Service charges added to bills

[Jamiescott1]

Its been common in chain restaurants for a while for a discretionary service charge (usually 12.5%) being added to a bill automatically, with you having to ask for it to be removed.
I've just read an article that this is now spreading to pubs even when people order at the bar.
Its never happened to me in a pub (yet) but when presented with a bill with a service charge I always ask for it to be removed.

After eating at a Thai chain restaurant once I was presented with the bill including the discretionary service charge. I left the exact cash for the cost of the food and drink and left.
The staff then came and found me walking down the street, saying I hadnt paid enough. I explained that I had paid the full amount minus the discretionary service charge. They said to remove the service charge I should of spoken to the manager.

 

[CharlieSpotted]

when presented with a bill with a service charge I always ask for it to be removed.

Even if you're recieved good service? Rather mean.

 

[Iskra]

Even if you're recieved good service? Rather mean.

Shouldn’t good service be included as standard?

It’s a stealth price hike.

 

[Jamiescott1]

Even if you're recieved good service? Rather mean.

I prefer to leave a tip with the amount of my choice

 

[ChrisC]

If I have been out for a meal in the evening, usually with a group of friends, I don’t mind paying a service charge if we have been in the restaurant for most of the evening and have received good service. However, I would still prefer it to be a discretionary amount which the customer decides upon.

What does annoy me is the trend these days for many of the restaurant chains to either automatically add a service charge to the bill, or expect you to add an amount at your card payment, regardless of the occasion. If I am in town on my own at lunchtime and go somewhere for a quick one course meal I don’t think that I should always be expected to pay a service charge.

 

[westv]

Perhaps the answer is to use independent establishments rather than chain pubs/restaurants.

 

[Tetchytyke]

Shouldn’t good service be included as standard?

It’s a stealth price hike.

Food and drink attracts VAT at 20%, AFAIK the ‘discretionary’ service charge does not. Sometimes it’s a case of being careful what you wish for…

I normally tip at 10-15% anyway, so unless service has been particularly bad I don’t mind the service charge. I’d draw the line at a service charge for pouring a pint, but if it’s table service again I’m not fussed.

 

[ChrisC]

Perhaps the answer is to use independent establishments rather than chain pubs/restaurants.

That’s what I always try to do especially if I have plenty of time to find one. It is not always that easy in some city centres, especially in some shopping centres where independent establishments can be difficult to find. The food is usually much better quality and often at a far more reasonable price.

 

[Narrowgauge725]

A coffee shop tried to add a discretionary service charge and of course I insisted it was removed.

 

[Iskra]

Food and drink attracts VAT at 20%, AFAIK the ‘discretionary’ service charge does not. Sometimes it’s a case of being careful what you wish for…

I normally tip at 10-15% anyway, so unless service has been particularly bad I don’t mind the service charge. I’d draw the line at a service charge for pouring a pint, but if it’s table service again I’m not fussed.

As a customer, I’m not overly interested in helping establishments minimise their tax bill or the intricacies of their tax affairs.

At a time of economic hardship for many, when wages have not being keeping up with inflation and bills have even risen well beyond inflation (car insurance); places adding on an additional 10-20% to the price for ‘service,’ risk pricing themselves out of the market. Would they rather have satisfied customers paying 100% of their bill and returning, or miffed ones who may pay 120% once, but never return? Unless a restaurant is particularly over-subscribed it is playing a dangerous game adding on a service charge. I’d suggest it also creates an additional point of conflict in terms of customer complaints if things aren’t perfect, or if customers are looking for any old excuse to have it removed from the bill because they don’t agree with it in principle or resent the amount charged. It’s particularly grating when eating as a large group, when service is often poorest and at its least personal, but the % charge comes in at a significant amount.

I also feel that the economics of included service charges, don’t encourage quality service.

I’d much rather exercise my own discretion on such matters. As others have also opined, I tend to avoid chain restaurants anyway.

 

[Blindtraveler]

I tend not query it but this is largely because a I am happy to pay for good customer service and if I haven't received good customer service chances are I've likely already done something about it by the time we get to the bill stage and b, I'm pretty selective as to which chain outlets I use and the ones that I do frequent will generally be those which offer good or indeed excellent levels of service and quality for my hard earned and limited supply of cash



I just hope that when these service charges are automatically added that at least a percentage of this goes to the people who have been serving us as let's be totally honest here, if I've gone out with a group of friends and we've enjoyed nice food and drinks comma the people serving us have sacrificed their own social lives in order to allow us to have fun

 

[Red Onion]

Perhaps the answer is to use independent establishments rather than chain pubs/restaurants.

