A Waffle House waitress finally got the $1,000 tip denied to her by the restaurant after the customer wrote her a check for the amount.
The customer, who wished not to identify himself, tipped Shaina Brown, a mother of three, on a credit card on Mother's Day, and asked the 26-year-old to share $500 of the total $1,500 gratuity with a woman at a nearby table in the Raleigh, North Carolina, restaurant.
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Waffle House apologized Tuesday for the incident, but cited their company policy about large tips.
Waffle House spokesman Kelly Thrasher told The Charlotte News & Observer that the policy's intent is to shield the restaurant in the event a customer changes his mind and has the credit card company refund the money.
"This has given us cause to review our procedures so we can get tips to our associates quicker in these unusual situations,"
Waffle House posted on its Facebook page. "It says a lot about this customer that he was willing to tip our associate this generous amount. Our intentions were for the associate to get her tip all along. We are sorry that our associate and the customer have to go through this."
Waffle House's policy is likely rooted in taxes and paperwork. If Brown had been allowed to keep the $1,000, Waffle House would still have legal obligations to report the large amount.
"Under current federal tax law, employees who receive cash tips of $20 or more in a calendar month are required to
report the total amount of tips they receive to their employer," Forbes reported. "For this purpose, cash tips include not only tips received directly from customers, tips from other employees under a tip-sharing arrangement, but also tips paid out from credit cards and debit cards."
Because tips are income for the employee, Waffle House would then be obligated to calculate Social Security, Medicare, and other income taxes withholding and remit that to IRS, and is responsible for paying their portion of the FICA taxes due, according to Forbes.
While many attacked the company over the denied tip, others defended the policy.
"Waffle House's policy is very responsible and avoids potential lawsuits from the gift-givers or their families," wrote one commenter on NewsObserver.com. "Imagine if your grandfather with Alzheimer's tipped a waitress a thousand dollars or ten thousand dollars and the waitress and Waffle House refused to return it."
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