Restaurant Takes Credit Card Fees out of Server Tips to Battle Minimum Wage Increase

August 14, 2014, Written By Natalie Rutledge
Smiling waiter portrait

Minnesota recently raised its minimum wage to $8 an hour, which is $0.75 higher than the federal minimum wage. While this small increase has benefited employees, it has also led merchants to come up with ways to offset this cost increase.

One restaurant in Minnesota began adding a $0.35 minimum wage charge to each of its tickets instead of raising the prices on their menu. The restaurant’s manager defended the action by saying that the restaurant “wants people to be aware we’re a small business and we’re trying to stay open…if you raise prices and don’t tell anyone, that seems more backhanded to me.”

Another restaurant is taking money of out the servers’ tips. If a customer pays with a credit card, the interchange or swipe fee for the credit card purchase is taken out of the tip. Since the fee is usually 2-3%, this will result in less money for the server.

This is compounded by the fact that servers do not get paid minimum wage. They rely on their tips as a source of income.

One server at the restaurant argued that the fees should be the owner’s responsibility, not hers. “It’s their choice to accept credit cards, and the customers’ choice to pay with them. It’s not up to me.”

At this time, there are no regulations in place to prevent restaurants from charging their servers for credit card transaction fees, but this could result in some ugly employee relations in certain parts of Minnesota.



The information contained within this article was accurate as of August 14, 2014. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Natalie Rutledge

Natalie Rutledge majored in Communications at Mississippi State University. She was in sales for a number of businesses and spent nine years working as a communications advisor to various entities. Natalie can be contacted directly at [email protected]
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