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GloPro's avatar

Can you check the math on this? (Details)

Asked by GloPro (8306points) 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

zenvelo's avatar

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.

CWOTUS's avatar

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.

GloPro's avatar

@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?

CWOTUS's avatar

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.

GloPro's avatar

Thank you!

dxs's avatar

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.

JLeslie's avatar

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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