Restaurant Credit Card Tip Fraud

If you are using your credit card at restaurants, be aware. One time, I ate at this Greek restaurant and later found out that my credit card was charged for a tip amount of more than 40% of my check. I filed a complaint with the restaurant and got my money back, but I was furious with what they did to me and others. Okay, believe it or not, employees at some restaurants charge extra tips on your credit cards knowing that you do not compare your receipt with the credit card statement.

Even though I call myself a savvy consumer, I do not compare my receipt with the statement amount, and I know that I got ripped off many times at restaurants. The only way I found out that I was charged for tips that I didn't give was because I used my American Express card. Amex is the only card that breaks down the base and tip amount. But, if you don't write down the tip amount on your copy of the receipt, Amex is no use because you will not remember how much you have paid in tips once the statement arrives.

Yes, I caught another fraud two years ago. At that time, I placed a take-out order at this pizza kitchen place and did not leave any tip. A few days later, I found out that the amount on the statement was not correct and compared the amount with my receipt. I was charged two dollars extra! This time, even though I did not use my Amex card, I could find out that something was not right since I bought the same pizza at other locations before, and I knew the exact amount without the receipt. Then, horrible things happened. The manager at this restaurant accused me of having remorse after leaving a tip and for "customer courtesy," he was refunding the $2. When I asked for the copy of the sales receipt, he said he would send it me, but he never did and we all know why.

How can we protect ourselves from restaurants charging tips that we never give to them? My brother who works at a major credit card processing company agreed with my claim and said that he has seen some restaurant merchants charging tips that are not authorized. He also said that when cardholders dispute the tip amounts through their credit card companies, even though merchants fraudulently charged tips, but the tip amount is the usual (15%-20%), cardholders have a greater chance of losing the chargeback request.

Here's my advice on how to prevent restaurants from charging extra tips on your credit card:
1. If you are not paying the tip using your card, make sure you put 0 on the tip line and CLOSE the check by entering the total amount at the bottom even in quick-serve restaurants.
2. If you are paying the tip with the card, make sure you CLOSE the check by entering the total amount by adding the base and the tip amount and also write down the same information on your copy.
3. Although it is a hassle to keep your receipts, keep the restaurant receipts separately and make sure you compare the receipt with the statement, and report any discrepancy as soon as possible.

Restaurants manually enter tips after you leave, and if you are not nice to them, who knows what they will do to your tip amount? But remember, most restaurants are run by honest people and do not suspect them as if they are criminals.
Protect yourself by following the steps above.

Disclaimer: The information on this blog is general information only and may not apply to an individual's circumstances. Please consult a professional regarding your particular circumstances.