Restaurant Realizes Maybe It Shouldn’t Force Servers To Pay Credit Card Fees Out Of Tips

Earlier this month we told you about the Minnesota restaurant owners who decided the best way to offset increases to the state’s minimum wage was to deduct credit card transaction fees from servers’ tips. While it’s legal for businesses to do this, a poll of Consumerist readers found that 91% of you think it’s not a wise idea. Looks like the restaurant owners have finally gotten that message.

In a statement to local media yesterday, the owners of Blue Plate Restaurant Company, which operates eight restaurants in the state, announced they had stopped dinging servers’ tips to the tune of 2-3% to cover the cost of credit card transaction fees.

The federal Fair Labor Standards Act allows for these fees to be deducted from tips, so long as the employee is still earning at least the minimum wage after the deduction.

But employees at Blue Plate restaurants didn’t see why they should be penalized when the servers have no say over whether customers pay in cash or with plastic.

“It’s their choice to accept credit cards, and the customers’ choice to pay with them,” said a server at the time, “it’s not up to me.”

Following the negative public response to the news, Blue Plate is changing the policy.

“We have always listened to our guests and our community,” wrote one of the owners in a statement. “Blue Plate is a family of small neighborhood restaurants and we value the hard work of our employees more than anything. Before we were founders we were servers, [we] built hundreds of meaningful relationships with our employees and guests. It’s our core; our people understand our values. We’ve reflected and decided to try a different approach that will give our communities a clear indicator of who we are as a business.”

[via Eater]

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  1. MathManv2point0 says:

    I know I’ve said this before but all the gas stations in my area offer gas for $0.10 cheaper / gallon (or about 2.5%) if you pay in cash. Do the merchants agreements (like those with restaurants) with credit card agencies prevent them from offering a cash discount?

    • SingleMaltGeek says:

      I believe that and the ban on minimum purchase amounts were both removed from the merchant agreements around the time the CARD Act was passed… but I’m too lazy to find a citation, sorry. :)

      • MathManv2point0 says:

        I will one-up you by saying that I believe that merchants can still require (at-the-most) a $10 minimum charge for credit card purchases. How do I one-up you? I also am also not looking up a citation. heh