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Will chip debit cards make tipping awkward?

By Claes Bell · Bankrate.com
Friday, October 2, 2015
Posted: 12 pm ET

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Stiffing a waiter may soon get a lot more awkward, thanks to the transition to chip debit cards and credit cards.

Merchants that haven't upgraded to an EMV chip card terminal may have to pick up the cost of fraud, rather than the bank that issued the card.

Chip card terminals (once properly activated) work differently than the swipe terminals, and as Ian Kar over at Quartz points out, that's going to cause some awkwardness when it's time to pay at your local restaurant.

Basically, instead of taking your card away and bringing it back with a receipt for you to leave the tip amount and sign, the waiter will bring a wireless chip card terminal to the table. You'll plug your card in, sign or enter a PIN, and have to leave the tip amount then and there.

That's fine if you're planning on leaving a tip that will leave a smile on a server's face, but in cases where a server provided subpar service, or if you're just a bad tipper, you'll probably miss the privacy you enjoyed before.

I don't know about you, but I can see quite a few confrontations between angry servers and patrons starting this way.

What do you think? Will entering your tip in front of your server be awkward? Would you leave a bigger tip than you would on a paper receipt after the fact?

Follow me on Twitter: @ClaesBell.

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6 Comments
Claes Bell
October 06, 2015 at 4:10 pm

@Nick. Thank you for the interesting insights from a veteran server -- always great to hear from people "in the trenches" so to speak in the areas that I'm writing about. One thing I feel I should note -- when a restaurant converts fully to chip card technology, which it is likely to do at some point, because of the fraud liability shift that's happening, you will have to dip into a terminal. It just hasn't gone into effect everywhere yet.

nick foster
October 05, 2015 at 2:24 pm

As a server for thirty plus years,I feel I can comment on this from a somewhat authoritative viewpoint A chip card can still be swiped-I did this last night-and therefore this is all baloney.Also,as far as the IRS comment by mawiseman,your info is wrong. The IRS accepts that servers must tip their support staff out of their total tips,and therefore set a floor of roughly 10% as the base total that must be claimed.So when a server gets less than expected,the only concern is that he/she ends up tipping support staff from their own pocket.Audits of servers are EXTREMELY rare and usually precipitated by the establishment having a previous tax issue-not because a server got a bad tip.All of the people that like to comment about restaurant policy and tipping issues should fact check with someone who actually is working in the business .

Grandy A
October 05, 2015 at 10:47 am

NOPE .... you DON'T "have to leave the tip amount then and there."
You can always leave a cash tip AFTER the card transaction. SIMPLE!

I just solved you dilemma !!!!!

mawiseman
October 04, 2015 at 11:16 pm

A friend of ours works as part of the wait staff at a nice restaurant in Louisville. He said the IRS had started estimating the amount of tax they think is owed based on sales. Anytime he gets a tip of less than 18% puts him closer to an audit. Funny, if you're worth millions your tax bill can be low but in the service industry they automatically think you are cheating if the sales divided by staff does not come close to that 18% number.

Nelly
October 04, 2015 at 8:07 am

Always leave the tip blank and leave cash tip regardless of the amount. As long as you're leaving >10% it will only help the server come tax time.