Think Cash, Not Credit, At Steak ‘N Shake

Next time you go to Steak ‘n Shake, bring cash.

And use it, or you could be shortchanging your server by indirectly putting their tips into the credit card companies’ pockets.

Steak ‘n Shake has begun deducting 2.5% of all tips charged to credit cards from servers’ paychecks, according to television station WRTV in Indianapolis.

The reason? To pay for credit card processing fees.

“Next time, they’ll want us to pitch in for rent, electrical bill,” one server lamented to the TV station. “Where does it end?”

Credit card tips are “a ‘win’ for the guests (their preferred method of tip payment) and a ‘win’ for the Servers who generally receive increased tips,” according to the company’s Associate Pay & Tip Acknowledgement document servers were required to sign. “I understand that when tips are charged on a credit card, the credit processing company must be paid a fee for each dollar charged.”

Employees who didn’t sign the agreement authorizing the change were told they could transfer or quit the Indiana-based chain.

Is it right? We don’t think so.

A Steak ‘n Shake server doesn’t earn a huge pile of cash.

Passing on credit card fees to suck up 2.5% from what we imagine to be meager tips (since Steak ‘n Shake doesn’t sell alcohol and the food is very moderately priced) seems wrong, and not exactly a way to inspire employee confidence and loyalty.

We’re not sure how it’s going to pan out, but next time you head over, make sure you pay in cash. That way, your server gets the tip he or she deserves, not the banks.

It’s also time to rethink how you use your credit cards.

Yes, fewer people are using cash, and cards are convenient. But is it worth it if honest, working people are nickel-and-dimed in order to pay credit card processors?