Tableside payments and tip adjust, explained.

Tableside payments and tip adjust are two ways to collect a tip on a card. With tip adjust, the server authorizes the check amount, the guest writes a tip on the receipt, and the tip is added before the batch closes; with tableside (pay at the table), the guest adds the tip on a handheld terminal before the card is ever charged.

Both work. The right one depends on your service style, your staff and how much you want the card to stay in the guest’s hand. This guide walks through what happens behind the scenes, what can go wrong, and how to choose. For the bigger picture on pricing and setup, see our page on restaurant card processing.

How tip adjust works, step by step

Tip adjust is the classic full-service flow. It has been around since paper receipts, and most restaurant POS systems still support it.

1. Authorize. The server runs the card for the check total. The issuing bank approves that amount.
2. Sign and tip. The guest writes a tip and total on the merchant copy of the receipt.
3. Adjust. The server or manager enters the tip in the POS. The transaction amount changes from the check total to the check plus tip.
4. Close the batch. At the end of the day the batch settles. The final amounts, with tips, go to the card networks for payment.

The key point: the tip is added after the bank approved a smaller amount. Card-brand rules allow this for restaurants and similar businesses, within a tolerance. If the final amount goes well beyond what was approved, the transaction can be priced at a higher interchange rate (a downgrade) or become easier for the cardholder to dispute. Rules differ by card brand and change over time, so ask your processor for the current tolerance instead of guessing.

Where tip adjust goes wrong

• Batches left open. Tips not adjusted before the batch closes stay at the pre-tip amount. The server loses the tip unless you fix it, and fixing it after settlement is harder.
• Late settlement. A batch that sits open for days can lose the best interchange rate. Settle every day.
• Typos. A $5.00 tip keyed as $50.00 is a real refund and a real awkward phone call. Many POS systems can flag tips above a percentage you set.
• Lost receipts. If the signed copy goes missing, you have little to show in a dispute.

How pay at the table works

Pay at the table puts a handheld terminal in the server’s hand. The server brings it to the guest with the check, and the guest does the rest.

1. The server opens the check on the handheld, or the handheld pulls it from the POS.
2. The guest picks a tip, either a preset percentage or a custom amount.
3. The guest taps, inserts or swipes the card. The terminal authorizes the full amount, tip included.
4. The receipt prints at the table or goes out by email.

Because the tip is part of the first authorization, there is nothing to adjust later. The amount the bank approved is the amount that settles. The card also never leaves the guest’s sight, which many diners now expect.

Tip adjust vs. pay at the table

	Tip adjust	Pay at the table
When the tip is added	After authorization	Before authorization
Card leaves the guest	Yes, to the POS station	No
Chip or tap at the table	Usually not	Yes
End-of-shift work	Enter every tip by hand	Tips already recorded
Equipment	Countertop terminal or POS	Handheld or wireless terminals
Typical fit	Fine dining, bars with tabs	Casual and full service, patios

Neither one is cheaper by design. Interchange is set by the card networks and depends mostly on the card type and how it was accepted. A chip or tap at the table is a card-present transaction, which generally costs less than a keyed one. If your servers are keying cards when a chip reader fails, that shows up on your statement as higher rates.

Bar tabs and pre-authorization

Bars often start a tab by swiping or dipping a card and holding it, or by running a pre-authorization. A pre-authorization asks the bank to approve a set amount without charging it yet. When the tab closes, the final amount (with tip) is captured. If the tab ends up much larger than the pre-authorization, the same tolerance and downgrade concerns apply. Some POS systems let you add an incremental authorization as the tab grows.

Walked tabs are a common problem. If a guest leaves without signing, you still have the pre-authorization, but disputes are harder to win without a signature or a chip read. Talk to your processor about how your POS handles open tabs at close.

How to choose the right setup

Start with how your floor actually runs. Ask these questions:

• Do guests pay at the table or at a counter? Counter service rarely needs tip adjust at all.
• How many servers close out at once? Handhelds remove the end-of-shift line at the POS.
• Do you have a patio, rooftop or event space? Wireless terminals need a strong Wi-Fi or cellular signal. Test the far corners.
• Does your POS support pay at the table natively? Some do, some need a specific terminal model.
• Who reconciles tips? Pay at the table records the tip with the sale, which cuts out a step.

Many restaurants run both: handhelds for the dining room and tip adjust at the bar. That is fine as long as every batch closes daily and someone checks for unadjusted tickets before it does. If you run several locations, see our guide on multi-location payment reporting for keeping tips and deposits straight across stores.

What about surcharges and service charges?

A credit card surcharge, an automatic gratuity and a service charge are three different things with different rules. Surcharges can’t be applied to debit cards and must be disclosed, and some states restrict them. Before adding any fee at the table, read our guide to surcharging rules and check the current rules where you operate.

What PayZoom does

PayZoom does not sell a proprietary POS. We set up processing to fit the POS you already use, and we can supply terminals, including mobile and handheld models, when you need them. We price with Interchange-Plus, and for Interchange-Plus merchants our margin above interchange never increases. That is in writing. There are no early termination fees and no non-compliance fees.

If you are not sure whether your tips are settling at the right rate, send us one recent statement. We will line-item it for free and tell you, in plain English, what you are paying. Call 866.242.4325 and a real person answers.