Obtaining an Authorization when a Tip is Added

The following information and requirements are relevant to the merchant's obtaining of an authorization when a tip is added, either before or after the authorization process.

• If the transaction amount is below the merchant's floor limit, and the cardholder adds a tip in an amount less than or equal to 20% of the transaction amount, the merchant is not required to obtain an authorization even though the total transaction amount may exceed the merchant's floor limit.
• If a merchant obtained an authorization for a transaction, and the cardholder adds a tip in an amount greater than 20% of the transaction amount, the merchant must obtain an authorization for the additional amount. The card issuer is responsible for the full amount of the transaction.
• If the cardholder adds a tip in an amount greater than 20% of the transaction amount and causes the transaction amount to exceed the merchant's floor limit, the merchant must obtain an authorization for the total amount of the transaction.