Unfortunately some independent places do this, I had one do that recently and there was no mention on the menu of this. I asked for it to be removed, partly on principle but also as the service was poor.

I don’t like this particular aspect of Americanism creeping in.

 

[Tetchytyke]

As a customer, I’m not overly interested in helping establishments minimise their tax bill or the intricacies of their tax affairs.

My point is that, if service was included in the menu price, that
service cost would also attract an additional 20% VAT. A 12.5% service charge would then be a 15% increase in price.

Providing the service charge goes to the staff- and good establishments make it clear that it does- then I don’t have an issue with the charge.

 

[jfollows]

I prefer to leave a tip in cash, having paid the bill by card, and I normally manage to ensure I have cash on me for that purpose. As long as the service wasn't bad, if the bill includes a "service charge" I will instead pay this by card and leave no further tip. I normally leave a tip of greater than the "discretionary service charge" that some restaurants (but not pubs, yet, in my experience) apply to the bill when they do. But if it's a "discretionary service charge" it's your discretion that pays this or doesn't, I wouldn't put up with nonsense about "speaking to the manager" and I'd be unlikely to go to the restaurant again if they tried that with me.
And if you're unlucky enough to get poor service then of course you shouldn't pay it!

 

[Iskra]

My point is that, if service was included in the menu price, that
service cost would also attract an additional 20% VAT. A 12.5% service charge would then be a 15% increase in price.

Providing the service charge goes to the staff- and good establishments make it clear that it does- then I don’t have an issue with the charge.

I see what you are saying, but I believe on principle that the cost of labour should be built into the menu already and not dependent on substantial, veiled additional charges and that if customers choose to leave additional tips for good service, that is at their discretion.

 

[northwichcat]

I see what you are saying, but I believe on principle that the cost of labour should be built into the menu already and not dependent on substantial, veiled additional charges and that if customers choose to leave additional tips for good service, that is at their discretion.

It is also a legal requirement for employers to pay staff the minimum/living wage, not including any tips. The minimum/living wage has increased significantly in recent years, so I suspect adding on a service charge isn't providing tips for staff but the way of the business increasing their income without increasing the cost of individual items too much.

 

[Iskra]

It is also a legal requirement for employers to pay staff the minimum/living wage, not including any tips. The minimum/living wage has increased significantly in recent years, so I suspect adding on a service charge isn't providing tips for staff but the way of the business increasing their income without increasing the cost of individual items too much.

I suspect this too. The Living Wage should mean that businesses do not need to charge a service charge at all, but that’s not what we’re seeing in reality…

 

[Starmill]

It is also a legal requirement for employers to pay staff the minimum/living wage, not including any tips. The minimum/living wage has increased significantly in recent years, so I suspect adding on a service charge isn't providing tips for staff but the way of the business increasing their income without increasing the cost of individual items too much.

The cash values have increased a lot, but the real values of the statutory minimum wages haven't gone up by much. In April, the rise will be from three fifths of median income to two thirds of it. In percentages this is about 6 points. Worthy growth over four years but not an enormous amount. Furthermore, even after April, Parliament still consider 18 - 20 year olds unworthy of the full statutory minimum despite their generally having the lawful obligation to pay for their own living costs, and that of their guardians having fallen away.

 

[yorkie]

If there is a service charge, this fact, along with the amount, should be made clear (ideally on their website and at the door and on the menus) well in advance.

Providing it is made clear, I don't generally have a problem with it; we could choose to go elsewhere and if not, we know what to expect, and that's fair enough. I would then only remove it if the service wasn't up to a good standard (or if they overcharged for any items, or something like that).

However, if there is anything wrong with the service, the establishment should not be surprised if they are asked to remove it. Furthermore, they are legally obliged to remove it without any reason being given.

Even if you're recieved good service? Rather mean.

If the service was good, and it was clearly advertised, then yes it could be considered rather mean; I certainly wouldn't be doing that, personally.

However, given what happened next, they clearly did not deserve to receive the service charge!

Shouldn’t good service be included as standard?

Absolutely.

In many countries, service charges are not added and tips are not expected; it's a shame the UK isn't one of those! However, it could be worse; the US is absolutely terrible in this regard.

 

[jfollows]

In many countries, service charges are not added and tips are not expected; it's a shame the UK isn't one of those! However, it could be worse; the US is absolutely terrible in this regard.

That's a good and true point.
It was a total pleasure eating out in Japan last year where they'd refuse to accept a tip, apart from perhaps rounding up to the next sensible amount. And the service was pretty much excellent everywhere as well.
It's not the only country to do this - but essentially tips and service charges in restaurants and the like are unpleasant for the customer, irritating, annoying, and sometimes painful.
The US is dreadful, I agree. But we're not much better.

