Service charge: The unsavoury row over ‘forced’ restaurant tips in India

Image source, Getty Images

As the Indian government meets representatives of restaurants to sort out the contentious issue of the service charge that customers have to pay most times when they eat out, the BBC explains the unsavoury tussle over tips.

Nicole Ruth Ellis lives and works in Mumbai and visited a restaurant there a couple of months ago.

The brand strategist describes herself as a foodie who eats out at least twice a week.

The service was bad on this evening. They served the pizza in a deep dish and it broke.

She says the waiter came by and asked if she was enjoying her meal.

I told him that it was not great. He heard me but then walked away.

She says the bill included a 10% service charge.

I don't say that I won't pay the service charge, but I think we should be tipping only if the service is great. She tells me that it shouldn't be forced upon us.

Until a few years back, tipping was at the diner's discretion in India, but then many restaurants began charging a service charge.

The service charge was introduced to ensure that the tip is not taken by the waiter but is shared by all the staff, including the chefs, janitors, cleaners and dishwashers, according to one restaurant owner.

I think Indians are generous when it comes to tipping. Mr Sanghvi says he sees people giving tips to doormen and bellboys at hotels.

He says the tipping culture came to India from the West. In the 1950s and 60s India, just years into the country's independence, employers were able to pay workers below minimum wages if they earned tips.

Image source, Nicole Ruth Ellis

Eating out is a big business in India, with the industry valued at over $5 billion.

The waiter is paid poorly and is expected to make the shortfall from tips and service charge.

The Indian government insists that the service charge is voluntary and is to be paid at the discretion of consumers.

The Department of Consumer Affairs issued a set of guidelines saying that customers only had to pay the prices on the menu card along with government taxes and charging anything extra without their consent.

The National Restaurant Association of India was called by the authorities for a meeting on Thursday because most restaurants continue to add a service charge.

In a letter to the NRAI last week, the department said there had been complaints from consumers that they were still being forced to pay service charge, often fixed at high rates, and that they were harassed if they requested to remove it from the bill.

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Diners unhappy with the service can ask to have the charge deleted from their bill, according to some restauranteurs.

Saurabh Khanijo, owner of Kylin, a chain of popular pan-Indian restaurants, said that if patrons are unhappy, a good restaurant would immediately remove the service charge.

We don't charge for a dish if a customer isn't happy. It works in our favor. If I treat the guest well, they would come back.

Some customers have won compensation because of a refusal to pay the service charge.

Ms Ellis said that customers like her are too embarrassed to insist on removing it from their bill.

Image source, Getty Images

• it's intrinsically unfair toreward waiters alone when many others contribute to the success of the meal
• it tyrannises guests who are never sure how much of a tip to leave
• and if we do not tip the stewardess after a good flight or a nurse who treated us well during a hospital stay, then why must we tip a waiter?

He has argued that a service charge is a better bet. Unscrupulous restaurants often don't pass on all of the money to the staff, and that's a concern that's not fair, he says.

Mr Sanghvi says that he always says that increase your prices and pay your workers well. If you increase prices by 5%, it will cover all the breakages and a small price increase is not going to drive away your customers.

Nicole Ruth Ellis says bad service will happen.

She says that she feels strongly about service if it is not great, especially if she has gone to a fancy place. If I am happy with the service, I can pay if it goes away from the bill.