Can’t process payments without stealing from underpaid staff? You shouldn’t be running a business

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August 5, 2015 by Nash Riggins

15660929125_966b401454_bBeing a waiter sucks. You’re on your feet all day wearing a disgustingly fake smile, getting blamed for corporate price hikes and yelled at when your sloppy chefs produce something inedible. The fact that this job typically brings in nothing but a minimum wage is completely insulting – which is why every single penny your servers earn in tips should be pegged as a tiny victory for humanity.

Until corporate steps in and takes it away.

You might not know this, but every time you tip a particularly helpful waiter or waitress using a credit or debit card, a cut of that money is being snatched by multinational chains who are doing their best to pinch a penny or two. Pizza Express, Bella Italia, Café Rouge, Prezzo – not every restaurant does it, but it’s a fairly common practice.

Why, you ask?

Well, every time you pay for a meal by card, it costs the restaurant a few pence to process that payment. So, the guys managing these companies have come up with a brilliant idea. Instead of paying for this unavoidable overhead out of pocket, why not meet the cost by skimming off the top of whatever crumbs you’ve left your server as a tip? Most of the chains that take part in this practice are snatching between 8-10% off of every single tip. But don’t worry, it’s not stealing! It’s just what the industry lovingly refers to as a “tronc” fee. Because when you add corporate jargon to something, it becomes perfectly acceptable, right?

Not everybody seems to think so.

This week, trade union Unite has announced plans to stage a series of demonstrations outside Pizza Express restaurants to protest against their policy on tip-snatching – and CEO Richard Hodgson would do well to listen. Least of all because his company’s rules on card payments completely discourage waiting staff from going that extra mile to demonstrate great service. After all, what’s the point of smiling for a tip when you know your boss is just going to turn around and take it away again?

Okay, so we’re talking about the theft of small change – maybe a pound or two per night. But to your average, run-of-the-mill waitress, that money makes a pretty big difference.

Let’s break this down.

Most servers earn a minimum wage of £6.50 (probably less if they’re a university student doing this part-time). So, some poor sod can put on a soul-destroying, yet charming, smile for eight hours a day, five days per week, and they’re barely teetering above the bread line. They’ll be able to afford rent, bills, maybe their bus fare to Pizza Express every afternoon and…that’s about it.

It’s a bit sad, but to an underpaid waiter, £20 per night in tips means the difference between eating Super Noodles and eating discount, out-of-date vegetables from the bargain shelf. It means being able to go out for a rare pint with friends, rather than stay inside and stew in poverty. How unbelievably cruel, then, is it to take 8% of those evening tips away from a waiter just so multinational giants don’t have to pay for something they should be budgeting for in the first place?

Okay, it costs big companies a few pennies per transaction to process card payments. That’s super sad. But you know what? You’ve gotta spend money to make money. The majority of transactions in this country are now made by card. Nine out of ten adults have got a debit card – and last year, only 3% of adults said they predominately used cash to pay for things like meals out. Around 2.3m consumers say they almost never pay with cash (I can’t remember the last time I saw the Queen hiding in my wallet).

Translation: it’s time for whiny corporate managers to catch up with the times.

This is 2015. Most people are going to pay by card. That makes the miniscule processing fee attached to those transactions a regular overhead expense that must be budgeted for. And so if your franchise can’t facilitate this seemingly unaffordable act of modern sorcery without punishing underpaid staff for demonstrating great service, perhaps you shouldn’t be running a business at all.

Just some food for thought.

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