One of my aunts is a Denny's waitress - in her experience, if people are using a card, they don't tip. That might have been the issue....
If a restaurant ever asked me if I wanted to add an amount to my bill, I wouldn't eat there again. Where I live, the keypad is handed to the customer and then you can add your tip without telling the staff how much you're leaving them. Just a personal peeve of mine. It's kind of like telling my boyfriend what I'm going to buy him for his birthday or something LOL (yeah, I'm weird, I know... I just prefer them not to know until after the transaction is done).
Not all keypads are the same everywhere. The diner where I work takes Visa and Mastercard, and debit cards. When you use a credit card there is a line on the merchant's receipt where customers can write their tip in (or many just leave it in cash on the table).
But! If you're using a debit card you don't sign anything. After I swipe your card and punch in the amount and hit enter, then it asks if the customer would like to leave a tip on the card so I HAVE TO VERBALLY ASK THEM. I don't mind doing it, if it's for another waitress, but I do feel funny about it if it's my own customer.
The machine also asks if the customer wants cash back, but our boss won't allow us to ask them that so that is the reason we don't give them the keypad until it's time for them to enter their pin number.
That's just the way it's done where I work, and if somebody refused to come back simply because they were asked if they wanted to leave something on their card for their server, it might not really be fair because maybe they HAVE to ask, like we do.