Restaurants Charging 10 Percent Service Charge And Not Giving It To Their Staff

[Jingthing]

It has come to my attention that SOME Thai restaurants that charge a compulsory "service charge" (usually 10 percent) do not always distribute those monies to their staff. (Either giving nothing or not the full 10 percent.) From my point of view, that is stealing from their workers, lying to their customers, many of whom withhold from tipping more as they hope the 10 percent actually goes to the staff.

How do you feel about this situation? Do you eat at service charge places less because of the chance the service charge isn't being distributed? Do you tip additionally from the service charge in case it is not?

(Please note. I do think this is an important issue which a country like Thailand should address with laws and enforcement. If the bill says 10 percent service charge, there should be NO DOUBT that money goes to the staff and not the owners or professional managers. However, please do not "name and shame" specific restaurants here.)

Edited February 5, 2012 by Jingthing

[personchester]

No, It is not stealing from workers at all, service charge belongs to the restaurant and not to the staff, tips belong to the staff, not the service charge

Staff get paid their weekly/monthly wages from their employer, in order to keep the menu prices competitive some restaurants will not include the labour cost on to the menu prices, thus the menu costs (food and drinks) are entered net on to the bill, the labour cost is then added to the bill as a 10 % service charge, in the same way as VAT is added separately on to the bill as a 7% taxation charge.

Most restaurant customers do understand that, and if they receive a good service they will give tips, the staff know it's their money and they get it.

Some restaurants to not separately enter service charges, nor VAT charges, they include it all in the total menu price, and if staff get tips, then that is their money.

Staff get their agreed wages, weekly or monthly, whether the restaurant is busy or not, and the 10 % service charge is none of their business.

[janverbeem]

in order to keep the menu prices competitive some restaurants will not include the labour cost on to the menu prices, thus the menu costs (food and drinks) are entered net on to the bill, the labour cost is then added to the bill as a 10 % service charge,

You mean as in,to fool the customers about what's the actual price..........?

[Jingthing]

I am not buying this. In western countries where there is service charge ADDED to the bill (which means most people don't tip on top of that) doesn't the service money go to the staff as EXTRA income? Now which staff exactly is obviously an internal matter but I wouldn't think chefs, managers, or owners are generally not included. Do other people read the item service charge and NOT think the meaning/implication is for the staff as EXTRA money (like a tip)?

Edited February 5, 2012 by Jingthing

[Chonburiram]

No, It is not stealing from workers at all, service charge belongs to the restaurant and not to the staff, tips belong to the staff, not the service charge

Staff get paid their weekly/monthly wages from their employer, in order to keep the menu prices competitive some restaurants will not include the labour cost on to the menu prices, thus the menu costs (food and drinks) are entered net on to the bill, the labour cost is then added to the bill as a 10 % service charge, in the same way as VAT is added separately on to the bill as a 7% taxation charge.

Most restaurant customers do understand that, and if they receive a good service they will give tips, the staff know it's their money and they get it.

Some restaurants to not separately enter service charges, nor VAT charges, they include it all in the total menu price, and if staff get tips, then that is their money.

Staff get their agreed wages, weekly or monthly, whether the restaurant is busy or not, and the 10 % service charge is none of their business.

Now, that's complete BS.

For example, I order 1 Archa beer for 35฿, servcharge would be 3,5฿; then, why would I have to pay 8฿ sc for a bottle of Heineken who costs 80฿? (Same workload, different price...)

[janverbeem]

Op,you are obvious from the US,where as i understand it is required to tip in a restaurant.Do they ever add service charge to the bill in the US?

[zzaa09]

No, It is not stealing from workers at all, service charge belongs to the restaurant and not to the staff, tips belong to the staff, not the service charge

Staff get paid their weekly/monthly wages from their employer, in order to keep the menu prices competitive some restaurants will not include the labour cost on to the menu prices, thus the menu costs (food and drinks) are entered net on to the bill, the labour cost is then added to the bill as a 10 % service charge, in the same way as VAT is added separately on to the bill as a 7% taxation charge.

Most restaurant customers do understand that, and if they receive a good service they will give tips, the staff know it's their money and they get it.

Some restaurants to not separately enter service charges, nor VAT charges, they include it all in the total menu price, and if staff get tips, then that is their money.

Staff get their agreed wages, weekly or monthly, whether the restaurant is busy or not, and the 10 % service charge is none of their business.

F&B service employees are poorly paid their true value towards the said establishment.

Yet, they are the sustenance the maintains any of these businesses.

And less we forget, the majority working-class are the steady backbone of all substantial economies - just because it is real.

Edited February 5, 2012 by zzaa09

[Jingthing]

Op,you are obvious from the US,where as i understand it is required to tip in a restaurant.Do they ever add service charge to the bill in the US?

I haven't lived in the US for years but yes tipping is expected, not technically required but so ingrained that the tax authorities ASSUME tips as definite income. There 10 percent is a poor tip communicating poor service or cheap charlie, 15 percent OK, 20 percent the standard now in many big cities. I'm not sure what you mean though in your comment. I have traveled to countries where they add a service charge and I have always read that as a required tip and that the money is shared with the STAFF, not the owners. Edited February 5, 2012 by Jingthing

[zzaa09]

Op,you are obvious from the US,where as i understand it is required to tip in a restaurant.Do they ever add service charge to the bill in the US?

