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Old 2nd January 2011, 21:39   #31
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Default Re: Can a customer be charged for Service (at a restaurant)?

Sometime we had a discussion on the price quoted by most of these "elite" restaurants charging exorbitant rates over the MRP for say coke or mineral water. Now the cost over MRP is being argued to be the cost of serving the commodity. Now you charge 10% over that as service charge over MRP + Service Charge. How legal is that?

Personally I tip only when I feel like and once I come across a restaurant making me pay the Service Charge anyways, I prefer not to visit it again.
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Old 2nd January 2011, 21:47   #32
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Default Re: Can a customer be charged for Service (at a restaurant)?

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Sometime we had a discussion on the price quoted by most of these "elite" restaurants charging exorbitant rates over the MRP for say coke or mineral water. Now the cost over MRP is being argued to be the cost of serving the commodity. Now you charge 10% over that as service charge over MRP + Service Charge. How legal is that?

Personally I tip only when I feel like and once I come across a restaurant making me pay the Service Charge anyways, I prefer not to visit it again.
+100.

When asked why the cost was more than MRP, it was said, we are being serviced and hence it can exceed. Now they charge service charge.

Some places, you almost pay 25% extra than the actual cost of the food.

Its of no use in talking.
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Old 2nd January 2011, 21:50   #33
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Default Re: Can a customer be charged for Service (at a restaurant)?

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Some places, you almost pay 25% extra than the actual cost of the food.
They can charge as much as they want - even 250% extra is fine. As long as it's on the menu - & doesn't come as a sneaky charge.
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Old 2nd January 2011, 21:53   #34
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Default Re: Can a customer be charged for Service (at a restaurant)?

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Some places, you almost pay 25% extra than the actual cost of the food.
Exactly!! These days I avoid visiting such places all together.

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Originally Posted by carboy View Post
They can charge as much as they want - even 250% extra is fine. As long as it's on the menu - & doesn't come as a sneaky charge.
Well actually you can't, on items that have an MRP.

Last edited by Spitfire : 2nd January 2011 at 21:55.
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Old 2nd January 2011, 21:56   #35
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Default Re: Can a customer be charged for Service (at a restaurant)?

In India most people who deliver papers, waiters work in low income wages. As against U. S. So its not the question of whether they are in low income group or not, but tip should never be mandated. I don't believe in service charges. When I feel like tipping, I will tip the waiter to whatever amount. In India, its generally a tendency to get used to tipping and serving bad once he recognizes the customer who doesn't tip. I have the habit of tipping the cleaner of the table, instead of waiter.
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Old 2nd January 2011, 22:15   #36
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Exactly!! These days I avoid visiting such places all together.



Well actually you can't, on items that have an MRP.
In restaurants, you can charge anything you want I thought, even for items with MRP.
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Old 2nd January 2011, 22:40   #37
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Default Re: Can a customer be charged for Service (at a restaurant)?

Interesting thread! When I go out to eat, mostly with family - the tips are totally dependent upon the service. If the service is truly pathetic (happened at a restaurant of repute in Baner, for people who are from Pune) - zero tip, but accompanied with a note of displeasure to the management explaining why.

In my experience, places which charge service charge generally provide a more consistent way of service, which might not be what you are accustomed to or require. Considering these places are generally on the plus side of poshness, it's hard to believe minimum wages being paid to the staff - which makes them less dependent on quality of service expected from them. And you are paying a tip too!
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Old 2nd January 2011, 22:58   #38
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Default Re: Can a customer be charged for Service (at a restaurant)?

TaureanBull,

Interesting point on thetipping. Here I'd again like to call out the wrong labeling by shankar.balan. I've visited some 15 countries in my life and yes, we Indians are not prolific tippers but we're not that bad either.
In Luxor, after a 4 hour western bank trip (3 points and one forced trip to a glass factory or such thing) not only did the guide ask for tips - he was boring and quite crappy honestly, but we still tipped. and the other americans/canadians/swiss guys put coins in the envelope FWIW. Then the guide sends around a second envelope for the driver and tries to sell us an overpriced lunch! I mean, like whoa!!

This funda of Indians tipping badly comes because a large % of us who travel abroad do on backpacking trips (i.e already stretched finances) - young americans/europeans who're mostly backpacking tip almost as badly as some of us. I've seen The high tippers as mostly aged europeans (esp french) who've done well for themselves etc. Plus the cultural aspect applies here again.

As an aside - Indians must visit Egypt (specifically Luxor) to get a taste of how foreigners may feel at sea in India! (complete with cab walas who persist in following you & belligerent touts & unwelcome attention on women bordering on eve teasing). The same shoe sole which came unstuck & was fixed for rs 16 in Cairo was being quoted at Rs 160 in Luxor. Ofc, Cairo and Alexandria are beautiful timeless places in their own right!
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Old 2nd January 2011, 23:00   #39
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Default Re: Can a customer be charged for Service (at a restaurant)?

