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How to avoid tipping scams

When waiters pad the tip, it's often easy to miss when you review your credit card bill.

By Karen Datko May 11, 2010 8:38AM

This post comes from Jim Wang at partner blog Bargaineering.


When I shared how I was taken by a fake-DVD scammer, I asked you what your worst scam was. 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 on 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 "$" in front of your tip and use total figures -- always put cents. So five dollars becomes $5.00, not $5. This prevents the server from adding more to 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 a 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 except for the final one, then divide by 10. The final digit in the result should be the same as the final digit in your total bill. Let’s say your bill is $23.09. A 15% tip would be $3.46. To make your checksum work, you would instead leave a tip of $3.44 so that the total is $26.53. Two plus six plus five is 13. You divide that by 10, which equals 1.3. The 3 matches the 3 in the $26.53.


Use whatever checksum makes you most comfortable. You can take the first digit, subtract the second digit, and match the penny spot to that number. Don’t make it too complicated. You’ll 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.


More from Bargaineering and MSN Money:

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