The Department of Consumer Affairs has called for a meeting with restaurant owners on June 2, stating that consumers are being compelled to pay service charges, often set at arbitrarily high rates. The move follows a letter from Consumer Affairs Secretary Rohit Kumar Singh to the National Restaurant Association of India, where he raised concerns about restaurants and eateries automatically collecting service charges from consumers, despite it being intended to be voluntary and at the discretion of consumers.
The Department of Consumer Affairs noted that consumers are frequently coerced into paying service charges, often at unreasonably high rates, with false information about the legality of such charges. The department emphasized the need to scrutinize this issue more closely due to its impact on consumers and their rights.
The meeting will address four key issues related to service charges levied by restaurants: making service charges compulsory, including service charges under the guise of other fees or charges, not informing consumers that service charges are optional, and pressuring consumers who resist paying service charges.
Referring to guidelines issued in April 2017, the department highlighted that a customer entering a restaurant does not automatically imply consent to pay service charges. Any restriction on consumer entry, forcing them to pay service charges as a condition for placing an order, is considered a “restrictive trade practice” under the Consumer Protection Act.
The guidelines emphasize that a customer placing an order agrees to pay the prices displayed on the menu card along with applicable taxes. Charging for anything beyond this without the express consent of the customer would be deemed an unfair trade practice. Consumers have the right to be heard and redressed under the provisions of the Act in case of unfair or restrictive trade practices, and they can approach a Consumer Disputes Redressal Commission/Forum of appropriate jurisdiction, as per the guidelines.