The debate around mandatory service charges on restaurant bills has come back under the spotlight after the Central Consumer Protection Authority reiterated that levying them as a default practice constitutes an unfair trade practice, punishable with fines of up to ₹50,000. While the directive aims to protect consumer choice and fair trade, it has also reignited concerns within the hospitality industry about staff welfare and wage stability. As the debate over service charges intensifies, CE speaks with Bengalureans on both sides of the table.
Charge should be clearly explained — Sam Varghese, Senior social media executive
In case of mandatory service charges, it no longer feels like appreciation and becomes just another transaction. Good service should be recognised but never taken for granted. From what I have seen in the industry, service charges do not always guarantee stable wages for staff. It is unclear how money is shared and diners usually do not know how much goes to employees. If the aim is fair pay, it should be included in menu prices. Being open about charges can change how people feel. When a service charge is clearly explained and optional, it helps build trust and avoids hard feelings. It is key to protect consumer choice and make sure hospitality workers are treated fairly. Respect and fairness should go both ways.
Should be mandatory for private dining — Simon Koso, Barista
In places I’ve worked at, service charges are not mandatory. They can be removed at the guest’s request. As a barista, what I want is clarity and fairness. Many customers don’t understand the difference between the service charge and tips; sometimes, they even ask to remove GST. Ideally, service charge should be transparently distributed among all staffers, while tips can remain personal or pooled depending on the restaurant’s policy. When restaurants pass on 100 per cent of the service charge to employees, it genuinely supports the team. But in some places, part of it goes towards covering breakage and wastage, which reduces its benefit to staff. Service charges are disclosed on the bill, so they aren’t hidden. I feel they could be mandatory for private dining and bar settings, while remaining optional in regular dining, which would balance staff support and customer choice.
Balance rights with industry demands — Jitendra Kumar, Operations head
The debate around service charge and voluntary tipping comes down to balancing customer rights with the nature of a service-led industry. Frontline staff play a key role in dining experiences, and tips or service charges are a way for guests to acknowledge good service. For service staff, this is a meaningful addition to income. At the same time, diners expect transparency. In Bengaluru, many are still happy to reward good service, but it should always remain a choice. Ultimately, the industry’s priority is to ensure fairness for both guests and staff.
Should be strictly voluntary — Sanatha BK, Restaurant founder
I strongly believe service charges should be voluntary. It has to come from the customer as a genuine appreciation of the service. The general industry thumb rule is the 30-30-30 model covering COGS (cost of goods sold), salaries, rentals, operational costs and marketing, with about 10 per cent as profit margin. If service charges are clearly mentioned and optional, that is a better approach and some customers will be more generous. In a city like Bengaluru, we are planning to reserve 5 per cent of our turnover as an incentive pool to be distributed among the entire team to ensure fair compensation.
Service charge makes sense — Sasmit Mudliar, Student
Sometimes it does make sense for a service charge to be added, especially in situations where the effort involved is clearly high. Eg. when there are large groups and the team goes out of its way to manage customers. In those cases, I don’t think customers mind paying. When staff politely mention that tips are appreciated, it naturally makes people more willing to tip or not waive the charge. That said, employees should be adequately paid without depending on charges.
Include salaries in menu pricing — Sandhya Narayan, Research assistant
The whole point of dining out is the service and ambience, and we already know that costs like AC and overall experience are built into the menu prices. So having a separate service charge doesn’t always make sense. I feel more satisfied when I tip directly and see the person who served me benefit from it. That gives me more control over whether the quality of service deserved that extra amount. From a consumer psychology perspective, it would be better if restaurants built staff salaries into menu pricing instead of adding a separate charge at the end. Diners should know upfront what they are paying. Mandatory service charges take away consumer choice. The ideal middle ground is a grey area; keep service charge clearly printed and optional, encourage tipping, but don’t force it.