Majority consumers opt for restaurants to include 'YES, NO' check box for service charge

Dinning at a restaurant in today's time can turn out to be an expensive affair, considering the fact that all the extra charges and taxes have to be paid, in addition to the cost of what one orders.

As per a recent announcement by the Department of Consumer Affairs, the 'service charges', which restaurants include in addition to taxes, are not mandatory, and the customers can choose not to pay them, if they are not satisfied with the service received.

Now, that service charge has become a major issue of contention as most hotels and restaurants are levying this charge in their bills, a survey is undertaken by LocalCircles under which a majority of consumers have voted in making service charge optional.

However, 68 percent of consumers have opted for restaurant bills to include a YES, NO check box for service charge. The final amount charged to the consumer should be based on their selection.

With participation of over 5000 consumers from over 120 districts of India, the survey includes questions such as should renaming of service charge as service tip be done for better consumer understanding, where 61 percent of consumers agreed to this change.

Another 33 percent did not agree to this, while six percent did not comment. Technically, the service tip is to be paid to the serving staff and not to the management of the restaurant.

Therefore, the next question was about the utilization of the service charge collected. Almost 42 percent of them believed that the service charge is kept by the management, 26 percent felt that some part of it is shared with the staff, while only five percent of consumers believe it is shared fully with the staff. This means that the distrust with the collection and utilization of this charge is very high among consumers.

The rationale offered for levying a compulsory service charge on all consumers by restaurants is that it ensures that a tip is paid to their serving staff. But as a tip is considered as voluntary and has to be a choice that consumers should exercise.

LocalCircles asked the question whether all service costs should be incorporated in the food cost or main bill and the tip be made purely a voluntary thing. Majority 59 percent of the consumers said yes to such a move, while 37 percent objected to it and four percent were non-committal.

Majority almost 68 percent of the consumers are willing to pay a tip to the serving staff if they feel the service rendered to them as good and going to the staff. Only 26 percent of the consumers are not willing to pay the tip, while six percent can't say.

This means that large majority are the in favour of paying a tip, but due to a small minority the tip has been made compulsory in the form of a service charge.

To make the payment of the tip a choice and voluntary exercise the final question was on should consumers be offered the option to pay the tip before the bill is generated. An overwhelming 68 percent supported such move while 27 percent opposed it and five percent said can't say.