Tipping the waiter for the service they provide at the restaurant has long been an accepted culture in the service industry in India and consumers never complained about it — it was optional after all. But over the past five years, the practice by restaurants of forcefully adding a service charge has left consumers miffed. A new survey reveals how big the problem is. Forty-three per cent of consumers in India are still being billed service charges forcefully, while only 9 per cent managed to get them removed when they asserted their rights, according to LocalCircles, a community social media platform.
The survey conducted in July 2023 showed that while progress had been made, there was still much to be done to protect consumers from such unfair practices. This despite the guidelines issued by the Central Consumer Protection Authority (CCPA) in 2022.
LocalCircles surveyed over 11,000 citizens from 303 districts across India. Sixty-six per cent respondents were men while 34 per cent were women. Forty-seven per cent respondents came from tier 1 cities, 36 per cent from tier 2 and 17 per cent from tier 3, 4 and rural districts.
The CCPA had, in July 2022, prohibited restaurants from automatically adding service charges to bills. However, the Delhi High Court had put a stay on these guidelines temporarily, urging industry organisations to take the lead in resolving the issue. Amid this lack of legal clarity on the levy of the service charge, consumers continue to be exploited, being forced to pay a charge even when dissatisfied with the services they receive at air-conditioned eateries.
According to LocalCircles, which has routinely conducted such surveys, consumers have often said that the charge should be a suggestive one with the option for the them to consent, fill, or check the box. Their July 2022 survey revealed that 71 per cent respondents had been forced to pay service charges in the last five years as it was included in the bill though the service was unsatisfactory. Among the respondents, 23 per cent had stated it happened once or twice, 18 per cent said it happened three to five times and 24 per cent respondents revealed it had happened as many as six to 10 times, while it happened more than 10 timed to six per cent of the respondents.