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People willing to pay service charge if tip goes to staff: Survey

india Updated: Jan 10, 2017 00:57 IST
HT Correspondent
HT Correspondent
Hindustan Times, New Delhi
Service charge in restaurants

People enjoy their food at a restaurant in Mumbai.(HT Photo)

Two in three people want restaurants to ask customers if they want to pay the service charge, according to an online survey by a citizen engagement platform.

LocalCircles, the online platform that carried out the survey, said most people were willing to pay the service charge if they liked the service but they wanted the money to go to the staff, not to the management.

Many hotels and restaurants add a 5% to 20% service charge to bills of their customers, prompting complaints that this ended up forcing customers to tip irrespective of the kind of service provided to them.

The overall results
  • 61% want service charge renamed as service tip
  • 72% believed restaurant management keeps a portion of service charge
  • 59% want restaurants to build their service cost in price of good
  • 68% willing to pay service tip for good service if money goes to staff
  • 68% want restaurant to have a proforma bill with a Yes/No option for service charge

Last week, the government ruled that it was an unfair trade practice under the consumer protection law and declared that it was for the customers to decide if they wanted to pay the charge.

The platform carried out a survey to ascertain how restaurants could determine if people were willing to tip restaurant staffers and how this money could be charged.

Nearly 60% felt that the service charge should be renamed as service tip so that there was no confusion that this was an optional charge.

Nearly 70% respondents said restaurant bills should have check box for service charge. The final amount charged to the consumer should be based on their selection, LocalCircles said in a statement.

As many as 5,000 consumers participated in the survey.

The statement said about 42% believed the service charge is pocketed by the management and 26% felt that some part of it is shared with the staff.

Only 5% of consumers believe it is shared fully with the staff.