Menu prices now exclusive of service charge and VAT?

[lkn]

My first trip to Bangkok in a while and I was surprised to find that some restaurants at shopping malls (IconSiam, Central World) now list their prices without sales tax (VAT) and also add a 10% service charge to the bill.

 

Is this a new thing?

 

In Thailand / Chiang Mai, I only ever remember having seen this at the restaurant at Four Seasons, and they make it rather clear that the list price is exclusive of service charge and sales tax, unlike the restaurants at the mall, where I did not notice it until the inflated bill came.

 

Rather annoying development, if this will be the norm. The service charge is just a hidden fee: If they want to increase prices by 10%, they should do so on the menu, not try to disguise it via a “fee”, same with the VAT, it is 7% everywhere in Thailand, it serves no purpose to give me the price without VAT, unless there is actually a possibility for me to get it back, but last I checked, tourists do not get VAT refunds for the meals they had in Bangkok when leaving the country…

[fulhamster]

Many places are now doing this .

Watch out for them adding the vat first, then charging service on the vat

[lkn]

I should add that I am almost as annoyed by the department stores where there is pretty much always a 20-30% discount on the item you want to buy.

 

If the item is always on sale, it is not actually a sale, you just increased the list price to make it look like I am getting a good deal!

 

But at least in this situation, the “surprise” is not to my disadvantage, i.e. looking at the price tag, then the employee telling me that actual price is 20-30% lower.

 

Unlike the restaurant where I read the price, eat the meal, and then is presented with a bill that is 17.7% higher than what I expected… and then add in the charge for the ice cubes and what have you…

[scubascuba3]

It's been reported a few times in Pattaya also, advertise food at a certain price then add on 7% afterwards, just don't go to those places. As for 10% service charge they can shove that also

[userabcd]

Its always been like that for some so called hiso restaurants in malls and other places.

[Celsius]

Welcome to retail 101

 

Back in your own country they do the same thing and call it "tipping".

 

At least in Thailand you have a choice,

 

[Everyman]

On 2/24/2023 at 4:59 PM, Celsius said:

Welcome to retail 101

 

Back in your own country they do the same thing and call it "tipping".

 

At least in Thailand you have a choice,

 

Tipping is optional too.

[FriendlyFarang]

On 2/24/2023 at 3:20 PM, fulhamster said:

Many places are now doing this .

Watch out for them adding the vat first, then charging service on the vat

It doesn't matter in which order they do the calculation, because multiplication is commutative. I think we are usually taught this in school in 2nd grade.

Edited February 28, 2023 by FriendlyFarang

[JayClay]

2 hours ago, FriendlyFarang said:

It doesn't matter in which order they do the calculation, because multiplication is commutative. I think we are usually taught this in school in 2nd grade.

That's exactly what the person you quoted was talking about.

 

If the menu says 7% vat and 10% service charge the you'd expect a bill of 100 bt to have two additional services charges; 10bt and 7bt making a toal of 117bt

 

However it's common practice to add the vat first, making the bill 107bt then adding 10% service to make 117.7bt total.

[FritsSikkink]

Has been there for decades in the more upmarket places. It should always be somewhere on the menu though.

[hotandsticky]

"Plus, plus"  (VAT 7%, plus whatever service charge, usually 10%) has been a feature of Bangkok (and 'better' restaurants in other areas)  for decades.

[SoilSpoil]

On 2/24/2023 at 4:59 PM, Celsius said:

Welcome to retail 101

 

Back in your own country they do the same thing and call it "tipping".

 

At least in Thailand you have a choice,

 

Since when is tipping mandatory? Bad service, no tip.

[Salerno]

2 minutes ago, SoilSpoil said:

Since when is tipping mandatory?

Since they added a "service charge" to the bill.

[FriendlyFarang]

1 hour ago, JayClay said:

That's exactly what the person you quoted was talking about.

 

If the menu says 7% vat and 10% service charge the you'd expect a bill of 100 bt to have two additional services charges; 10bt and 7bt making a toal of 117bt

 

However it's common practice to add the vat first, making the bill 107bt then adding 10% service to make 117.7bt total.

Why would you expect that the service charge is VAT exempt?

