By Holly Burns
Staff Writer

Chances are you know someone who has done it. Perhaps you’ve even done it yourself.

With two out of five adults working in the restaurant industry at some point in their life, according to the National Restaurant Association, waiting tables is one of the most popular jobs in the country—particularly among young people, for whom the instant gratification of receiving tips in cash every night is a huge draw.

But with debit and credit card use in restaurants skyrocketing—only around 15% of customers pay for their meal with cash, according to a recent article in the Cincinnati Business Courier—many restaurants are finding themselves without the necessary funds to “tip out” their servers at the end of the night.

“It’s easier for most people to put the tip on their card,” says Craig Davis, a manager at Vickery’s on Shem Creek. “The customer doesn’t feel the loss immediately.”

Many restaurants have started making frequent trips to the bank, particularly before the nights they know will be busy, in order to have enough cash on hand to reimburse the staff.

“Last week I had to go to the bank three times just to have enough money in the register to give the servers their tips,” says Kathy Zimmerman, general manager of Cypress Grill.

Most customers don’t think twice about leaving a tip on their credit or debit card, agrees Adam Nemirow, manager of FIG. The only exceptions, he says, are “people who have worked as servers themselves. They know how it is, so they’ll either pay the entire bill in cash, or leave a cash tip on a credit card sale.”

Nemirow says that FIG has, once or twice, not had enough cash in the register to give out to servers, and has asked them to wait until Monday to receive their tips.

“They usually don’t mind too much,” he says. “The luxury of getting paid every night means they’re willing to wait for their money on occasion.”

But in a bid to find a way to deal with increased credit card use while still keeping servers happy, other local restaurants have gone a step farther.

“Any cash sales servers have that don’t exceed the total charged tips, they get to keep at the end of the night,” says Chris Zinaich, a manager at Anson. “Then they’re reimbursed the remainder of their tips twice a week. For example, if a server makes $65 in cash sales one night, and has $120 worth of charged tips, he’ll take that $65 in cash home at the end of the night, and receive the remainder of the charged tips—the $55—a few days later.”

The system seems to work, says Zinaich. “It gives the servers a chance to make some cash every night, but it keeps us from having to run out to the bank all the time.”

Union Hall restaurant allows servers to keep cash tips at the end of the night, but writes them a weekly check separate from their paycheck for their charged tips. However, some employees don’t appreciate the deviation from the norm.

“To tell the truth, I don’t care for the system,” says Delia Smith, head server at Union Hall. “Every other place I’ve worked, I’ve been paid every night. Most people who wait tables do it because they want the cash right then and there.”

While all servers in the restaurant industry are urged to declare 100% of their tips, many admit that they don’t, which may spell tax trouble down the line.

In January, Maverick Southern Kitchens decided to stop nightly reimbursement of the employees in its restaurants, and, while still allowing them to take home cash tips, now adds charged gratuities to the employees’ bi-weekly paychecks, taxing them on every dime they make.

“Many of our servers were applying for loans and were being turned down because of insufficient income,” says Dick Elliott, owner of Maverick Southern Kitchens. “Because a W2 form doesn’t record their tips, we weren’t able to confirm to the bank how much they were, in fact, making. This way, their W2 reports significantly greater earnings.”

In addition, says Elliot, “We were responding to the recent spate of attacks on servers. F&B employees leave work late at night with a lot of cash in their pockets, which seems like a huge safety issue to us.”

Though it took a certain amount of adjustment, the new system seems to be working, says Seanessy Boyer, a server at High Cotton. “The only bonus to the old way was walking out every night with cash,” he says. “Now, I leave work with cash in my pocket maybe one night in 10. But it’s a lot easier to save up and budget for things.”

Elliott predicts that, within a year, most restaurants will be adding their employees’ charged tips to their paychecks, rather than paying them outright in cash.

But with instant gratification the name of the game for many young waiters and waitresses, will such a move spell disaster for the restaurant industry?

“There’s a chance that the profession might become less popular,” concedes Suzanne Weber, a bartender at High Cotton. “Having that cash in your hand at the end of the night is the most attractive thing about the job, especially for college students. But at the same time, most jobs pay bi-weekly anyway. Overall, I think it’s certainly the way forward.”

Holly Burns covers retail and restaurants for the Business Journal. E-mail her at hburns@crbj.com.

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