Service charge debate

Guidelines issued by the government on service charges leave restaurants in a tough spot

Service charge debate
Service charge debate
OLM Desk - 03 May 2017

The government issued guidelines on service charges being levied, especially at restaurants. The move comes closely after the suggestion asking eateries to check on portions that they serve to monitor wastage. The suggestion has not gone well with restaurant holders, particularly the guideline suggesting they leave a ‘blank space’ in the bill for service charge, and leave the discretion of putting the amount and paying it with consumers, instead of printing it in advance. The debate on service charge has been ongoing; especially as the government had stated that the charge is at the consumer’s discretion and cannot be a diktat by hoteliers. If you think restaurants will do away with the charges—it is unlikely to be the case. A smart way to circumvent the order is to either increase the price in the menu or reduce the quantity of the portion being served. Either way, the establishment wins, as for consumer choice—the option to consume or not is left to you. This way, hotels and restaurants will protect themselves from the hefty fines and stringent action that the government is proposing.

olmdesk@outlookindia.com

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