There should be a rule that any restaurant who wants to add a service charge should stick a notice at the entrance. Then lets see how many of these places charge the customers.
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Old 2nd January 2011, 23:24   #40
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Default Re: Can a customer be charged for Service (at a restaurant)?

Quote:
Originally Posted by Spitfire View Post
...

Well actually you can't, on items that have an MRP.
I recall a court verdict that said that restaurants can charge over MRP (for water and other packed stuff) as their service charges. This was in connection with a petition regarding multiplexes charging more than MRP for bottled drinks and water etc. According to the verdict, the multiplexes etc. cannot charge more than the MRP, but restaurants/hotels can.
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Old 3rd January 2011, 00:27   #41
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Default Re: Can a customer be charged for Service (at a restaurant)?

A tip is entirely based on satisfaction of service.

Whe even I order food for home delivery, i generally, tip the person about 20 bucks. But at times, if there is a dealy or anything, then why should i tip. I am unsattisfied.

And tipping cannot be imposed. Tipping like respect is something that should be earned and not commanded
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Old 3rd January 2011, 00:53   #42
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Default Re: Can a customer be charged for Service (at a restaurant)?

^^ agreed completely. well said :-)
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Old 3rd January 2011, 10:02   #43
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Default Re: Can a customer be charged for Service (at a restaurant)?

Guys who have doubts about the MRP clause should go to 5* and ask a pepsi at MRP! Of course you wont get. Because they are justified and legally backed.

Why should they not sell at MRP? Because MRP is for items purchased off the shelf. The hotels, restaurants etc serve the item through a waiter, provide a place to sit, chill the soft drink etc. Thats why he can charge extra. Thats what exactly is the service charge added to MRP.
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Old 3rd January 2011, 10:24   #44
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Default Re: Can a customer be charged for Service (at a restaurant)?

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Originally Posted by nandans2005 View Post

Finally, the check arrived. The surprise in the check was that they were charging a service charge @5% on the bill amount. Mind you ! it was not service tax, but something called " SERVICE CHARGE".

When the same was enquired, they said it was "MANAGEMENT DECISION" to do so and in other words called " TIPS"

My point is whether this is " LEGAL" AND " CORRECT".
Yes this is legal and correct as long as they display it prominently on the menu card , Restaurant wants you to bear the service charge they are making it clear up front.

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Originally Posted by jassi View Post
because the way the hospitality industry works is different from all these examples. i don't know if this is true for India, but globally waiters are normally paid 'minimum wage' and they are expected to delight customers and make their income using TIPS. This way you have a 'choice' if things are not up to the mark.
A correction this is the way hospitality industry works in western world that is USA , Europe and Australia but not necessarily globally specially if you do not want to exclude Asia from globe.

My personal experience in Korea and Japan if you tip at restaurant the hostess ( there is always a hostess in upscale restaurants) will be offended a lot , Similarly I have seen the porters helping disabled people at Airport profusely protesting against tips offered and accepting with smile after some 5 mins of insistence simply because they could not explain the situation to America who insisted on tipping.

This is simply not part of their culture and they uphold it vigorously.
Restaurants include all the charges including waiters salary in the rate.

We the people in India are at crossroads it was never part of our established culture to pay for service as charges were expected to be told upfront but as British ruled us for considerable time and people travel a lot to "Gora land" they have set this expectation by carrying over the custom from there. And this leads to confusion.

In USA waiters are expected to earn from tips and most university students pay for studies this way. So a 10% is expected else you should expect that waiter will spit in your soup before he brings to your table next time.

Restaurants in India should build a service model based on local customers expectations instead of asking Staff to coax and cajol customers to tip who are not in habit of tipping.

Last edited by amitk26 : 3rd January 2011 at 10:27.
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Old 3rd January 2011, 10:45   #45
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Default Re: Can a customer be charged for Service (at a restaurant)?

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Originally Posted by carboy View Post
In restaurants, you can charge anything you want I thought, even for items with MRP.
Yes, you can. I was replying to a general rule. Also if you are already charging MRP + then why the Service Charge?

Quote:
Originally Posted by pjbiju View Post
According to the verdict, the multiplexes etc. cannot charge more than the MRP, but restaurants/hotels can.
You are correct. So that makes the extra Service Charge illegal. The restaurants are charging Service Charge over an already Service Charged commodity.

Quote:
Originally Posted by TaureanBull View Post
Guys who have doubts about the MRP clause should go to 5* and ask a pepsi at MRP! Of course you wont get. Because they are justified and legally backed.

Thats what exactly is the service charge added to MRP.
Agree.. Our issue is charging Service Charge over and above the Service Charge already charged.

The Service charge over MRP is justified and legal. But then why not separate it out from the other items.
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