Why don’t tips show up on credit card charges?

(NEXSTAR) – Tipping can be a confusing practice to navigate correctly. (Is 20% the right amount for everyone? Do you tip on takeout too? And sure, you tip the bartender, but what about your tow truck driver?) To make matters more confusing, whatever amount you do end up tipping might not even show up on your credit card statement — at least not initially.

The most common place this plays out is at restaurants. You may have the bill brought to your table, put your card down, have it swiped at the register, and then finally add a tip and sign before leaving.

“When you use your credit card to pay for a meal, the restaurant will initially authorize your account with the card issuer for the cost of the meal, placing a temporary hold on your account,” said Russell Nelson, manager of credit card products at Navy Federal.

That hold, which doesn’t include the tip amount, can last a few days.

Then, after you fill in the amount you’d like to tip, the restaurant will go into their system and edit the amount you’re being charged. Grace Pilling, the Credit Cards lead at personal finance site MoneyGeek, explained that’s why you don’t see two charges – just one charge, whose amount is augmented later.

“It’s counter-intuitive since you wrote the tip amount on the receipt slip after the restaurant swiped your card, but your tip doesn’t need to be processed as a separate transaction,” she said.

“Once the bill is finalized including the tip amount, the restaurant will adjust the total to reflect the added cost and you will be officially charged, lifting the hold on your account,” Nelson said.

Just like it doesn’t show up on your credit card statement right away, tips on credit cards also don’t end up in servers’ wallets immediately.

“When you tip on a check and it’s a credit card payment, those particular servers don’t actually receive that tip until their next paycheck,” said Nancy O’Brien, CEO and founder of The Magnetic Truth, in an interview with WGN’s Daytime Chicago. “So if you have the ability to pay cash, then that is an immediate tip for those service people.”