It ain't required. It's more a social dogma.

[Jingthing]

This thread is bringing out something I hadn't even thought of. Am I totally wrong to feel that when a service charge is added to the bill which you MUST pay, in Thailand or any country, the implied MEANING of that is that the money is for the staff as an extra income, similar to a tip? One poster seems to be saying I have been wrong. I am not convinced. Please discuss.

[ronz28]

I have never heard of personchester's interpretation before. I have always thought any service charge added goes to the service staff and if the percent is less than I thought warranted I would add some. I don't like service charges as I prefer the person serving me to get the tip and any sharing that goes on among the staff is up to them.

[thrilled]

I don't see what your complaining about.if ya can't afford it,eat at mcdonalds or at home.

I always tip the server 10-15% in thailand.

[Jingthing]

I don't see what your complaining about.if ya can't afford it,eat at mcdonalds or at home.

I always tip the server 10-15% in thailand.

Ignoring your lame insults, are you saying at a place with a compulsory 10 percent service charge in Thailand, that you add another 10 to 15 percent IN ADDITION to that?

[Jingthing]

I have never heard of personchester's interpretation before. I have always thought any service charge added goes to the service staff and if the percent is less than I thought warranted I would add some. I don't like service charges as I prefer the person serving me to get the tip and any sharing that goes on among the staff is up to them.

That's how I see it exactly. That is why it makes me ANGRY to hear that in some (or even many?) places in Thailand the service staff is NOT getting that money as a tip like bonus.

[Jayman]

When I see a 10% compulsory service charge on a bill I definitely assume that it's all going to the service staff. I know that in most restaurants in Thailand the tips are pooled and split at the end of the shift. I have asked service staff before if they have received the 10% being added on the bill and have been told that they share 5% and "the boss" keeps 5%. This seems to me to be very dishonest and a dis service to all parties.

I also feel it's deceiving when the 7% vat is not included in the menu prices. The only reason it seems they do this is to keep the appearance of lower prices. Once again I think places that do this are actually doing a dis service to themselves in the long run. When I get my bill only to see an extra 17% has been tacked on I feel slighted and I'll be less likely to return.

Edited February 5, 2012 by Jayman

[smokie36]

Cut back on the chilli rellenos and palm the waitress a few Baht instead.

[Jingthing]

BTW, I want to thank Jayman for inspiring the idea of starting this thread. Say no more.

Edited February 5, 2012 by Jingthing

[Jingthing]

Cut back on the chilli rellenos and palm the waitress a few Baht instead.

That's not necessarily an appetizing vision you are describing.

[Ijustwannateach]

I don't think you can exactly control the restaurants, either way. Most restaurants that have a service charge are tourist-oriented anyway, I find, and it's easy to avoid those (and usually much more cost-effective).

[DP25]

Op,you are obvious from the US,where as i understand it is required to tip in a restaurant.Do they ever add service charge to the bill in the US?

Some places do but it's not the norm. Although a lot of places that don't normally do it will add a service charge for large groups. They'll do it so you can't screw over the staff and not leave them a tip. If a waiter has a group of 8 it takes up a lot of time and he gets really screwed if they decide to not tip, so many restaurants will include the service charge in that situation. Waiters in the US are allowed to be paid under minimum wage, as little as $2 per hour in some states, so they would be on the streets without tips.

Anyway I don't really eat at places that have service charges here. Always seems to be the places for tourists that have them, normal Thai restaurants don't. Because of that I've always assumed that it's just a way for the restaurant to disguise higher prices and that it doesn't go to the staff. Normal tipping is just leaving some of your change behind.

[necronx99]

In Oz a service charge is only added on weekends and public hols and goes to the owner to compensate for staff penalty rates.

A problem with tipping staff directly is that many staff who no doubt contributed to your enjoyment never get tipped. (chef, kitchen hands etc.)

and even though the resteraunt may have a tip pool I'm sure many waitresses would pocket eh lion share before it got to the pool.

In Asia, where there are no penalty rates I would think that the surcharge would/should go to the staff. If there was a surcharge I would tip less or not at all or in fact avoid the place alltogether

Edited February 5, 2012 by necronx99

[zzaa09]

Most restaurants that have a service charge are tourist-oriented anyway.

Yep. Something that should be noted.

These type of eateries [tourist-oriented] are in the minority.

[personchester]

in order to keep the menu prices competitive some restaurants will not include the labour cost on to the menu prices, thus the menu costs (food and drinks) are entered net on to the bill, the labour cost is then added to the bill as a 10 % service charge,

You mean as in,to fool the customers about what's the actual price..........?

They are not fooling the customers, on the contrary, they are precisely indication their actual price structure that is to say ... food, drink, service charge (labour) and VAT.

Staff get their wages from their employer, and tips from their customers, and that is their income.

