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Should I refuse to pay service charge and leave cash tips?
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Then who would bring you your food (or clean your office, or pick up your bins, or sell you stuff, or look after your elderly relatives)?
On another note and as mentioned in another reply. When I was in Germany in a small restaurant / bar, The waiter was quite confused when I left a large tip as they normally only get a couple of Euros.
In many chains the staff are instructed to tell you that, even though in reality the tips are used to pay wages or perhaps meet the cost of free meals on duty...
I am already paying significantly more than the value of the food, fuel and frequently meagre wages, so object to being made to pay even more. If however the quality of the food and/ or service is beyond expectation I will happily reward with an extra amount.
This week we ate at a training establishment and were more than happy to give a voluntary gratuity especially as it stated all of the gratuity would be used to take the first year students on a trip. Both food and service were of a really high standard.
To answer the dilemma; if it is clearly stated before you order that there is an obligatory service charge then morally you should pay as that is the contract you implicitly entered into. You could register your disapproval of the practice; just easier not to use the establishment.