VAT is also charged on the service charge, thus making it actually 10.7%.

[prakhonchai nick]

Why do restaurants either add on a 10% service charge, or the waiters/waitresses expect a tip? Staff are just doing the job they have been contracted to do and paid for. 

 

Bank tellers do not expect a tip, or deduct a % from the money you withdraw. Petrol station attendents don't expect a tip, nor the check out girls at supermarkets............amongst thousands of others!

 

 

[phetphet]

Is the service charge optional?

 

I asked someone who works in a hotel and they told me that it is. In that case, surely it should be shown in the price of the meal, and only ever shown separately if it is indeed optional.

[JayClay]

18 hours ago, FriendlyFarang said:

Why would you expect that the service charge is VAT exempt?

 

Because it's supposed to go directly to the staff, who, as individuals, are not VAT registered.

[FriendlyFarang]

19 hours ago, prakhonchai nick said:

Why do restaurants either add on a 10% service charge, or the waiters/waitresses expect a tip?

The 10% service charge is to disguise their prices and make it look cheaper.

I hardly ever get the feeling that the waiters are expecting a tip, usually I don't tip.

[lkn]

21 hours ago, prakhonchai nick said:

Why do restaurants either add on a 10% service charge, or the waiters/waitresses expect a tip? Staff are just doing the job they have been contracted to do and paid for. 

The story I heard was that originally there were delis / butchers that, amongst others, sold prepared meals “to take home”, and some entrepreneural people would set up tables outside these shops and provide plates etc., so you would order the meal from the deli, but it was served by a third party, and you paid them a tip for this service (i.e. service charge).

 

If it worked exactly like that, I do not know, but I assume it’s not a lot different from today’s corkage fee in some countries, where you can bring your own wine, but pay the staff for “serving it” (and glasses).

 

But since the old times, tipping has gone mad in the U.S., where you tip basically every service worker you interact with, and even some you do not interact with, like cleaning staff at hotels, as their base salary on its own seems insufficient to make ends meet.

 

Lots of countries though had abandoned tipping: The first time I visited Japan, I was told that it could be seen as impolite to tip (as you’re telling the owner that they do not know how to price their stuff, or that the employees get too low a salary and need your handouts).

 

But tourism has spoiled many countries that used to be devoid of tipping, as when e.g. Americans visit, they will bring their habit of tipping, and then the locals will start to expect it from all tourists.

 

What really bothers me though is not so much that restaurants have a 10% service charge, but that they do not include it in the listed price, and now, it seems, they also do not include VAT in the listed price, this is just ridiculous! Every customer wants to know the actual price!

 

[lkn]

On 2/24/2023 at 4:59 PM, Celsius said:

Back in your own country they do the same thing and call it "tipping".

Back in my own country it is actually required by law to always list the final price with everything included!

 

And tipping is up to the customer, but I have never seen anyone tip at a restaurant at a shopping mall, where Thailand now add a 10% mandatory service charge, not included in the listed price (which also lack the VAT).

[lkn]

2 hours ago, FriendlyFarang said:

I hardly ever get the feeling that the waiters are expecting a tip, usually I don't tip.

When I first came to Thailand, it was zero baht for street food, a 20 baht bill for a regular Thai place, and 100 baht bill if it was a fancy place.

 

With digital payments though, I no longer tip, and nobody seems disappointed.

[Henryford]

I always boycott restaurants who do this, like a certain western pub in the Avenue in Pattaya

Edited March 1, 2023 by Henryford

[KannikaP]

On 2/28/2023 at 10:23 AM, JayClay said:

That's exactly what the person you quoted was talking about.

 

If the menu says 7% vat and 10% service charge the you'd expect a bill of 100 bt to have two additional services charges; 10bt and 7bt making a toal of 117bt

 

However it's common practice to add the vat first, making the bill 107bt then adding 10% service to make 117.7bt total.

Now do that with Bht 1000 and see the difference.

[NoshowJones]

On 2/24/2023 at 3:20 PM, fulhamster said:

Many places are now doing this .

Watch out for them adding the vat first, then charging service on the vat

If you are just having a one off meal and not returning to a restaurant, look at the price for the meal, have the exact money and just refuse to pay any more.

