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Credit Card Tips Cost Steak 'N Shake Servers

Tips Will Be Trimmed To Cover Processing Fee

 

POSTED: 6:05 pm EDT May 10, 2011

 

INDIANAPOLIS -- Some Steak 'n Shake servers are upset the Indiana-based chain is now trimming tips to cover credit card costs.

 

Starting Tuesday, waiters and waitresses who get tipped on a credit card will have to use a portion to cover the cost of processing the plastic -- 2.5 percent per transaction, 6News' Rafael Sanchez reported.

 

A Steak 'n Shake server who spoke to 6News on the condition of anonymity for fear of losing her job called the new fee excessive.

 

"That's the cost of doing business. That's an overhead. The server has no say in whether we accept credit cards," she said. "Next time, they'll want us to pitch in for rent, electrical bill. Where does it end?"

 

Employees were asked to sign a document agreeing to the new rule. Those who object can be reassigned or will be asked to quit, the server told 6News.

 

Officials with the Indiana Restaurant Association said state and federal law allow restaurants to pass on credit card fees to their employees.

 

"No employer can pass on 100 percent of tips put on a credit card. They don't receive these funds. They are withheld by the credit card company," said organization CEO and President John Livengood.

 

Livengood said some restaurants have established service charges to achieve the same goal, although he said the practice is not as common in Indianapolis as it is in other parts of the country.

 

"They'll add a service charge instead of a gratuity. That way, that money becomes the restaurants' money and they can then use it to pay wages and cover costs of the business," Livengood said.

 

Florida-based Darden Restaurants, which operates Red Lobster, LongHorn Steakhouse and Olive Garden, said it does not pass on credit card processing fees to its servers.

 

Several industries claim the credit card processing fees are cutting into their profits.

 

Restaurant and gas station owners are among those supporting a new federal law that will cap the credit card processing fee at 2 percent. The law is set to go into effect in July.

 

In turn, the banking industry said any caps will force it to jack up prices and cut services.

 

Steak 'n Shake did not return calls or emails for comment on the new rule.

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what a truly horrible idea, passing the costs of cust credit card usage fees onto your waitresses! ugh... biglari is turning out to embody the worst traits of unbridled capitalism run amuck. his sense of entitlement at the expense of others seems to know no bounds.

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what a truly horrible idea, passing the costs of cust credit card usage fees onto your waitresses! ugh... biglari is turning out to embody the worst traits of unbridled capitalism run amuck. his sense of entitlement at the expense of others seems to know no bounds.

 

I think this is only for the cost of credit card processing for the amount of the tip.

 

i.e.  if you get a $1.00 tip via credit card, then you only net $0.98 after the processing fee (on the tip amount only!) is deducted.

 

I've worked as wait staff in the past. I really don't think this is a big deal. 

 

Ask yourself--why should the business subsidize the portion of the credit processing fee that would be attributed to the employee's tip?

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The following from a guy who's initial investments were funded by tips earned during years of bartending.

 

There's an element of the population, can them "We's" which look for the greater good in a given situation. This is done to their own detriment at times, but understanding that the one needs to be cognizant of the needs, desires and motivations of others is considered in their decision-making process. Another element, we can call them "Me's", look at each and every situation as a means by which they can benefit, the greater good be damned. The latter element will utilize any fact at their disposal, will fabricate facts if need be and will use logic, with varying levels of distortion/perversion, to justify a decision which has no other benefit but to line their own pockets. It is increasingly clear that Mr. Biglari is one of the "Me's" out there.

 

What's more interesting is that as a "me" achieves some success, they take their behavior to a higher level...increasingly using perverted logic in the process. First, know that these folks are quite smart to be honest. The brains and energy they possess allow them to pervert the logic to the level that they do. Their narcissistic tendencies see to it that they get more brazen and brash which as a deleterious effect on their lives. Bernie Madoff. Tiger Woods.  Arnold Schwarzenaggar. Rod Blagojevich. Each of these folks did things that were wrong but, through some amount of perverted logic, they rationalized as being acceptable, if not right.

 

The music does end for these folks. Perhaps not to the level of the individuals referenced above, but it does end. It may end in some sort of regulatory action against them, or they may find themselves embroiled in lawsuits, or they may gamble substantial portions of their net worth on what ends up being a bad decision and lose their wealth. It depends. What IS consistent, across the board, is that these folks lose all levels of credibility, influence and dignity. Their reputations are eventually shattered such that they become a joke. The individuals above and others in the public eye experience such shame that they become punch lines to late night television comedians. Other, non-public figures, experience similar losses, just on a more intimate scale. And this happens ALL OF THE TIME.

 

Mr. Biglari, if money and power are what you seek, understand that if you do not stop this behavior, that is all you will have, and you will lose any sense of dignity and reputation. Don’t believe me? Try asking an objective bystander who is not somehow trying to get money from you or whom you cannot affect by their answer. You will find out that your list of “true” friends and those who truly respect you will be able to fit on a post-it note.

 

 

-Crip

 

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Everytime I get to read something about him, I found how deep this guy can get to make some $. That's shocking.

 

Smart? I find it very easy intellectually, but very tough on the moral side.

 

That's not a smart way to make some money. He's a devil on costs, and that's all. No, I should add that he's a devil on every costs, except the cost he charges to others. He's a sweet little angel on his own cost.

 

What about take all the credit card fees and charge them against his own compensation?

 

 

 

 

 

 

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I think this is only for the cost of credit card processing for the amount of the tip.

 

i.e.  if you get a $1.00 tip via credit card, then you only net $0.98 after the processing fee (on the tip amount only!) is deducted.

 

I've worked as wait staff in the past. I really don't think this is a big deal. 

 

Ask yourself--why should the business subsidize the portion of the credit processing fee that would be attributed to the employee's tip?

 

Simple.  The employee gets no say at all in whether or not they take credit cards.

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Penny wise and pound foolish.  Imagine the time it will take to calculate this 2 or 3 percent, plus antagonizing of the staff.I think he forgets they are his ambassadors to the public.

 

Calculating it is pretty easy. Antagonizing the staff is the issue.

 

BeerBaron

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