In the wake of the Department of Consumer Affairs taking charge to review the service charges levied by the restaurants and hotels, netizens have taken to Twitter to share how they really feel about the service that affects millions of consumers on a daily basis. While some called it a ‘sneaky practice’ or ‘ridiculous’ others weighed in on paying decent minimum wage to workers. Here are some of the responses:
“This is a sneaky practice and must stop. Many people don’t pay tips assuming this service charge goes to the service staff at restaurants. It often doesn’t. It is just a device to increase profit margins of owners,” Filmmaker Pritish Nandy tweeted.
Meanwhile, the Ministry of Consumer Affairs, Food and Public Distribution noted in a statement, “since this adversely affects millions of consumers on a daily basis, the Department will soon come up with a robust framework to ensure strict compliance by the stakeholders.”
During a meeting conducted on Thursday, major issues raised by the consumers on the National Consumer Helpline of DoCA relating to service charges such as compulsory levy of service charge, adding the charge by default without express consent of the consumer, suppressing that such charge is optional and voluntary and embarrassing consumers if they resist paying such charge etc were discussed. Further, guidelines on fair trade practices related to charging of service charges by hotels and restaurants dated 21.04.2017 published by DoCA were also referred to, the statement said.
During the meeting restaurant associations argued that “when a service charge is mentioned on the menu, it involves an implied consent of the consumer to pay the charge.” Service charge is used by restaurants/hotels to pay the staff and workers and is not charged for the experience or food served to consumers by the restaurant/hotel.
Consumer organisations observed that levying service charges is patently arbitrary and constitutes an unfair as well as restrictive trade practice under the Consumer Protection Act. Questioning the legitimacy of such charge, it was highlighted that since there is no bar on restaurants/hotels on fixing their food prices, including an additional charge in the name of service charge is detrimental to the rights of consumers.
As per a guideline issued by the Department of Consumer Affairs in April 2017, placing an order by a customer amounts to his agreement to pay prices in the menu along with applicable taxes. Charging for anything other than the aforementioned, without express consent of the consumer, would amount to unfair trade practice under the Act, the department said.
Further, considering entry of a customer to a restaurant/hotel as an implied consent to pay service charge would amount to the imposition of an unjustified cost on customer as a condition precedent to placing an order for food and would fall under restrictive trade practice under the Act, it said.
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