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Techtyger: Credit Card Companies Make New Rules Involving Tipping



From TechTyger:

Saw this at work... I work for a credit card processing company. The card companies have gotten together and made some new rules about tipping. 
“Based on the card brand rules the tip tolerance must not exceed 20% and depends on the merchant category code. If the final transaction amount does exceed the set tolerance amount the merchant must obtain an additional authorization and process a separate transaction for the amount that exceeds the tolerance amount."
And merchants -hate- to run multiple transactions, because each one costs them money... a few cents, mainly, but they're as bad as soccer moms with coupon binders... 
There was more to it, but a lot of technical jargony stuff, for different industries.  Not sure how it'll work in the terminals, whether it'll automatically do a new transaction, or prompt for 'excessive tip' or something... some of them will currently require a password to put in a tip over 25%.






This is where it's much easier to just give the tip in cash at the end of paying.


My credit card company sends me an email if my tip was considered generous.


By 'credit card company' here, I mean Visa, Mastercard and Discover. Amex is the Apple of credit cards, they do everything differently apparently just to be a pain in the ass, more expensive and less utility.

These are going to be 'if you have a credit card' rules, not 'if you have a credit card from Joe's Bank of Whatever'...

The 'jargony stuff for different industries' was restaurant , retail with tips (like a nail salon), equipment or car rental, etc.(I expect that last to bite some asses...)

Bored at the Bookstore

A reaction to the multi-hundred-dollar tips? Guess I'll just have to continue to tip in cash, then. I tend to write "cash" in the blank for the tip and leave actual Uncle Sam's green stuff instead of charging it. Mostly. Avoids the one in a thousand server who fills in the blank him/herself, I guess.


More likely, part of the shift to all EMV in the US, and reduction in complaints for overcharging. Some banks when the card is first run at a tipping place will add 20% to the authorization to leave room for the tip. This makes some customers freak out about being 'overcharged' because they see the authorization on the account.

The process is authorization request ("Does this guy have this much money available?"), reply ("Yes, here's a code that says we put it on hold for you"), adjustment for tips or whatever, then capture. ("Ok, he's gone. Here's the final amount, send it to me.") The final amount of money is withdrawn from the bank and sent through us to the front end processor, who pays it into the merchant's account.

Sometimes, for various reasons (communication errors, where the terminal didn't get the authorization reply, POS software infested with data vampires, whatever) it has to be authorized more than once, and customers will flip right the fuck out about it. The merchant calls me, and I explain the above. The customer's bank is the one that puts the hold on the account, not us, and different banks have different ideas of how long to hold it. The authorization code is good for 7 days, but the bank can hold uncaptured authorizations anywhere between 24 - 72 hours, with most of them being around 48. So, card is swiped, POS goes 'derp', card is re-swiped, customer goes up in a mushroom cloud and threatens to kill everyone you've ever loved, for no reason.

Sadly, my hopes of EMV murdering tipping in general are to be unrealized.

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