DoCA warns eateris on ‘service charges’
HYDERABAD: Cautioning restaurants against forcing customers to pay “service charges” as it should be at the discretion of the customer, the Department of Consumer Affairs (DoCA) on Monday summo-ned the National Restaurant Association on June 2 to discuss the issue. The DoCA pointed out that the restaurants and eateries are collecting service charges from customers by default when it should be voluntary and is not mandatory as per law.
According to DoCA, customers are often misled on the legality of such charges and harassed by restaurants on making a request to remove such charges from the bill amount. “Since this issue impacts consumers at large on a daily basis and has significant ramification on their rights, the department construes it necessary to examine it with closer scrutiny and detail,” the letter further adds.
The guidelines note that entry of a customer in a restaurant cannot itself be construed as consent to pay service charge. Any restriction on entry on the consumer by way of forcing her/him to pay service charge as a condition of placing an order amounts to ‘restrictive trade practice’ under the Consumer Protection Act.
The guidelines clearly mention that placing an order by a customer amounts to his/her agreement to pay the prices displayed on the menu along with the applicable taxes. Charging for anything other than the aforementioned without express consent of the customer would amount to unfair trade practice as defined under the Act.