the upcoming days or have I been getting away with not tipping this whole time?


  • +2 votes

    Just wait, the amount will be modified on the statement to reflect the tip. Yes, it can be done this way without the card. The Canadian system is better where the machine is brought to the table & the tip is all done on the machine at the tableside.


      Okay good to know it'll come through eventually. But does this mean that they're basically saving my credit card details somewhere, and that just makes me paranoid and what's stopping them from tipping themselves a little bit more.

      I'm going to be tipping in cash from now on, just feel a little off about the process, and why would credit card companies allow a business to charge more at a later date. I'd just feel more comfortable the Australian way wehre you add the tip using the machine so there's only 1 transaction.


        I believe they do a reconciliation at the end of each business day to account for the tips. Yes I was not feeling it as well. Such a weird process!

      • +1 vote

        They generally use the magnetic strip on your card rather than the chip or tap in the US. They do this because yes, the system actually takes a copy of the magnetic strip of your card which they can then use to charge your card again for whatever amount.

        Yes it's really insecure and I don't know how the US is still able to do this. Probably because their country relies so much on tipping.
        It's a massive security breach and a breach of PCI compliance, which is enforced by Visa/Mastercard to the rest of the world (including Australia). You would lose your ability to accept these cards if you tried this in Australia.

        I know people who travel to the US regularly who never use their everyday cards because they've had their cards skimmed multiple times.


          holy shit that's horrible. Thanks for explaining this clearly. Gonna try pay in cash as much as I can then.

        • +6 votes

          This is false.

          The way it works is like going to any pay at the pump. What happens is a pre-authorization is made for the full ticket price. The server later takes the pre-authorization code provided by the credit card servicing company and then amends the amount of the tip, if any. Your card will show a pre-authorization amount and at the end of the business day all of the amounts are reconciled and it amended on your card within a business day.

          The idea that they are storing the data on the mag strip is 100% false. The credit card processing service would revoke their ability to charge cards. And that's why the restaurant point of sales systems are there to handle the complexity of compliance and meet the legal requirements for handling credit cards securely.


    Tip in cash, also often receipts have how much tip you should give (I normally go 10-15%)

  • +3 votes

    In many places the tip is included in the bill. Then they try to slug you for an extra tip. So check your bill to see what you are paying for.


      Agreed, I noticed this in Hawaii. Thought it might just be because the island is so touristy. I quickly caught on.. None of that.


    I assume you are getting a copy of the receipt including your handwritten tip amount?

    That is how it worked here years ago. You will find the full amount will be processed to your card, just keep the receipts to validate.

    As mentioned by supasaiyan above, I found that most bills included suggested tip amount(s).

    I prefer how tips are handled there, as opposed to some places in Aust that give you an EFTpos machine where you are expected to add a tip amount before you enter your PIN.


    The amount will be updated. It probably takes a couple of days given you’re overseas.

    I think they swipe your card, then bring you the bill, you add the tip and they update it when it goes through.

    They are slowly getting portable machines so they can just bring you the machine and you add the tip.

  • +9 votes

    You would think Make America Great Again would start with ensuring your citisens get paid a living wage. Instead it means filling the swamp

    • -3 votes

      Unemployment rate in USA = 3.6% - lowest rate in nearly 50 years.
      Unemployment rate in AUS = 5.2%.

      Making America great again includes getting people back to work.

      • +1 vote

        China has a low unemployment rate too.

        Means nothing if it doesn't lead to a better quality of life


          More and more mainlanders may afford to travel overseas than ever before.


          China's unemployment rate is claimed at a similar rate to the USA - but their official rate is widely believed to be highly inaccurate.
          Are you suggesting that being employed is not better for quality of life than being unemployed? Curious.


            @blaircam: I'm saying a great country allows it's citizens to enjoy a high standard of living. Require tips to supplement a living wage is not a great country to live in so when will Trump MAGA??


