Service charge

68% of Indians want CCPA to impose penalties for restaurant service charges: survey

Despite the government’s announcement that paying “service fees” in restaurants is completely voluntary and at the discretion of consumers, many consumers continue to voice grievances saying that restaurants still collect service fees from of them by default, mainly for the air conditioner, revealed a LocalCircles poll.

Recently, the Department of Consumer Affairs (DoCA), in a statement, warned restaurants against forcing the collection of “service charges” in the bill. Additionally, DoCA officials also met with the National Restaurant Association of India (NRAI) to discuss issues relating to service charges levied by restaurants and the association argued that such charges were not illegal.

According to the LocalCircles survey, conducted in May 2022 with more than 23,000 responses from citizens in 296 districts nationwide, about 29% of consumers said they do not pay service charges in restaurants. The survey received responses from 64% men and 36% women. About 48% of respondents were from Tier 1, 31% from Tier 2, and 21% from Tiers 3, 4 and rural areas.

Asked about the most common experience with service charges if one visited an air-conditioned restaurant in the last month, 60% of citizens answered “The restaurant charged and we paid”, while 9% said answered: “The restaurant charged and we got them”. remove”. Nearly 20% said “the restaurant didn’t charge” the service charge, while 11% say they didn’t pay attention to it or didn’t go to the restaurant on last month.

This suggests that, although the government recently issued guidelines calling restaurant service charges optional, the majority of consumers said restaurants charge service charges and pay for them.

LocalCircles, in a similar survey conducted in May 2017, found that approximately 27% of consumers said they did not pay service charges in air-conditioned restaurants, with that number rising to 39% in May 2018. However, this percentage came as high as 30% in May 2022. “Now, despite the government issuing a directive labeling restaurant service charges as optional, only 29% of consumers in June 2022 did not have to pay the service charge,” the report read.

It also suggests that no restaurants have stopped collecting service charges and, in fact, it seems more consumers are seeing them on their bills, LocalCircles added.

When asked how the Central Consumer Protection Authority (CCPA) should act against restaurants that always levy forced service charges on bills, 19% said “Issue criminal notices against all such restaurants on a base suo moto”, 10% answered “Issue criminal notices against all restaurants where there is a consumer bill with a service charge levied”, and 39% say they do both of the above.

In addition, 13% of citizens also said that “the government should just ask the state government to take action against restaurant violations in their state”, 16% said that “the government should not take any criminal action and let the consumer carry the matter with the restaurant”, while 3% had no opinion. On average, 68% of consumers want CACP to start issuing penalty notices to restaurants that charge service fees.