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How to Avoid Tipping Scams & Ripoffs
Posted By Jim On 04/29/2010 @ 7:33 am In Personal Finance | 56 Comments
When 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.
When you sign the bill, always do the following:
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.
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 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 )
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 taken by a Canadian fake DVD scammer: http://www.bargaineering.com/articles/have-you-ever-been-scammed.html
 Luhn Algorithm on credit card numbers: http://www.bargaineering.com/articles/luhn-algorithm-video.html
 spine: http://www.flickr.com/photos/spine/218317068/sizes/m/
Thank you for reading!