Sunday, 28 December 2008

The Discretionary Service Charge

This morning I've been reading a few menus from some London restaurants, one of them being the Wolseley Restaurant in Piccadilly. If you scroll right down to the bottom of the menu, you shall notice the legend: A 12½ % discretionary service charge will be added to your bill. This practice is commonplace in established London restaurants nowadays. I find it brazen and distasteful. I habitually tip waiting staff anyway, unless there is a reason not to.

It will be noted that this charge is discretionary; in other words, they'll not compel you to pay it. Nevertheless, it would be interesting to know how many diners deduct it; or strike it off their bill and give a smaller - or, indeed, greater - gratuity.

Restaurateurs know that, unless a meal is really dreadful or a member of staff is particularly rude, most patrons will settle their bill unquestioningly, irrespective of a substantial service charge. Some restaurants even have £2 cover charges too!

The only restaurant in Belfast which adds a discretionary 10% service charge to all bills, as far as I am aware, is Deane's in Howard Street.

I'd like to hear your views about this practice. Do you think it's fair; or do you find it objectionable?

Addendum: The service charge I allude to is imposed on individuals or couples; not parties of 5, 6 or more.


Stephen Barnes said...

I hate it. It's an excuse for restaurant owners to pay lower wages. It's also an ideal opportunity for staff not to declare their full earnings to Mr Tax Man. How many waiters will declare every penny of all those cash tips?

I don't eat anywhere that has any form of automatic service charge.

However, when I get good service at a restaurant I will provide a tip. Excellent service will get a bigger tip.

I'd be happier if tipping was discouraged and staff paid decent wages.

Timothy Belmont said...

I think it's quite an arrogant thing to do as well.
Their motives for doing it need to be scrutinized: is it because they pay their staff "pea-nuts" and get diners to subsidize the short-fall? Or because a few patrons are so mean that they don't leave a tip at all? The trouble is that the best, or very good, restaurants tend to get away with automatic service charges.


Manuel said...

As a waiter I can tell you that we DO pay tax on our tips as the service charge is handled by our employer and is processed through our wages.

What is it with people getting all hot and bothered about waiters and their tax bills? It's all the time! I mean if people put the same effort into questioning the fat cats and bankers who can afford fancy lawyers etc that know how to hide much larger amounts of money then the world would be a much better place.

Sake! You would think waiters were living the high life drinking champagne and eating caviar.

As for Deane's being the only place to offer a discretionary service charge I think you need to get out more as almost all the decent restaurants in the city do it. And it's always discretionary. If you don't want to pay it then don't. You don't even have to explain why you don't want to.

It really bugs me that everyone and his wife has an opinion about how I, as a waiter, should be paid. I don't stick my nose into your remuneration so what gives you the right to stick yours into mine?

It should be noted that over the Christmas period we only had one table not pay their service charge, they left almost the same amount in cash and paid the bill with a card.

Viva the waiters and viva the service charge......

Manuel said...

oh and Happy New Year.....

Timothy Belmont said...

I don't mind the practice of adding a service charge to parties of diners; it's individuals or couples I'm alluding to.
You sound a touch defensive. There's no need, as far as I'm concerned. As I said before, I invariably tip about 10%, more or less, in restaurants. Good service deserves it.
I've checked two restaurants: BK's and James St S. Neither of them add a service charge to individuals or couples; only parties of diners.
Perhaps you could name the establishments which add a service charge to every bill?


John Self said...

I agree with Tim. What particularly bugs me is that restaurants do this knowing well that often people will not realise that there is a service charge added, and will add another 10% or more on top! This is encouraged by the common practice now of having credit card terminals which ask "Would you like to add a gratuity?" even when the amount keyed in already includes the 'discretionary' service charge automatically added. That is unacceptable.

Manuel, the reason why the world and his wife has an opinion on this, and the right to poke their nose in, is because we all have to take part in it, which many people find embarrassing and uncomfortable. Most people, like me, pay a tip as a matter of course because they don't want to be considered mean, even if the service was not exceptional (which, sorry, but it rarely is, even in higher end restaurants). If prices in the restaurant were higher and waiters were paid more as a basic wage through that, I suspect most diners would breathe a sigh of relief.

Unknown said...

Oooh don't start me about Deanes. Many of my colleagues happily left a tip for months before reading the small print about the auto 10% gratuity AS WELL. I thought that was RUDE that nobody ever brought thatto anyones attention.

To me the service importance exceeds that of the food on the basis we EXPECT good food and therefore I tip the serving staff for enhancing my experience.

In the Reform Club we never tip but make a significant end of year payment which goes collectively to the staff.


Timothy Belmont said...

Just goes to prove that this stealthy charge, because it is written in small print at the bottom of menus; and, if an additional tip is paid this isn't pointed out, amounts to sharp practice in many instances.

Caveat Emptor!

Anonymous said...

I asked at a Thameside pub restaurant in London about the discretionary service charge to enquire if it actually went to staff. The reply was that the management retained ít to pay for the staff's Christmas party. So the staff in effect paid for their own party, not management, out of the service charge.

Anonymous said...

As a former waitress, I am opposed to service charges and will not eat at any establishment that has them. I also do not leave my tip on the scanner, as often the waiter pays the cost of using that scanner. I wait until my waiter brings my bill and slide the tip into his hand, and say thank you. Tips are gifts. They should not be taxable income, and they should not be used to top a waitperson's wages up to the minimum wage.

Anonymous said...

Let's have a list, and then write to all of them to tell them that we will not patronize them. Then, take it to the press. Let the press show the list, and let them question how much of the money the waitstaff pays taxes on, and how much they actually see in their wage packets.

Timothy Belmont said...

Thanks for that. Tim