Where do tips actually go? We went looking.

Tip screens are everywhere now: airports, stadiums, self-checkout kiosks, drive-thrus, cookie counters. In a 2023 Pew Research survey, 72% of Americans said tipping is expected in more places than five years ago. A self-checkout machine at Newark airport asked a traveler to tip on a $6 bottle of water he pulled from the fridge himself.

So we spent a while pulling the public record on where that money goes. The short version: it depends on the business, it is almost never disclosed, and when someone with authority finally checks, the answers range from “straight to staff” to multi-million-dollar settlements.

The one fact that explains everything else

When you tap a tip onto a card reader, the money does not go to a person. It goes into the business's merchant account, together with the sale. Square, Toast, and Clover all settle tips to the merchant; Square's own terms tell businesses its tools “may not include all features and functionality necessary to comply with” tip-distribution law. Distribution is entirely the employer's job.

And the law is unusually clear about whose money it is: under federal law, tips are the property of the employee. Employers, managers, and supervisors may not keep any portion, ever. So the machine hands your tip to the business, and the law says it belongs to the worker. Everything below lives in the gap between those two sentences.

When the money never reached a worker

These are not rumors. Each links to the regulator or court that said it.

• The travel app Hopper put a pre-selected “Tip” in its checkout that went to Hopper itself, not to any worker. The FTC called it deceptive; Hopper is paying $35 million (July 2026).
• From 2017 to 2019, DoorDash used customer tips to fill a guaranteed payout instead of adding them on top, while checkout said Dashers always receive 100% of the tip. It settled with Washington, DC ($2.5M, 2020), Illinois ($11.25M, 2024), and New York ($16.75M, 2025).
• The Department of Labor found four Washington-state Subway franchise operators kept roughly $80,000 in credit-card tips from about 100 workers (2024). Bay Area operators of 14 Subway stores were ordered to pay about $950,000 and sell or close their stores; the findings included illegally keeping customer tips (2023).
• It happens at ordinary restaurants too: the DOL recovered $81,681 in card tips kept by the owners of one Louisiana buffet (2025), and a Pennsylvania restaurant owner was ordered to pay $1.3 million including withheld tips (2024).

Keep in mind what these cases have in common: someone checked. Enforcement is case by case, and most tips are never audited by anyone.

Same brand, different store, opposite answers

Ask workers how tips work at a chain and you do not get one answer. What follows are unverified accounts from public forums, linked so you can read them yourself. They are things people say, not findings.

• On one Indeed thread about Subway, a store manager states managers and owners may never take tips, a worker at another franchise states managers took tips after closing, and an assistant manager describes even splits that include managers. Same brand, three stores, three different worlds. A viral TikTok claimed Subway digital tips “go straight to corporate”; other workers replied describing same-day cash splits and card tips on paychecks. Nobody could point to a policy, because Subway corporate has never published one.
• Great Clips stylists consistently say they keep their own tips, but several (2025) describe card tips loaded onto a prepaid debit card at closing or held until payday, while cash tips are same-day.
• Olive Garden and Cheesecake Factory servers describe tip-outs computed as a percentage of total sales rather than of tips received: roughly 2 to 2.25% of gross sales to support staff, owed even on tables that leave nothing. Posters comparing stores report different rates for the same roles at different locations.
• Several 2025-26 Crumbl Cookies employee reviews describe a fixed “tips” amount blended into a flat wage, with larger customer tips not reaching the worker who earned them.

Mostly, nobody says anything at all

The most common finding was not a scandal. It was silence. Of ten national brands we researched, most publish no statement anywhere about who receives tips or how they are divided: no policy page, no FAQ line, nothing. What is publicly known about Starbucks's pooling formula, for example, comes from court records, not from Starbucks.

Meanwhile, the design of the prompt quietly moves the money. When DoorDash and Uber Eats moved the tip prompt from checkout to after delivery in New York City, the average tip fell from $3.66 to $0.93 within a week; the city counted $554 million in worker losses over 18 months (2026).

Why we keep the record

Two things can be true at once. Customers deserve to know whether the number on the screen reaches a person. And workers deserve their tips; on that point the law already agrees. Neither is possible while the answers live scattered across settlement PDFs and forum threads.

TipRecord keeps the record in one place: what companies state, what regulators found, and what workers and customers report, each labeled for exactly what it is and never more. The record grows one report at a time. It takes about 90 seconds, it is anonymous, and there is no account.

Forum accounts linked above are unverified and included as things people say, not as findings. Legal matters link to the issuing regulator or court. Laws vary by state, and this is not legal advice.