For many years, restaurants and hotels have been adding a service charge to our bills. People pay the bill without understanding what it means. Even as the government has made this clear that service charge is not mandatory, but, the practice still continues.hotel service charges=
The Department of Consumer Affairs had issued an advisory a few months back defining mandatory Service Charge at restaurants as an unfair trade practice. To conduct a pulse check on the working of restaurants and consumer experiences on this, online community platform LocalCircles conducted a poll and asked people what has been their experience with service charge when they visited restaurants in the last couple of months. The poll received more than 8,500 responses.
The survey revealed that 30% consumers did not pay a service charge in restaurants (this included 21% where restaurant did not charge service charge and 9% where restaurant charged but the consumer got it removed). 53% consumers were charged service charge which they paid while 17% consumers did not pay attention to the billing details and where unsure if service charged was added to their bill.
This percentage stood at 27% a couple of months back which shows that more consumers are now standing up against this unfair practice.
In various discussions on LocalCircles, citizens have also been saying that online food ordering sites should have a ‘service charge’ filter so that consumers can transparently choose from restaurants which do or do not charge a service charge on bills.
A parallel poll also showed that 68% consumers believe restaurant management is keeping a portion of the collected service charge for themselves and only 5% thought that it is completely shared with the staff. This poll received 5,075 responses.
The connected poll showed 81% consumers believe that service charge collected by the restaurants but not paid to the staff leading to generation of black money.
Earlier, in April this year, the government had approved new guidelines making it clear that service charge is not mandatory and it is upon consumers if they wish to voluntarily pay on a hotel or restaurant bill. The Department of consumers affairs also advised customers to move the consumer courts if they are charged services charges.