 

[northwichcat]

Furthermore, even after April, Parliament still consider 18 - 20 year olds unworthy of the full statutory minimum despite their generally having the lawful obligation to pay for their own living costs, and that of their guardians having fallen away.

At least it's not as bad as it was 15 years ago. Under 25s had a lower minimum wage, they had to pay income tax if they earned over around £6000 and were ineligible for Working Tax Credits because you had to be 25+. That's one reason why the Conservatives and Lib Dems actually agreed that reforms were needed.

People tend to learn a lot during their first 2 years in work, so I suspect that's why the government consider a 21 year old more valuable than an 18 year old. However, if that's the case it does mean someone who took ill at age 18 and took 2 years to be fit for work gets treated as if they have either experience or higher education.

 

[dangie]

…I've just read an article that this is now spreading to pubs even when people order at the bar.…

I think that would be a pub which would never get my custom again.

 

[GRALISTAIR]

I don’t like this particular aspect of Americanism creeping in.

Absolutely.

I am of course used to it but it really is getting out of hand over here.

 

[Jimini]

I think that would be a pub which would never get my custom again.

100%. I had that a couple of years ago at the old Sports Cafe in Westfield Stratford (now long gone). I walked up to the bar and ordered a pint. The cost was £4.84. I made an idle comment to the barman about that being oddly specific, at which point he explained that the pint was £4.40 + a 10% service charge!!

 

[dangie]

Any odd small change I’m given when ordering at the bar usually goes into a charity jar if there is one.

 

[IanXC]

For me if an establishment chooses to advertise that they add a service charge then (perhaps with the exception of big groups) that comes across as rather big headed and makes me question whether I want to go in.

For establishments that choose to add a service charge to the bill before presenting it, I consider this in itself to be bad service, thus that no tip is due and won't pay it.

Leave me with a bill that reflects what I have ordered and if the establishment has provided good service then a tip is likely...

 

[Springs Branch]

I don’t like this particular aspect of Americanism creeping in.

I am of course used to it but it really is getting out of hand over here.

The other long-standing tradition in the US is to display most prices exclusive of sales tax. Meaning that what you actually pay, once tax + tip is added, is always significantly more than the number you saw on the price list / menu.

A slimy explanation I once heard from an American PR bod was that businesses actually do this as a service to their customers, so there is transparency in how much sales tax you're paying and an informed public can then hold their politicians to account.


Interesting the different ways businesses around the world find to fleece their mug punters customers.

In Australia, this sleight-of-hand 'discretionary service charge' has not appeared (yet). But we do have more and more businesses adding a 'card processing fee' for using debit and credit cards (Aussies are enthusiastic adopters of contactless and smartphone payments, so most mainstream transactions are done this way).

When this first came in, IIRC the surcharge was a trivial 0.85%. It's now morphed to typically 1.6-1.7% for Visa & M/card (more for 'vanity' cards like Amex) - still relatively small, unless you're paying hundreds of dollars for something, but I fully expect it to quietly slip north of 3% in the next year or two.

The other stunt some of the more popular or expensive eating establishments have tried over the past few years is to take a credit card deposit (or at least put a hold on some funds) when you make a reservation - refunded against your bill eventually, of course.

This was allegedly to 'focus the minds' of a significant minority who make restaurant bookings, then don't show up with no notification they won't be coming*, although, annoyingly, it's introduction was spun as "because of COVID".

The one and only time I was making a booking and was told I needed to pay a per-head deposit of $30 (£15), I said "Nah. Forget it, mate!" and hung up. Luckily, this initiative seems to have died a quick and quiet death, and I only know of one place that still tries this on.


* I have some sympathy here. I've been in several joints where there have been "Reserved" tables nearby set for reasonably-sized parties, and no-one turned up all evening.

 

[jfollows]

I think a better reason for not displaying the gross prices in the USA is simply because the sales tax rates differ, between different towns in the same state even, whereas in many countries the gross price are the same nationwide because the tax rates are set by central government. You could argue that "technology" could be used in the USA to display the gross prices, but now that just about everyone is accustomed to the way of doing it there's no great demand.

 

[Strat-tastic]

I came away from my visit to the USA thinking it's the land of hidden extras.

 

[Falcon1200]

There is an (independent, I think) coffee stall in a Glasgow station at which, when paying by contactless, customers are asked how much tip they would like to leave. This is solely a takeaway operation, not an at-seat service! I'm afraid I don't believe that an additional charge for service, even if voluntary, is at all justified in such circumstances.