New Delhi: The government reiterated on Monday that payment of “service charges” in restaurants is voluntary and at the discretion of consumers.
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It was pointed out in the letter that consumers are forced to pay service charges, often set at arbitrarily high rates by restaurants. Consumers are also being misled about the legality of these charges and harassed by restaurants when they ask to remove these charges from the bill amount, the statement added.
“Given that this issue affects consumers as a whole on a daily basis and has significant consumer rights ramifications, the department has found it necessary to examine it more closely and in detail,” the letter adds.
Among the issues to be discussed at the meeting are — restaurants making service charges mandatory; add service charges to the bill under cover of other fees or charges; remove to consumers that payment of service fees is optional and voluntary; and embarrass consumers if they refuse to pay the service charge.
The Department of Consumer Affairs has already issued guidelines dated 21.04.2017 on the charging of service charges by hotels/restaurants. The guidelines clarify that a customer’s entrance into a restaurant cannot by itself be construed as consent to pay a service charge. Any entry restriction imposed on the consumer by requiring them to pay a service charge as a conditional percentage to place an order amounts to a “restrictive business practice” under consumer protection law, the statement said. .
The instructions clearly mention that the placing of an order by a customer is equivalent to his commitment to pay the prices displayed on the menu card as well as the applicable taxes. Billing for anything other than the above. without the express consent of the customer. would amount to an unfair trade practice within the meaning of the law, he said.
