Government Directs Restaurants: Service Charges Optional for Customers
The Department of Consumer Affairs has recently taken a stand on the issue of service charges in restaurants, emphasizing that customers should have the freedom to decide whether or not to pay them. In a notice issued by the department, it has been explicitly stated that service charges should not be mandatory and should be considered as an optional fee. Furthermore, customers should not be compelled to pay the service charge, especially if they are dissatisfied with the quality of service provided.
The Right to Exclude Service Charges
According to the Department of Consumer Affairs, individuals dining at restaurants have the right to request the exclusion of service charges from their bill. Secretary Rohit Kumar has reached out to leaders in the hospitality industry, urging them to advise their members against imposing a service charge when customers explicitly express their desire to have it removed.
The notice specifically addresses Kabir Suri, President of the National Restaurant Association of India (NRAI), and Suresh Poddar, President of the Federation of Hotel and Restaurant Association of India (FHRAI). It clarifies that the service charge can be considered as a form of voluntary tips or gratuity, which customers can choose to pay based on their satisfaction with the quality of service received at the establishment.
Dispute Prompts Government Response
The Department of Consumer Affairs issued these guidelines following a heated incident at a restaurant located in Noida’s Spectrum Mall. The incident involved a dispute over a service charge amounting to Rs 970, which led to alleged physical altercations between customers and staff outside the restaurant. The incident gained attention when a video of the altercation circulated online.
In response to the notice from the Department of Consumer Affairs, Kabir Suri, President of the NRAI, acknowledged the instructions and assured that the association has taken note of the concerns raised. However, an unidentified member of the NRAI argued that service charges are typically distributed among all the staff members. They drew a parallel to convenience fees charged in railways, airports, and taxis, suggesting that the service charge operates on a similar principle.
The government’s directive aims to empower customers and ensure transparency in the billing process at restaurants. By declaring service charges as optional, customers have the right to exercise their choice based on their experience. This development is expected to bring about a shift in the way service charges are perceived and implemented across the hospitality industry.
Restaurants are encouraged to educate their staff about the new guidelines and ensure that customers are well-informed about their right to exclude service charges if they wish to do so. This step will contribute to enhancing customer satisfaction and fostering a positive dining experience in the restaurant industry.
It is important for restaurants and customers to maintain open lines of communication to address any concerns or grievances related to service charges. By working together, the industry and consumers can create an environment that promotes fairness, quality service, and customer satisfaction.