Service charge

Most consumers still pay a service charge, but 68% want restaurants penalized for it: Poll

A survey by the online platform LocalCircles revealed that 60% of consumers who went to an air-conditioned restaurant in the past month paid a service charge. This comes even after the Indian government made it clear that paying “service charges” in restaurants is entirely voluntary and at the discretion of consumers.

LocalCircles conducted a survey which received over 23,000 responses from citizens residing in 296 districts of India. 64% of respondents were male while 36% were female. 48% of respondents were from Tier 1, 31% from Tier 2, and 21% from Tiers 3, 4 and rural districts.

The survey found that 60% of people mentioned “The restaurant charged and we paid” while 9% said “The restaurant charged and we had them removed”. Only 20% said “the restaurant didn’t charge” the service charge, while 11% “can’t say (didn’t pay attention or go to a restaurant in the last month)”.

In addition, the survey asked its respondents about the CCPA’s action against the enforced collection of service charges by restaurants.

Of that 19%, respondents said, “Issue sanction notices against all of these restaurants on a suo moto basis”, 10% responded, “Issue sanction notices against all restaurants where there is a bill of consumption with a service charge levied”, and 39% answered: “Do both of the above”.

The survey found that air-conditioned restaurants still charge a service charge despite the government recently issuing guidelines saying it’s completely optional. This is evident with 60% of consumers who have visited an air-conditioned restaurant in the last month confirming that they have paid a service charge.

When the survey compared results from 2017, 2018 and 2022, it’s clear that the campaign against enforced service fees that gained momentum in 2018 has fizzled and despite recent CCPA guidelines, restaurants do not stop the collection of service charges.

govt rueAlso, fewer consumers are speaking out against service charges. 68% of consumers are in favor of CACP beginning to issue penalty notices to restaurants by levying service charges based on consumer complaints/invoices and on a suo moto basis.

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