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Is this a scam?

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bxgirl Jul 26, 2010 01:12 PM

Recently ate at a diner in a fairky large, but not major, city in New York.Everything was fine except when it came to pay the bill, we were told that the "machine is down, and we can't take credit cards."
Now, we did have enough cash to cover the bill and tip, but what if we hadn't had enough? And shouldn't we have been informed that it would be "cash only" before we were seated?
I am just wondering if this is a ploy , so the transaction is cash and can't be traced(taxed?)
Of course, it could be legitimate, that the machine was down, but what would have been the consequence if we did not have enough to pay the bill?

  1. greygarious Jul 28, 2010 06:16 PM

    After reading about it, I noticed that this does happen at some restaurants: you take the bill up to the register to pay cash, and they give you your change but don't ring in the sale. I'm guessing this can happen when the tab is paid in cash tableside as well. That's clearly a revenue reporting dodge.

    5 Replies
    1. re: greygarious
      s
      smartie Jul 28, 2010 06:39 PM

      cash sales can be removed manually at the end of the evening even on computerized systems - a manager or owner can void a sale. This is why restaurant owners must trust a manager to run the place and even then they may never know.

      1. re: greygarious
        m
        missybean Jul 31, 2010 04:57 AM

        We were having this problem at the restaurant I owned. On certain nights, we'd find there were a lot of "No Sale" entries, as they opened the cash drawer (we had a very low tech system). And, our actual cash in drawer didn't match the total included in the closing receipt.

        Yes, it was a revenue scam, but it was an employee stealing from us, not us trying to defraud the government. Needless to say, the employee was dismissed immediately.

        1. re: missybean
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          ospreycove Aug 1, 2010 05:23 PM

          It is the restaurant biz. anytime there are cash receipts there is an owner who will keep some away from Uncle Sam. Think about it Federal tax State tax in some jurisdictions city tax, your workers comp is based on revenue, (hide revenue= lower premiums) liability ins. premiums based on volume, override to landlord, etc. etc. there is a lot of pressure to hide some sales. That dollar you put in your pocket might shrink to 40 cents after all the taxes, fees and volume based premiums

          1. re: ospreycove
            m
            missybean Aug 1, 2010 06:49 PM

            Believe me, I understand that only all to well. There are the books and then there are the other books.

            In our case, our employee was not ringing up customer orders and pocketing the money. To the customer, it may have looked like a scam. To us it was stealing. None of it ended up in my pocket.

            1. re: missybean
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              ospreycove Aug 2, 2010 07:24 AM

              Reminds me of a trip through Atlanta Airport, I stopped for a frozen yogurt and noticed if people paid with cash, the exact change folks were "not rung up", and the credit card or change required transactions were. Gee, I wonder who got the exact cash sale ?????

      2. PeterL Jul 26, 2010 08:57 PM

        Depends. One place we went to had this happened twice, both times when the bill was over $100. After the second time we say no more. It was definitely tax avoidance.

        2 Replies
        1. re: PeterL
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          The 1st and only KSyrahSyrah Jul 28, 2010 12:15 PM

          There was a book, or a blog or maybe Anthony Bourdain, who said this WAS a scam. The waiter takes the $$ and says that the table didn't pay.

          If you hadn't had the money, what would they have done? They could have run this manually.

          1. re: The 1st and only KSyrahSyrah
            PeterL Jul 28, 2010 12:34 PM

            It wasn't that kind of scam, as the owner was the one who told us the credit card machine didn't work. It's probably a scam against the IRS. She probably figured we would have enough cash amongst the 20 people at the dinner.

            Like I say, we never went back after the second time it happened.

        2. h
          Harters Jul 26, 2010 02:36 PM

          "Of course, it could be legitimate, that the machine was down, but what would have been the consequence if we did not have enough to pay the bill?"

          I think you probably answer your question.

          2 Replies
          1. re: Harters
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            ospreycove Jul 26, 2010 02:45 PM

            I knew of a place in the Murray Hill area in NYC, where the "credit card machine" would break every tuesday. That could be a little suspect!!!!!!

            1. re: ospreycove
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              Harters Jul 26, 2010 03:11 PM

              But how did they deal with customers who didnt have sufficient cash to pay?

          2. greygarious Jul 26, 2010 01:45 PM

            I used Dunkin Donuts reloadable cards for convenience sake when I was a mail carrier and took my coffee break there daily. It often happened that they couldn't process cards for an hour or so because the satellite connection they required wasn't working. No scam.

            1. b
              BillyZoom Jul 26, 2010 01:43 PM

              I have been in restaurants where the automated system broke down. They were all very well prepared for that eventuality. They did it the old fashion way, first informing me that it would take a little longer if paying by credit card. I wouldn't assume a scam. I would assume lazy employees.

              5 Replies
              1. re: BillyZoom
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                smartie Jul 26, 2010 02:44 PM

                why lazy employees? the machine might have just gone down, a manager or owner is trying to reset it as quickly as possible. Credit card machines suddenly stop working maybe just as they swiped your card. Jeez give some people a break.

                1. re: smartie
                  b
                  BillyZoom Jul 27, 2010 06:53 AM

                  You misunderstood my reply. I said they were lazy because they would not take a credit card while the system was down. They wanted cash because they didn't want the bother of running the card manually. Jeez give ME a break.

                  1. re: smartie
                    Sooeygun Jul 27, 2010 07:00 AM

                    I think he is saying lazy employees, because a lot of places have the backup old fashioned way to process CCs. With the 3 part receipt and the manual imprinter. And that requires calling the number in to the CC company to get an authorization number.

                    Maybe the restaurant in question doesn't have that system, or the employees have never been instructed to use it. Or maybe they have it, know about it and are too lazy to use it. Lazy wouldn't be my first assumption though.

                    1. re: smartie
                      flourgirl Jul 29, 2010 10:13 AM

                      I'm with Billy on this. For some reason, my debit card NEVER works at the Panera that my friends and I always meet at for coffee and I often don't carry cash. (I use this card every day and never have a problem with it anywhere else.) Almost without fail, the employees there try to just hand me back the card instead of manually entering the numbers. And I recently had an employee there tell me the last time this happened not to let other employees tell me that they can't use the credit card- that if they do so, they are just being LAZY because they don't want to be bothered with entering the numbers manually and that this happens all the time. I already knew that & don't let them get away wirh it but the point is that they are indeed being lazy about it.

                      1. re: flourgirl
                        b
                        BillyZoom Jul 30, 2010 01:05 PM

                        flourgirl, exactly! No restaurant has a backup plan of "cash only" when the system goes down. They are prepared for this eventuality. The servers just don't want to do it.

                  2. Duppie Jul 26, 2010 01:27 PM

                    In a case like this and in the event that you did not have enough cash on you the establishment would have no choice but to manually inprint your card and either phone in for the authorization on the spot or simply to accept the charge and enter it in manually when the equipment does come back up.
                    Of course that will try their best to convince you to pay cash but let's just say you refused and insist you have only a charge card, what other choice do they have?
                    A scam? anything is possible but I would tend to doubt it.

                    1. b
                      bookhound Jul 26, 2010 01:25 PM

                      Credit Card terminals go down all the time. It could have gone down in the middle of your service so the restaurant couldn't tell you before you ordered. If you didn't have enough cash you could always go to an ATM nearby, the restaurant could just take your CC information and run the tab later or they could just ask you to return later to pay your tab.

                      I doubt this was a scam if it was then it was a particularly lame one.

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