Most people who work the service industry don’t claim cash tips, but credit tips are required to be claimed due to the whole being electronic and traceable thing.
If, as a service person, most or all tips are in cash, you just claim whatever brings you to minimum wage for that pay period.
This is obviously heavily dependent upon where you work - some places want you to claim all tips (but you still don’t claim cash usually) others, especially if you make above min wage like most bartenders, don’t care.
However, if you don’t claim those tips you can’t use that as income when taking out loans and applying for housing and whatever else. So it’s fucks people over pretty regularly.
Your experience/statistic there is very different from my experience. It definitely depends where you are and how high-end the place is.
Place I work now, most tips are cash, by a substantial margin. Even when paying with card about half of our customers tip cash, and most transactions at this place are cash anyway. Places I worked previously were like a 50/50 split if people paid more often with cash or card, and again about a quarter of people paying card still tip cash.
Maybe because this is a low cost of living area, and everyone knows moving claims cash tips, maybe because it’s all small town stuff, idk.