Just show the menu to the waitress/waiter. point out the price, pay it then say bye bye.

[NoshowJones]

52 minutes ago, lkn said:

The story I heard was that originally there were delis / butchers that, amongst others, sold prepared meals “to take home”, and some entrepreneural people would set up tables outside these shops and provide plates etc., so you would order the meal from the deli, but it was served by a third party, and you paid them a tip for this service (i.e. service charge).

 

If it worked exactly like that, I do not know, but I assume it’s not a lot different from today’s corkage fee in some countries, where you can bring your own wine, but pay the staff for “serving it” (and glasses).

 

But since the old times, tipping has gone mad in the U.S., where you tip basically every service worker you interact with, and even some you do not interact with, like cleaning staff at hotels, as their base salary on its own seems insufficient to make ends meet.

 

Lots of countries though had abandoned tipping: The first time I visited Japan, I was told that it could be seen as impolite to tip (as you’re telling the owner that they do not know how to price their stuff, or that the employees get too low a salary and need your handouts).

 

But tourism has spoiled many countries that used to be devoid of tipping, as when e.g. Americans visit, they will bring their habit of tipping, and then the locals will start to expect it from all tourists.

 

What really bothers me though is not so much that restaurants have a 10% service charge, but that they do not include it in the listed price, and now, it seems, they also do not include VAT in the listed price, this is just ridiculous! Every customer wants to know the actual price!

 

Exactly and the same applies to hotels too.

[lkn]

Been paying attention to a few more receipts. and whether they add VAT and/or service is inconsistent to the point of frustrating.

 

For example The Coffee Club will list their prices excluding service charge, except for their airport branches, there the prices do include service charge.

 

And speaking of The Coffee Club, I downloaded their app which had a coupon for a free drink (worth 100 baht), but guess what: I still had to pay service charge on the price of the free drink (so the true cost was 10 baht). That is not really free…

 

Something similar with a seafood buffet: They listed the price with VAT and service charge and then stamped a 10% discount on that price. Turns out the 10% discount was on the price excluding service charge, so we still had to pay service charge on the full amount, meaning the effective discount was only 9.1%.

 

I generally don’t mind high prices, i.e. I assume most stores run at a small profit, and if one shop is more expensive than another, they may pay their staff more, use better ingredients, have higher rent, etc.

 

What I do mind is this “trickery”, because it signals that the shop owner is effectively trying to deceive the customer by padding the bill with “hidden” expenses…

[Liverpool Lou]

On 2/28/2023 at 10:23 AM, JayClay said:

That's exactly what the person you quoted was talking about.

 

If the menu says 7% vat and 10% service charge the you'd expect a bill of 100 bt to have two additional services charges; 10bt and 7bt making a toal of 117bt

 

However it's common practice to add the vat first, making the bill 107bt then adding 10% service to make 117.7bt total.

It is "common practice" because it's the way it has to be done.  VAT is charged on the whole amount of the bill, i.e. the B110 is VAT assessable, not just the B100.  The final figure is the same in whichever order the calculation is made. 

[Liverpool Lou]

On 3/1/2023 at 6:35 AM, JayClay said:

On 2/28/2023 at 12:18 PM, FriendlyFarang said:

Why would you expect that the service charge is VAT exempt?

 

Because it's supposed to go directly to the staff, who, as individuals, are not VAT registered.

Staff working in restaurants that do pay the staff the 10% service charge still get their 10%, the VAT doesn't affect them. 

[JayClay]

12 minutes ago, Liverpool Lou said:

It is "common practice" because it's the way it has to be done.  VAT is charged on the whole amount of the bill, i.e. the B110 is VAT assessable, not just the B100.  The final figure is the same in whichever order the calculation is made. 

I don't know the intricacies of the laws here, so I'll bow to your superior knowledge.

 

Where I come from gratuity is VAT exempt and I suspect that many visitors or even residents would assume that to be the case here.

[JayClay]

7 minutes ago, Liverpool Lou said:

Staff working in restaurants that do pay the staff the 10% service charge still get their 10%, the VAT doesn't affect them. 

So?