Personal Finance 

How to Avoid Tipping Scams & Ripoffs

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Restaurant ReceiptWhen I shared how I was taken by a Canadian fake DVD scammer, I asked you all what your worst scam was and the most common response was servers fraudulently putting more tip on the receipt. It’s such an easy scam because what’s an extra dollar or two on your receipt? It’s hard to discover in your credit card bill because the difference is so small. A 3 becomes an 8, a 7 becomes a 9, and all you’re probably looking for when you review your statement is whether you went to the place in question.

So here are a few simple ways to avoid getting ripped off.

Tip Clearly

When you sign the bill, always do the following:

  • Always put something on the tip line. You never want to leave it blank. If you are tipping in cash, write CASH.
  • Put a $ on front of your tip and total figures, always put cents. So five dollars becomes $5.00, not 5. This prevents the server from adding more onto the bill.
  • You can go as far as avoiding easily changed numbers, like 3 and 7, but I find that this can become cumbersome.

Follow A Pattern

A lot of people like to leave a tip that follows the 15% rule and makes the total a round number. An alternative to this strategy is to leave, as a tip, a mixture of cash and credit tip so that the tip on the receipt fits some pattern you like. For example, you could leave a tip where all the digits are the same, or the dollar digit matches the cents digits ($11.11 or $12.22). You could make up the difference with a cash tip.

Unfortunately, doing so doesn’t protect you from someone changing the dollar figure, which is arguable more damaging than changing a few cents, but it at least gives you a quick way to check your statement. It also starts getting complicated, leaving a mixture of cash and credit, for a problem that probably doesn’t happen as often as you think.

This next suggestion is really the same suggestion taken to another level.

Utilize a Checksum

A checksum is a way to verify whether or not a string of numbers, or data, has been corrupted. The Luhn Algorithm on credit card numbers is an example of a checksum. We can use this same idea to create a very simple checksum for your tipping. All you need to do is tip in a way that gives a total that matches your checksum. You create the checksum rule however you want, but just make it easy to verify when you review your bill.

A simple checksum would be to add up all the digits before the cents, divide by ten and put the remainder in the cents spot. If your bill was $23.09, a 15% tip would be $3.46. To make it match your checksum, you would instead leave a tip of $3.44 so that the total is $26.53. Two plus six plus five is thirteen, the remainder after dividing by 10 is 3, which matches the 3 in the cents spot.

Use whatever checksum makes you most comfortable. You can take the first digit, subtract the second digit, and compare that to the penny spot. Don’t make it too complicated, you want to be able to do it quickly when scanning your statement.

What If You Get Scammed

What if you use one of these ideas and you discover a scam? Call your credit card issuer and dispute the charge. Some credit card companies now list, on the statement, a breakdown of the restaurant’s charges. You will know how much the bill is plus how much the tip is. If you notice you gave the restaurant a nice 50% tip (but don’t remember doing so), a phone call is in order.

If all this is too much hassle, you can always pay in cash. 🙂

(Photo: spine)

{ 56 comments, please add your thoughts now! }

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56 Responses to “How to Avoid Tipping Scams & Ripoffs”

  1. Ron says:

    Many restaurants today are equipping their servers with wireless credit card machines and can accept your card at the table. YOU enter the tip yourself and you print your own receipt. When I asked the server about it, she said it was to cut down on server fraud.

    Of course, I’m sure some enterprising scammer will concoct some way of abusing this system too.

    • Josh says:

      As you’re right, someone will undoubtedly come up with some way to abuse this, I really like the idea. It makes the ability to write something different in the tip line nonexistent. I need to start using the “CASH” remark in the tip line though, I had been leaving it blank in the past, and lucky so far, but I shouldn’t continue to tempt fate.

    • Jim says:

      Unfortunately, there will always be ways to scam the system. However, as you make it harder and harder, the “casual/opportunistic” scammer will have fewer opportunities.

      • jsbrendog says:

        yup. there will always be someone out there trying ot make a quick buck. hopefully as technology advances the opportunities and those willing to risk it will shrink and shrink…..until someone comes up with a new way to scam the “unscammable system” and makes it easy again and everyone and their mother hops on it

  2. otipoby says:

    Wow, 6 martinis (the picture at the top of the story). That is the original tip scam – get the buyer’s wallet lubricated the old fashioned way.

  3. Am I the only person that saves receipts and compares them to the credit card bill at the end of the month? Not that these other methods don’t work just fine, but why mess with a checksum when I can just check the amount at the end of the month?

    • Jim says:

      I know I don’t, the checksum gives me a quick way to scan and see if anything looks out of place.

    • echidnina says:

      I’m awful at saving receipts, all those little slips of paper get too messy. I only ever keep them when I think I might need it for a return or the like.

    • Shirley says:

      Within a few days of the transaction I enter the receipt place and total (and any notes I might need to recognize it) on my spreadsheet for that CC. Then the receipt goes in a small basket near my computer.

