My Boss Is Using Our Tip Pool To Cover Customers' Credit Card Chargebacks. He Says It's Not A Wage Deduction Because Our Hourly Pay Stays The Same.

location: California

I work at a small independent coffee shop. There are usually four or five of us on a shift, and we split the tips at the end of each week. Cash tips and credit card tips all go into the same pool.

Last week our tip payout was noticeably lower than usual. One of my coworkers asked about it and the manager showed us the spreadsheet.

There was a line that said "customer chargebacks" with $86 deducted.

Apparently two customers disputed their card transactions and the shop lost the money. Neither transaction involved a disputed tip, as far as we know. The $86 was just the total of the purchases.

When we asked why that was coming out of our tips, the manager said that when a customer doesn't pay, the loss has to come from somewhere. He also said it was completely legal because he wasn't touching our actual wages. Everyone still got their regular hourly pay.

I asked if that meant we'd be paying for customers who walked out without paying, too. He said it was basically the same thing and that this was going to be the policy from now on.

We now have the policy in writing because he sent a message to the staff group chat saying chargebacks will be deducted from the weekly tip pool before distribution.

I'm confused because I thought tips belonged to employees, even if the business has a bad week. And it's not like we can prevent someone from disputing a charge two weeks after buying their coffee.

Can the shop legally use tips from other customers to cover its credit card losses? If not, is this something we can file a wage claim over, even though our paychecks show the correct hourly wages?