              @chumlee: Oh - so you get to decide how the term is defined?
              Ok, you ever hear of Bill Gates, Warren Buffett, Jeff Bezos, Larry Ellison…???
              I think they have a pretty good standard of living. In fact, so do millions of other Americans - including millions who have found employment during the term of the Trump Presidency.
              The USA ALLOWS every single citizen to enjoy a high standard of living - but apparently only 87% manage to be above the poverty line. Are you suggesting that the USA PREVENTS anyone from enjoying a high standard of living? How?
              Do you mean that EVERY citizen must have a high standard of living for a country to be great? In that case no country in history has ever been great - and no intelligent person ever believed that was what Trump was claiming when he used the phrase.
              However, some other politicians have claimed something like this - "By 1990 no Australian child will be living in poverty" ring any bells?
              And you haven't answered my question - do you think being unemployed is better for living standard than a low-paid job?

      • +1 vote

        Consider the type of employment too, if those numbers have dropped because there's more casual/part time work and less full time work that doesn't exactly help make ends meet.


        While a lower unemployment rate is undoubtedly good, there are a couple of caveats with these stats.

        1. the type of employment and wages is important for these to have any meaning. In the US people can't survive on the minimum wage even in a full time role, and it has lead to the requirement for people to have 2 jobs just to survive

        2. the measurement of unemployment is an absolute joke. If you work for more than 1 hour in a week, you are no longer considered unemployed

  • +4 votes

    Quick tip:

    The tip percentage should be calculated on the BEFORE tax portion.

    So if you are somewhere that tax is approximately 8-9%, a quick way of approximately working out the tip is to double the tax amount.

  • +8 votes

    Rule #1 - never let the credit card out of your sight. You could up getting the card skimmed etc


      Thank you. I've let it out of my sight several times this trip, got me all paranoid. Waiters give me weird looks that I prefer to pay up front rather than have it brought to my table


        It's completely normal for them to take it out back, then bring it back to you

        Stop being so paranoid

    • -1 vote

      What? That's ridiculous

      Almost every server in every restaurant in the US takes it from you to process it and then brings it back.

      Have you ever been to the US?


    total = $40, tip = (i put $8 as it's 20%), total = $48

    A 20% tip? Were we not up in arms about a 10% GST on LVG not long ago?

    • +1 vote

      apparently that's the standard tipping rate here in the US. 10-15% is frown upon I've been told.


        Yep. But I refuse to tip the tax. So I give 20% of the pre tax amount. Thankfully tax in Washington State was roughly 10% so I would just double that as a tip.

      • +2 votes

        Damn, is it 20% now? I remember when it used to be 10% and then got upped to 15%, I asked what was going on, and was told "it was because of inflation". Either Americans are stupid or they think that we are, because the tip amount is a percentage of the amount. As the amount goes up due to inflation, so does their tip. Increasing the percentage amount as well is double dipping…

  • +2 votes

    Maybe waiter assumed the Aussie wrote "Work hard and be good to your mother".


    On a side note I have had many conversations with Americans when in the USA and they freely admit they hardly ever know how much to tip and sometimes they don’t know who to tip.

    • +1 vote

      Always tip the person who served you, they're the ones putting in any extra effort during your time in the premises.

      A rule of thumb for the amount to tip is to double the tax on the bill. Tax will differ by city/tax but it should amount to around 15% which is usually an average to above-average tip (10% being the minimum and 20%+ being excellent service).

  • -1 vote

    I believe it's the fact that you're trying to tip via credit card - you should always tip with cash.

    For most restaurants, cash tips are generally pooled together. At the end of a shift the kitty is then divided up equally between staff who worked that shift. Bar and casino staff have different rules, they don't usually pool their tips.

    Credit card payments go directly to the employer and the business account; I'd be surprised if staff received a single penny from credit card tips. Staff therefore have no incentive to charge you a credit card tip that goes straight to the boss in the hope you realise to leave a cash tip before you depart that will go to staff.

    • -1 vote

      Not true again

      Tipping with a credit card is fine, the only thing different is the net amount will be around 3-4% less because of processing fees

      • -1 vote

        If a business is paying 3-4% in merchant fees then they should shop around as the going rate is only about 1% - 2%


          Not even close

          Here, I'll cut and paste some information for you:

          When it’s all said and done, the average cost of processing payments for U.S. businesses that do between $10,000 and $250,000 in annual payments volume is between 2.87 percent and 4.35 percent per transaction.


            @TEER3X: Do a bit of research and you will see there are two scales of charges - swipe and manual.
            Swipe fees are as I stated, manual fees "Keyed-in transactions have a higher average processing fee of 3.5% to account for the higher risk"
            Why do I bother!!

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