      Once a week I check my CC listing online to make sure my transactions match. After I make the monthly payment in full, the receipts are shredded. It’s simple, errors are caught within a few days, and it takes far less time than it may sound.

    • jsbrendog says:

      yes. i know i don’t. way too much.

    • billsnider says:

      I don’t check them because I hardly eat out.

      Bill Snider

  4. Utilizing a checksum seems pretty crazy. I like Kosmo’s idea of just saving your receipts and comparing at the end of the month. The only problem I find with this strategy is to make sure to keep and organize each of my receipts.

    • Jim says:

      That’s why the checksum works better, you don’t need to save receipts. Saving receipts is the best way, without a doubt, but for people who don’t, a checksum is the next best thing.

      • I just throw them in an envelope. At the end of the billing cycle, I start a new envelope.

        It takes maybe 10-15 minutes to verify when the bill comes. Additionally, it helps find any completely bogus charges.

        • NateUVM says:

          I take it one step further. I save all my receipts, but then I don’t wait until the end of the month. I check my cc account online for when the charge posts. Once it posts in the correct amount, I can lose the receipt. In this way, if anything is fishy, I can get to the bottom of it pretty quickly. I’ve even called some restaurants and they’ve remembered when I came in, etc…and have fixed it on the spot. (These issue have only happened once or twice, total…this doesn’t happen to me often, or anything.)

          While it means being a little bit more active with my recepts, I also don’t have a pile of them to 1) keep through the month, or 2) sort through and validate at the end of the billing cycle.

          To each their own…

          • ziglet19 says:

            I do this too. It only takes a day or two to post to my credit card, so I just log in a few times a week and make sure everything looks as it should while I still remember how much I spent or still have the receipt.

  5. echidnina says:

    Thanks for this article! I remember this problem coming up in the comments for the previous post, and it was eye-opening for me. Now this post is here and there are even more good tips 🙂 (err, pun not intended)

  6. zapeta says:

    I keep my receipts and compare them to the charges on my statements. In some cases I don’t have the receipts but I have entered them in my budget software so I can check that instead.

    • Ryan says:

      I agree that entering them in your budget and then comparing that to your bank statement is fast, I use an excel spreadsheet with manual entries. One of my friends has his budget online and can enter it with his iphone before leaving the resteraunt or gas station or supermarket.
      I usually just tip 15-20% and round up or down to the nearest whole dollar. I also don’t check that carefully at the end of the month unless we blow our eating out budget then I have to check every penny against bank statements to find out why. Haven’t noticed an over charge but it is suspect.

  7. cubiclegeoff says:

    I’m too lazy to keep receipts, and I’ve thought of a checksum method but I like my cents to be 51 or more to make sure it rounds up for points earned.

  8. reducereuserecycle says:

    I didn’t understand the checksum thing at all. I even watched the video and understood that even less.

    • billsnider says:

      Most business people use a check sum. It can be your credit card, a part number, an account number or something else that you need to enter numbers.

      The concept is fairly easy. Try writing it out a few times. Once it clicks, you will wonder how you ever did without it.

      Bill Snider

  9. Lulu says:

    That checksum seems really complicated but if it works for you then fine. I do 10% and round up to the nearest dollar. I also save my receipts like some of the other commentors here and have an envelope for every month. I enter all receipts in a spreadsheet on a daily basis and put the receipt in the envelope. Then Mint lets me know when a charge posts so I can quickly compare the receipts if needed.I was scammed once where the waitress turned a 1 into a 7 but that messed up the dollar amount. The restaurant was just down the street so I went in and showed the manager my copy. I also never write in blue or black since that is the colors they commonly yes. So when I flashed my receipt with purple glittery ink there was no question.

    • daenyll says:

      I like the idea of fancy ink to prevent number fudging

      • echidnina says:

        It’s good if you can remember to always carry around a fancy pen – but most of the time I just use the pen that they give me.

        • Not enough says:

          10% tip?! You do realize servers make way less than minimum wage right? like $2/hour? 15-20% is an appropriate range.

          • CK says:

            If I spend $200 on a 2hr meal that get $20. Doesn’t seem like a raw deal to me.

          • Not enough says:

            I guess I should have also said: you do realize that a waiter doesn’t get the full amount of your tip either, right? He must pay out all the bartenders, busboys and cooks. He doesn’t get the full $20, probably only half that. So it is a raw deal. I’m assuming you live in the U.S., so your $20 on a $200 bill is considered way below standard and the waiter probably took offense. Just google standard tipping in U.S. It’s customary to leave 15-20%.

          • ziglet19 says:

            Servers do not make below minimum wage in every state.

  10. Shirley says:

    CASH written in big bold letters (very hard to change)in ink on that tip line seems the best and simplest preventative to me. Once burned, twice shy.

