Restaurant “service charges” - should they be disclosed?

There was an interesting discussion on BBC News this morning - on the lead up to the Xmas season, there is some debate about the practice of restaurants automatically adding a 12.5% service charges to bills.

Personally, I think this is a cop out.  Business owners know fine well that most customers won’t argue their bill even if they feel hard done by.  What do you reckon?

The argument is that most bills display the service charge at the end - but consider the layout of the bill - your order, your drinks, sub total, then a new total with the service charge.

Then consider the average customer at this time - a group of people who are on a night out - everyone has had a few drinks and are now most likely gearing up to move on, or busy chatting away with each other.  Restaurant owners know fine well these people aren’t very likely to check their bill (as long as the final amount isn’t crazy it will get paid) - even if they do, most folks are unlikely to argue about it.

But this is a fairly insidious approach to marketing.  Considering it is estimated that a satisfied customer has a 80% repeat custom rate, people should be looking after their customers and their business a little better.

The British public isn’t tight and it isn’t stupid.  Why force something on them that could result in them saying nothing and going away with a bad impression of your business, when most are likely going to tip at least 10% anyway?  In my opinion it is a very narrow strategy.

Service charges are optional - you need to approach the delivery of them as such.  A polite note on the table, or accompanying the bill - or even have the waiter politely explain the situation.  These are all very simple ways to avoid any potential issues with your customers and maximise customer satisfaction, employee tips and return visits from happy customers.

It really does drive me insane that even today, business savvy people are actively doing things that could hamper their long term revenue, when they could just as easily do something slightly different to maximise their revenue!

MG