Is It Always Better to Tip Cash on a Credit Card Bill at a Bar or Restaurant?

Is It Always Better to Tip Cash on a Credit Card Bill at a Bar or Restaurant?

Is cash always king?

By Tamara Palmer

We've previously answered burning questions about restaurant tipping, but one deceptively simple question didn't come up before: Is it always better to tip a server or bartender at a restaurant or bar in cash even if you use a credit card to pay your bill?

"At every bar I've worked at or talked to, cash tips are pooled and aren't reported, but credit card tips either go on the paycheck or are paid out then and there," shares Clair McLafferty, a bartender in Birmingham, AL and author of The Classic & Craft Cocktail Recipe Book. "Either way, your server/bartender receives more and is penalized less in most markets if they're tipped in cash."

McLafferty has made everything from Aviations to Zombies for bars and catering companies, and in both cases, cash reaches the server quicker.

"At my current and previous regular bar gigs, cash tips and credit card tips were pooled at the end of each shift," she explains. "Cash tips are usually paid out to each server and bartender on the spot, and then credit tips are included on biweekly pay checks. When you serve or bartend a catered event, the catering company is paid by check at the end of the night, and then you in turn receive a check. Credit card tips — or a tip left on the check — are rarer, so cash tips can be the only way to put a little extra money in your server or bartender's pocket."

That's not always the case with restaurants, where cash tips are often collected, possibly pooled and included in paychecks that get taxed.

"In some places, I've even been required to tip support staff based on my sales —not my actual tips," says Auburn Scallon, who has worked as a server at restaurants in New York and Seattle. "So on a bad night my credit card tips, claimed automatically, could be more than I actually received. Cash always wins."

Ultimately, credit card tips are definitely preferred over no tip at all (don't do that!), but if you've got the cash on hand, your server will appreciate it, even if it doesn't get to come home with them that very night.

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