Mod Squad Modification of Customer Tip Amount

It’s a typical bustling Tuesday morning at everyone’s favorite diner stop along the interstate. Server Julie Barnes is busy moving down the line, filling coffee for all the customers sitting along the L-shaped, 14 seat counter.

As some customers finish enjoying their scrambled eggs, blueberry muffin (toasted please), and short stack banana pancakes, Julie prepares their checks and begins to place them under coffee or juice cups for their convenience. There’s a flash of disappointment in Julie’s face when a customer lays down cash to pay for their meal and a glint of excitement when she sees another customer pull out their credit card to pay for theirs. Strange reaction? Here’s why Julie loves the credit card paying customer.

When Julie processes the credit card transaction and the customer fills in the slip with the tip amount and total, Julie closes the transaction by entering the tip amount in the POS. What no one sees and the reason Julie gets excited for credit card transactions, is the extra $2 she adds to the tip amount written in by the customer.

Sam is sitting at C4 (counter seat four) and his check for waffles with fresh strawberries, a side of bacon and a cup of coffee comes to $14.90 + $1.19 tax for a total of $16.09. Sam uses his Visa card and enters a tip of $4 on the tip line and fills in the total as $20.09. Sam leaves both the merchant and customer copy, and the detailed ticket on the counter and heads out. Julie doesn’t ring in the tip as written by Sam and instead rings in $6 for the tip instead of $4 making the new total $22.09 that will be charged to Sam’s credit card. Sam was an unwitting accomplice in Julie’s fraud when he left his customer copy of the check behind, so Julie knew it wasn’t likely that Sam would notice an extra $2 on his credit card bill for his visit to the diner. She’s right. Sam is in the practice of just looking at the locations where charges occurred on his credit card online statement doesn’t pay attention to the dollar amount of those transactions.

Julie does this modification of the tip amount for every customer who either leaves the customer copy of the slip behind or crumples it in their hand as they leave. She knows either of those actions signal the green light for adding a few extra bucks onto their check and subsequently, a few extra bucks into hers.

Over 80% of consumers use credit cards to pay for their meals in restaurants. The percentage of those customers who take their customer copy of the check is small, and even smaller are those who then reconcile their receipts to the amount charged on the credit card bill. This is a scheme that Julie can be confident won’t get discovered if she sticks to working only those customers who leave or discard their copy.

On this Tuesday during her six-hour shift, Julie served 112 guests at the counter, 89 of those guests paid with credit card and 53 of those left their slips behind or tossed them in the trash on the way out. Julie is consistent regardless of check amount and adds $2 to each of those 53 checks. That’s an additional $106 coming to her in tips in addition to the actual tips she earned that morning.

One restaurant owner who discovered this scheme decided to proactively contact those impacted customers to make them whole. Many did not know it occurred until they were contacted however others admitted they noticed it and had just decided not to come back to the restaurant. The owner’s proactive approach brought those lost customers back.

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