Waffle House makes waitress return $1,000 tip

The company doesn't allow large gratuities by credit card, in case the tipper wants a refund later. The server later received the tip in the form of a private check.

By MSN Money Partner Jun 10, 2014 12:38PM
File photo of a Waffle House breakfast diner near Dawsonville, Ga. on July 28, 2005 (© Ric Feld/AP Photo)Updated 3:10 p.m. ET

By Ashley Lutz, Business Insider

A Waffle House waitress who received a $1,000 tip says she was forced to give the money back to her customer. 

Shaina Brown has worked the late shift at a Waffle House in Raleigh, N.C., for seven years. 

She told Josh Shaffer at The Raleigh News-Observer that she was working at 3 a.m. on Mother's Day when a customer said, "I'm going to bless you tonight." 

The customer added a $1,500 tip to the credit card receipt, instructing Brown to take $1,000 and give $500 to a woman at a nearby table. 

Shaffer confirmed the tip with the customer, a local businessman. 

But Brown, a mother of two, didn't get to keep the tip. 

A Waffle House spokeswoman told the newspaper that it's procedure to refund large tips to customers. 

"Generous tippers are asked to tip again by cash or check," Shaffer writes. "The restaurant handles it that way, she explained, in case the customer decides to dispute the tip later or ask for a refund."

The businessman returned later and wrote Brown a check for $1,000, CBS Charlotte reports

But Shaffer writes that he disagrees with Waffle House's policy. 

"You don’t put up roadblocks to charity. You don’t make it hard for people to be nice, or they’ll give up trying," he writes. "And more than anything, you don’t dump on your own people as a matter of policy."

Since Shaffer reported on the incident, many customers have taken to Waffle House's Facebook page to express their opinions. 

While most customers side with the server, others see the logic behind Waffle House's policy. 

"People who leave thousand dollar tips or otherwise give large amounts of money to strangers are often suffering from a neuropsychiatric condition (manic episode, major depression, dementia) or under the influence of alcohol or other drugs," one customer writes. "Waffle House's policy is very responsible and avoids potential lawsuits from the gift-givers or their families."

More from Business Insider
Jun 10, 2014 1:18PM

An update on the story:

After the story was reported on the local news, she received a call last week from her customer, who wants to remain anonymous. She says he had heard about her problems and wrote her a check directly.


Jun 10, 2014 1:33PM
How lame is it to say big tippers have mental problems!
Jun 10, 2014 1:27PM
For those who do not understand how credit card tips work - The tip money is paid to the employee by Waffle House, then Waffle House is paid by the credit card company. If the 'tipper' disputes the charges for what ever reason, Waffle House has to refund the tip back to the credit card company. If the waitress had been paid the tip, they would have to repay the money back to Waffle House. 'Generous tippers are asked to tip again by cash or check', that way if the tip is disputed it is between the waitress and the tipper.
Jun 10, 2014 1:46PM
Enough with the mock-outrage. It's tiring. This is a perfectly reasonable policy. It prevents fraud, giant errors, and keeps the company from having to pay huge transaction fees on money that's not meant for their pocket. If you're generous enough to give a tip that large, then you should also be sensible enough to understand why the company did this and be willing to find a way to make it work. This is a non-story and there shouldn't be any problem here for anyone...
Jun 10, 2014 1:23PM

Tips in large amounts should be either cash or check directly to server. If placed on credit card company has to pay a certain percentage to the credit card processing companies, then as tips company I believes pays payroll taxes on that as well. Also on credit card, customer can have a change of heart when they get the bill and process a chargeback, by that time, server already spent the money, or might not be working there any longer.

That is probably why they returned the tip., charitable giver should give a check or cash.

Jun 10, 2014 2:05PM
7 years working a waffle house is more impressive than the tip. not only dose she deserve the tip but the company should consider promoting her plus a bonus. to work there that long and give such good service that someone would leave such a large tip is a real testament to her worth as an employee!!!!!!!!   
Jun 10, 2014 1:28PM

Waffle House is right to do this.  One of the biggest credit card frauds is from dishonest waitstaff and bartenders who "uptip" customer reciepts. It's very easy to do since the tips are usually put in after the customer has left and the end of the wait persons shift.  Most always it's a small amount maybe a couple percent or so. And most cardholders will hardly ever notice.

And the cardholder actually has up to 180 days to dispute the transaction.

Jun 10, 2014 1:15PM
For big Tips they could just hold the tip.........till it clears after a few days and its to late to ask for a return.

Jun 10, 2014 1:18PM
This is why it's never a good idea to pay with a credit card when you are drunk.
Jun 10, 2014 1:43PM
I ate there one time.  I like their waffles.
Jun 10, 2014 1:28PM
Who are we to second guess a business conduct policy probably enacted after a Waffle House somewhere got burned by a customer with second thoughts, regrets, etc.  I do not know if these are franchises or are company owned businesses. Does anyone know.  I doubt a franchisee can do this on his or her own, so I assume it came down from on high at WH. 
Jun 10, 2014 1:41PM

on any tip or purchase you can dispute it up too 30 after it appears on your bill

the restaurant has a hold put on the amount until they send in the proof that it is legit.

It can take months to go thru and get settled either way.

The credit card company gets their fee no matter what and then another for the disputed item

so they love it they get it both ways

Jun 10, 2014 1:49PM

can someone please tell me how the following is logical?  sounds like it was written by somebody that doesn't have a clue and I would love to see the factual information behind this statement:

"People who leave thousand dollar tips or otherwise give large amounts of money to strangers are often suffering from a neuropsychiatric condition (manic episode, major depression, dementia) or under the influence of alcohol or other drugs," one customer writes. "Waffle House's policy is very responsible and avoids potential lawsuits from the gift-givers or their families."

Jun 10, 2014 1:55PM
Seems to be a lot of these customers of late giving away large amounts of cash to servers. Or maybe it's just becoming more known due to the internet.

Not sure why Waffle House would think they need to "police" the desires of their customers when it comes to tips. But if the guy follows through and gives the waitress a check, then I guess all will end as he planned.

Jun 10, 2014 2:10PM

As someone who has worked in the restaurant biz for years the other reason the restaurant has that policy is the credit card fees they get charged on transactions which includes tips.  Many establishments have moved towards passing a portion of the fees to employee that represent fees driven by tips.


Either way - Waffle House is overstepping boundaries if they are forcing someone to take their tip back...shady shady shady.

Jun 10, 2014 2:48PM
Nice gesture on the customer's part.  But not understanding the businesses' legal and liability issues is a bit ignorant.  It makes perfect sense from a business standpoint, that you can't allow someone to add an excessive amount to a charge card, then have the waitress remove that large amount of cash from the cash drawer, to divvy it out to herself and to "another customer."  Many credit card schemes are transacted this way.  If it was truly supposed to be a charitable gesture, he should have no problem giving her a tip in another way.
Jun 10, 2014 1:48PM
unless waffle house is going to give her and the other woman the money then they should either change their policy or mind their own business.
Jun 10, 2014 2:44PM
Have to go with Waffle House on this one. You reallly can't expect them to float the tip - plus the ccard fee-- in the event of a customer mind change. Tip in Cash.
Jun 10, 2014 2:03PM
The Waffle House isn't a bank. Their policy makes sense.
Jun 10, 2014 2:52PM
I bet the fact that they have to pay a % of the credit card transaction factors in...
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