Can you check the math on this? (Details)
Asked by
GloPro (
8404
)
May 12th, 2014
from iPhone
I took a part time job. When credit cards are run at the end of the night and my tips are determined, my boss requires me to give him 3% back on those tips for the swiping of the card charge. I’m terrible at math, but it seems off somehow. Can someone help correct my logic?
Here’s how I see it, and maybe I’m off, I really don’t know.
Say I have $100 in tips, for easy math. So the swipe fee is $3. I give him that $3 and am left with $97. But the original amount in actuality with the 3% charge is $103, is it not? When I give him $3 and walk with $97, doesn’t that total $6?
Is his request fair? Does the math work out, or is he kind of making money on the deal?
Thanks in advance.
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7 Answers
They don’t add the swipe fee on to the customers bill, they deduct it from the restaurant’s total.
The original amount is $100, not $103. The swipe fee is deducted from the total charged, so he submits $100 in charges to the credit card company, they credit his account with $97.
Your boss’ math is correct, even if his business sense is lacking.
If you earned $100 in tips, then your charge – according to the rule your boss uses – is $3, and your net is $97, as you first assumed. (I don’t know how you could have thought that your tips minus a charge would make your tips higher.)
Where his business sense is lacking is being so penny-wise (even though I understand that the restaurant business often operates on a narrow margin) is in charging you such a niggling amount. When you do your job right, you encourage more people to frequent the establishment and spend more, which goes to his bottom line. Nickle-and-diming you for the credit card charge is going to be counter-productive to him eventually, if it isn’t already.
@CWOTUS, so, to be clear… His fee for the swipe is 3%. The credit card company deducts that from the $100 instead of billing him 3% of all charges once a month?
The credit card company assesses him 3% on “all charges” (at the end of the month, I presume). Your boss is just coming to you for the 3% of the charged amounts (the tips, when put on credit cards) that go to you.
Just be sure that you’re not charged the 3% on cash tips, on eat-and-run customers who don’t pay for their meal at all, or on customers who stiff you for the tip even if they pay the amount on the bill.
So the $103 may have just been what’s throwing you off.
The $100 is not the credit card company’s money, it’s yours. If you owed $100 to the credit card company and they also charged a 3% fee, then that’s how you’d get $103—the total amount of how much you’d owe.
Think about it like this. Your boss is only getting $97 from the credit card company because the customer is paying $100 and the credit card company is taking $3. There is no $103.
The credit card company gives the money to your boss not the other way around. Your logic you are thinking your boss is paying the $100 plus the fee.
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