Yes, you can refuse to pay a service charge in a restaurant if the restaurant did not explain that a service charge would be added to your bill before you began eating. However, paying a service charge is customary in US restaurants, and waiters and service staff depend on it as a part of their income.

This article explores the concept of service charges in both restaurants and hotels, shedding light on their legality, distribution, and impact on the industry.

What Is a Service Charge?

A service charge is an additional fee added to your bill when dining in a restaurant or staying in a hotel. This fee is intended to cover the cost of service provided during your visit. In the case of restaurants, it’s an alternative to the traditional tipping system where customers leave gratuities for the service staff based on the quality of service they receive.

In “Restaurant Tipping and Service Quality: A Tenuous Relationship”, written by Michael Lynn and published in the Cornell Hotel and Restaurant Administration Quarterly, Bernard Schreiner points out that eliminating tipping would remove the motivation to deliver excellent service.

Is It Legal for Restaurants To Add a Service Charge?

Yes, it is legal for restaurants to add a service charge. As long as the restaurant discloses the existence of the service charge before you place your order or begin your meal, they are within their rights to include it. This disclosure is often done through a note on the menu and also included as a statement on the receipt. Service charges may be added on alcohol charges during happy hours.

Who Gets the Service Charge in a Restaurant?

Traditionally, waitstaff, kitchen staff, and sometimes management get the service charge in restaurants. It is distributed among various roles, mainly those that contribute to your dining experience.

The specific distribution varies from one establishment to another and ensures that the individuals working behind the scenes, such as chefs and dishwashers, also benefit from the service charge, not just the front-of-house team.

What Is a Restaurant Service Charge?

A restaurant service charge is a predetermined, non-negotiable amount of money added to your bill at restaurants. This fee is intended to provide a more stable income to service staff while eliminating the need for customers to calculate and leave tips. The rationale behind implementing service charges is to ensure fair compensation for all employees contributing to your dining experience.

What Is a Hotel Service Charge?

A hotel service charge is a predetermined, non-negotiable amount of money added to your bill at hotel. This may be intended to cover the various services you receive during your stay, including housekeeping, concierge services, and more. Like in restaurants, this service fee ensures that the visible and behind-the-scenes hotel staff are fairly compensated.

Wrapping Up

While you can refuse to pay a service charge in a restaurant or hotel if not disclosed beforehand, it’s essential to understand that service charges play a significant role in supporting the hospitality industry. These charges aim to provide more stability and fairness in compensation for the staff who make your dining and lodging experiences enjoyable.