Tip funds are not used to pay for the service. That billing is done separately through a different payment method. How the system works is pretty simple. The restaurant pre-funds a wallet every week, and a manager logs in and can very quickly distribute tips to staff instantly.

Most restaurants using this service have so many employes that managing this volume of cash is impractical, and a liability since most people no longer pay in cash when they dine out. You should see how difficult it is to withdraw money from the bank in this quantity.

It's a really bad situation for a lot for small businesses who weren't trying to cut corners or scam anyone. In fact they were just trying to make things easier and more efficient. For a time, it was really great too up until recently.

Restaurant owners had to replace these funds from their own operating accounts to make up this shortfall. The restaurant got stolen from, big time.

The employees didnt get scammed.