Do You Earn Rewards on Tips?
Tips ride on the merchant’s category
When you write in a tip on a restaurant check or add one on a card terminal, the tip is part of the same transaction as the bill, so it carries that merchant’s category code. A 20 percent tip at a restaurant earns your dining bonus right along with the meal, and a tip at a salon earns the base rate the salon does. There is no separate tip category.
Cash tips versus card tips
A tip left in cash is not a card transaction, so it earns no rewards. If earning matters, add the tip to the card instead of leaving cash, and you capture the same rate as the purchase. This is the same logic behind why the card you use matters, covered in does it matter which card you use.
The bigger picture
Because tips follow the purchase, the way to earn the most on them is simply to use the best card for that category, then add the tip to the card. On dining especially, where tips are large and the bonus is high, adding the tip to a strong dining card quietly boosts your return. Value points at a flat 1 cent.
Frequently asked questions
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