    • ziglet19 says:

      This is a great tip that Jim had, and one I plan to start using. I usually just draw a line through it, but I like “CASH” better.

  11. Ted says:

    I just wish we could trust people more. I feel like we spend so much time looking out for scams that we don’t trust anyone increasing the amount of people that will want to scam us because we act like jerks.

    If a waitress gets an extra buck or two out of you… so what?

    Its the scams that take more I am worried about.

    • Shirley says:

      I also would like to see a reversal to when the Golden Rule was so much more widespread. Things were so much easier with that attitude. But that simply isn’t going to happen. Accepting that, taking care of the nickels keeps the dollars safe.

    • billsnider says:

      It is the principle of the thing.

      Bill Snider

    • ziglet19 says:

      I work hard for my money, and for someone to take an extra buck or two from me when it’s not what I intended just makes me mad, especially when it is done dishonestly.

      • daenyll says:

        my family is notoriously generous tipping for good service, but will make it apparent when we feel the service was poor with lack of tip and comments. I’ve watched my father literally confront management and have several employee’s walked out and terminated on the spot when he caught something like this scam before.

  12. Stephen says:

    I have only one credit card and it’s with Wells Fargo Bank. I check my account online a couple times a week to see if everything is in order while my memory of the transaction is still fresh.

  13. freeby50 says:

    The checksum idea is awesome. (not too practical but I live the concept) Do you also apply kaurnaugh maps to March Madness brackets? 🙂

    I used to tip so that the bill + tip was a whole number. So if the bill was $9.90 then I’d tip $2.10 making the total $12.00. But that took a seconds thought to do the math and had little real value. Now I just tip in whole numbers rounded to the dollar so if the bill is $9.90 I’ll just tip $2.00.

  14. Marilyn says:

    Checksum sounds complicated. I keep a file folder in the front of my file cabinet. At the end of the day, I remove receipts from my wallet and put them there. When I pay my bills at the end of the month, I compare the receipts to the statement, finding any discrepancy (knock on wood, safe so far). I then staple the receipts to the statement and file it so if I need to return something later, I can or if anything really weird happens, like say being charged again next month for a purchase this month, I have all of my records. My partner goes one better: he checks his accounts online daily, maintains a record with Quicken, and saves receipts to staple to his statements.

    • cubiclegeoff says:

      I never thought about keeping receipts with my cc statements (since I keep everything online), but this seems like a good idea if you may need to return something or deal with a warranty.

  15. jsbrendog says:

    I always make sure to draw the numbers as close together and put a long think dash from the beginning of the first number all the way to the left edge of the receipt. TAKE THAT!

  16. Rosa Rugosa says:

    We always pay cash at restaurants now, not to prevent scams, but to protect the budget.
    When we did use credit cards though, we never got scammed. We always tipped generously in cash, drew a line through the tip section of the receipt, and wrote the total on the total line.

  17. eric says:

    It’s hassle-ish to others but I just keep my receipts until I can verify it with my statement online. I just do it all at once at the end of the month.

  18. darctones says:

    Most restaurant’s credit card systems charge the bill + tax + 20% for tip. At the end of the week the receipts are batch processed and the actual tips are charged to the accounts.

  19. BIGSeth says:

    Why not just save your receipts for the last week and check them against your credit card online or mint or something? Also, you don’t have to wait until the end of the month to pay off a credit card.

  20. Olivia says:

    We’re terribly old fashioned. We save up for our eating out in cash, in an envelope, and just bring it with us. Totally hassle free.

  21. Onano says:

    I also write out the total on the receipt (like you do on a check). I’ve had a $7 dollar meal become a $77 dollar meal. Got it fixed, but missing that 70 hurt for a few days.

  22. Mike says:

    Another thing you could do is after you write the digits in the gratuity/tip line, write it out in words next to it, like on a check. For example, if the tip is “$23.80”, write “twenty three and eighty hundredths dollars” next to it, or “twenty three dollars and eighty cents”.

  23. Len Penzo says:

    LOL The checksum suggestion really made my day, Jim! I never thought of applying checksums to tips. But I think I’ll just stick with rounding the tip so the final total comes to the same secret number each time. I used to round it to match the day I made the purchase, so if it was May 25th I rounded the tip so the final total ended in .25. Even that was too much work though, so now I use the same “secret” number every time.

    All the best,

    Len Penzo dot Com

  24. CC says:

    Recently the 3 of us at the office went to a well known place to eat with a 50 dollar gift card certificate. The server said a 10 dollar hold would be returned to the card to be used again when we paid the overage and tip in cash… SCAMED big time as she got both cash,tip and the xtra 10!! Live and Learn…

  25. Joe says:

    My wife writes out on the recipt,in long hand, the amount of the total with tip.

    This way there is no way they can say I gave so and so when it’s written out clearly how much it is.

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