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Monday 30 January 2023

Surcharges and service charges a blight on the restaurant experience

There is a new threat to the customer enjoyment of a café or restaurant experience: the insidious creep of "surcharges" and "service charges".

Because hospitality workers are guaranteed a decent wage under Australian workplace laws, tipping has always been considered voluntary. I generally tip between 12-15% for good service, usually making sure the money goes straight into the hand of the person who has looked after us.

Most Australians are also used to the idea of paying a surcharge on a Sunday, or a public holiday, when businesses have to pay their staff an additional penalty rate. Or even for group bookings, who can be difficult and are notoriously poor tippers.

But how about a compulsory extra charge just because it is Monday? Or Wednesday.

A recent arrival on the Brisbane dining scene, Komeyui - an offshoot of a Melbourne business - caused a lot of debate on Facebook this week with its compulsory 5% "service" charge on midweek days.

The business does not make it clear whether or not the charge goes to staff, but if customers are paying a "service" charge then they can hardly be expected to also tip. And 5% is less than a lot of diners would leave voluntarily.

At the bottom of the menu is note saying: "Service charge of 5% on weekdays and Saturdays, 10% on Sundays and 15% on public holidays applies."

The owner of a successful local café says the surcharges like this - and for a glass of tap water - are a bad look. 

"People who are dining out hate to be confronted with extra charges," she says. "If the menu says $33, then that is what people expect to pay. Adding a surcharge likes this makes it look like a business has simply got its sums wrong when doing its pricing.

"It makes a lot more sense to build costs into your prices across the board and charge what people expect they are going to pay."

Others disagree. I spoke out strongly against added charges - I also hate being charged extra for a slice of bread and butter - and was told: "Your extreme position here is out of step and unhelpful to the industry."

Well, so be it. 

It is called the "hospitality" industry, not the "screw another 5% out of the unsuspecting" industry.

Another hospitality industry figure posted: "Product and service cost what they cost, but isn't that what ‘the price’ is. An additional service charge on special days you can understand, but if it’s just adding 5% everyday then shouldn’t that be the price?"

And the owner of a well-known wine bar contributed: "I don't think tipping has become a part of our culture yet. We expect employers to pay the right amount and build it into the price of their product/service."

Added charges also cause angst. Is this additional charge calculated before, or after, GST. And before, or after, any credit card surcharge. Another creeping issue.

One insider put it best, I think: "Does it go to the staff, who presumably get paid award wages, or is it a bit of icing on the cake for the business?"

A good question - and one that any business imposing such a charge should make very clear. 

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