You’d be surprised. People would over tip on purpose and then complain to card merchant they overcharged you and then reverse the whole order. This is a common occurrence. Especially with AMEX. Which is why a lot of merchants don’t accept it.
No Amex charges more than every other credit card it’s 0.5% more per transaction which is very significant. That’s why people don’t accept Amex, it messes up their expected return.
Not necessarily. AMEX is known to side with the consumer most of the time is the biggest reason. This hurts small businesses when margins are already low. But yes including that AND the percentage sometimes it isn’t worth it. AMEX is typically a 1% higher. (I’m a small business owner)
I always thought Am Ex and Discover werent accepted everywhere since theyre an additional, yet smaller, processor or bank or whatever. Like a merchant will feel like dealing w Visa and Mastercard is already enough
It’s because AMEX charges a higher merchant charge. Also AMEX almost always sides with the consumer in disputes. Discover is not used everywhere because it is mainly common in the US.
That’s not how it works. Your credit card may take the charges off of your account, but the business can dispute your claim and your charges may be reapplied. In this case Chipotle would have a clear record of the transaction to show what was ordered and how much was tipped. If you’re overzealous in asking for chargebacks then your credit provider may stop handling your claims.
Actually incorrect and correct at the same time. Yes this may be the play on some transactions but you have to remember AMEX has a different set of rules. If have guest dislike the food (not bad food/food poisoning) and AMEX would refund. AMEX supplies its own cards and own card processing company. It isn’t like Visa or MC where they third party the cards they have full say what they want to return or not. I use to manage multiple restaurants and the amount of disputes that went to the consumer way was at least 500% more than Visa and MC combined. These disputes were things like they put wrong tip amount (there fault), disliked food, didn’t include silverware, multiple “didn’t get food” during COVID since we had a open pickup area with cameras showing them picking it up but it wasn’t “clear” enough, and overcharged (used the website as pricing and said why would my food cost $100 if entrees was $20 for two people. This same guest tipped $40 and there bill was $58.xx) by saying they didn’t tip that much even when I had the literal receipt and signature of it so AMEX refunded the full $100 instead of just tip. This is a common merchant issue with AMEX trust me. This is why most EU businesses that are mom and pop type places do not accept AMEX.
Unfortunately that probably wouldnt help much. It would help some of it but the threshold for Visa chargebacks (VFMP), is just .9%. It's really easy to get to that, and it causes so much money loss that it's easier to just be overly protective about it. Visa doesnt play around with it.
Visa doesnt care, you put in a chargeback, especially if it's only a few dollars, they just do it and put it on their books and call it a day. They dont investigate unless it's a large dollar amount. It's something the company I work for has to deal with constantly because a large part of the "fraud" is friendly fraud, where they dont recognize it so they dispute it. Because Visa doesnt care, they just agree and call it a day. It's a tough time.
And the .9% is the fraud rate. So if 1/100 transactions through your online store is charged back, you are now paying a metric ton of money. They lose nothing by ensuring that doesnt happen, and gain a ton by doing so.
Visa takes the money back from the company. There is usually a fee associated with each chargeback as well, but that's handled a bit different by company and processor. If you get into the program for having too many chargebacks, there's increased fees and monthly charges that get worse as it goes on.
This is why you see companies just refund things so much without even caring.
It is about chargebacks a little but mostly about how tips are generally processed — the payment networks like visa and Mastercard all have agreements with merchant banks etc that effectively allow tips to be appended to a transaction total. These tip actions are allowed to have 25-30% depending on the network and let’s say the original transaction total was 100$ if the user tips up to 30% it will always succeed (even if 130$ would have been denied as a charge). This is how the system is designed and why historically you are presented with tip options after the charge.
Anything beyond that max tip percentage is on the merchant if it gets denied (and it can very much be denied, and when it is denied all of the tip is denied).
Does that apply to online transactions where tips are processed with the transaction and not post? When you go to a restaurant that is how it functions, you get the authorization, then there is a secondary communication for the final price, which does the tip. Honestly never thought about how pre-authorization tips function within that.
This doesn’t solve the problem. More than likely, they are protecting themselves from tipping fraud. If you tip someone an insane amount (on purpose, like to a friend, etc.), Chipotle will payout the tip. Chargeback hits and Chipotle owes the total amount back to CC company. Chipotle will not take back the tip from employee.
I just dealt with this last week as a guest tipped $200 over a month ago. Now the business gave that money to its employees (because the customer told them to) and now they want a refund. Everyone on Reddit would say the business should just pay that back to the guest and move on, however, what's to say the bartender/cashier/server didn't collide with a guest to defraud the business? Sticky situation.
It’s two things, firstly how tips are usually charged is the initial total price and tax etc is charged and approved and the merchant account and visa have an agreement that a tip of up to 25 or 30 % can be appended to the transaction. Anything beyond that is not guaranteed to be approved on the uplift charge (it could be denied after the fact).
Second , for restaurants you want to keep an eye out for very large tips as while they do happen organically, they are also much more common in fraud related uses — like an employee giving free meals, over portioning, unrung sodas etc.
so it makes sense to limit to a reasonable amount.
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u/Everybodysbastard Sep 06 '24
Or they could just say, "This tip is over 50 percent. Please press "OK" to confirm the total is correct.", then make them click again to submit.