[personchester]

No, It is not stealing from workers at all, service charge belongs to the restaurant and not to the staff, tips belong to the staff, not the service charge

Staff get paid their weekly/monthly wages from their employer, in order to keep the menu prices competitive some restaurants will not include the labour cost on to the menu prices, thus the menu costs (food and drinks) are entered net on to the bill, the labour cost is then added to the bill as a 10 % service charge, in the same way as VAT is added separately on to the bill as a 7% taxation charge.

Most restaurant customers do understand that, and if they receive a good service they will give tips, the staff know it's their money and they get it.

Some restaurants to not separately enter service charges, nor VAT charges, they include it all in the total menu price, and if staff get tips, then that is their money.

Staff get their agreed wages, weekly or monthly, whether the restaurant is busy or not, and the 10 % service charge is none of their business.

Now, that's complete BS.

For example, I order 1 Archa beer for 35฿, servcharge would be 3,5฿; then, why would I have to pay 8฿ sc for a bottle of Heineken who costs 80฿? (Same workload, different price...)

You are entitled to disagree on any subject posted within this forum.

However, to respond in the way you did is indicative of working class vulgarity, and the onset of social decline, try to prevent it.

[personchester]

I have never heard of personchester's interpretation before. I have always thought any service charge added goes to the service staff and if the percent is less than I thought warranted I would add some. I don't like service charges as I prefer the person serving me to get the tip and any sharing that goes on among the staff is up to them.

That's how I see it exactly. That is why it makes me ANGRY to hear that in some (or even many?) places in Thailand the service staff is NOT getting that money as a tip like bonus.

You don't seem to understand it, showing the costs of individual items on the bill

is a detailed price structure for customers to take knowledge of.

The "service charge" is part of the restaurants general labour cost and therefore belongs rightly and correctly to the restaurant, and not to the staff, and it can not be regarded as tips.

Staff know they do not depend on "service charges", and know it's not their money, because they are being paid wages in a normal way, no matter whether the restaurant is busy or not, and that is to their advantage, otherwise, if depending on "service charges" low business periods would not provide sufficient income for them, they would have to leave, and look for a new job.

[ronz28]

That's a novel theory personchester. What country in the world practices that? Is that customary where you are from?

If all prices were set that way at restaurants in a country, I guess I would pay it, otherwise I would avoid eating at a place with such a pricing structure because the prices would not be competitive. I would just vote with my feet and go where I would get better value for my money and still tip.

Edited February 6, 2012 by ronz28

[Jingthing]

I have never heard of personchester's interpretation before. I have always thought any service charge added goes to the service staff and if the percent is less than I thought warranted I would add some. I don't like service charges as I prefer the person serving me to get the tip and any sharing that goes on among the staff is up to them.

That's how I see it exactly. That is why it makes me ANGRY to hear that in some (or even many?) places in Thailand the service staff is NOT getting that money as a tip like bonus.

You don't seem to understand it, showing the costs of individual items on the bill

is a detailed price structure for customers to take knowledge of.

The "service charge" is part of the restaurants general labour cost and therefore belongs rightly and correctly to the restaurant, and not to the staff, and it can not be regarded as tips.

Staff know they do not depend on "service charges", and know it's not their money, because they are being paid wages in a normal way, no matter whether the restaurant is busy or not, and that is to their advantage, otherwise, if depending on "service charges" low business periods would not provide sufficient income for them, they would have to leave, and look for a new job.

Are you speaking as an insider manager/owner of a restaurant in Thailand with a 10 percent service charge?

[Ulysses G.]

The "service charge" is part of the restaurants general labour cost and therefore belongs rightly and correctly to the restaurant, and not to the staff, and it can not be regarded as tips.

IMO it is dishonest to charge customers a service charge to use for paying the staff's salary. Restaurants should use their profits for that like every other business. Most employees here are paid next to nothing anyway.

Edited February 6, 2012 by Ulysses G.

[cardholder]

The "service charge" is part of the restaurants general labour cost and therefore belongs rightly and correctly to the restaurant, and not to the staff, and it can not be regarded as tips.

IMO it is dishonest to charge customers a service charge to use for paying the staff's salary. Restaurants should use their profits for that like every other business. Most employees here are paid next to nothing anyway.

Six and 2 threes.

Doesn't matter how they dress it up, at the end of the day a business has revenue lines (including an item like service charge) and cost lines. The difference is profit or loss.

Unless there is a policy of allocating all the service charge as 'gratuity' then it is simply a way of splitting the overall cost of the meal.

Personally, I don't like to see service charge added. As long as it is clearly highlighted then at least I have the choice of using that restaurant or not. I would prefer any such charge (unless used as gratuity) incorporated in the food and drink prices - I would also prefer to have gratuities left to MY discretion.

Edited February 6, 2012 by cardholder

[harryfrompattaya]

This thread is bringing out something I hadn't even thought of. Am I totally wrong to feel that when a service charge is added to the bill which you MUST pay, in Thailand or any country, the implied MEANING of that is that the money is for the staff as an extra income, similar to a tip? One poster seems to be saying I have been wrong. I am not convinced. Please discuss.

I respect you but I cannot believe that you did not known the owner kepts most of the money. In USA and the rest of the world. when thir is a service charge just do not eat there