Please respond to CMA consultation to put an end to restaurants' additional "service charges"

RefluentBeans

NFH said:

NFH said:

Even if an automatically-added percentage is purportedly optional or discretionary, restaurants automatically add it to the bill without first seeking diners' consent. This coerces many diners into paying it because they feel socially awkward asking for it to be removed from the bill, particularly if they are dining in a group of friends or colleagues, and many restaurants impede its removal, for example by taking away the bill to reprint it or by restricting the most convenient payment method to payments that include the additional percentage. Therefore when a percentage is automatically added to the bill without the consumer's express consent whereby the consumer did not opt in, it is arguably not genuinely optional or discretionary.

RefluentBeans said:

It’s also fairly easy to remove the discretionary service charge. People should be checking their receipt before they pay.

I don't understand your response. I explained why it's difficult to remove, and you responded by saying it's fairly easy to remove without explaining how.

Any data to support that? The discretionary charge is just that! I think it’s fairly easy to ask to remove the discretionary charge. Like I said if people checked the bill and saw that the restaurant put an additional main on there people wouldn’t just pay that? So why is a discretionary charge any different? 

NFH

RefluentBeans said:

NFH said:

NFH said:

Even if an automatically-added percentage is purportedly optional or discretionary, restaurants automatically add it to the bill without first seeking diners' consent. This coerces many diners into paying it because they feel socially awkward asking for it to be removed from the bill, particularly if they are dining in a group of friends or colleagues, and many restaurants impede its removal, for example by taking away the bill to reprint it or by restricting the most convenient payment method to payments that include the additional percentage. Therefore when a percentage is automatically added to the bill without the consumer's express consent whereby the consumer did not opt in, it is arguably not genuinely optional or discretionary.

RefluentBeans said:

It’s also fairly easy to remove the discretionary service charge. People should be checking their receipt before they pay.

I don't understand your response. I explained why it's difficult to remove, and you responded by saying it's fairly easy to remove without explaining how.

Any data to support that? The discretionary charge is just that! I think it’s fairly easy to ask to remove the discretionary charge. Like I said if people checked the bill and saw that the restaurant put an additional main on there people wouldn’t just pay that? So why is a discretionary charge any different? 

Data? What kind of data? I've already cited some example scenarios.

What happens where a group of friends or colleagues are dining, where the bill is being split equally, but one diner doesn't want to pay the so-called service charge? It's socially awkward and mathematically awkward to remove it for individual diners. In this scenario, it is not genuinely optional or discretionary. The so-called service charge is added without diners' express consent.

Some restaurants allow the bill to be paid online, often by scanning a QR code, entering a table number and using Apple Pay or Google Pay. This can save a lot of time in requesting and paying the bill. However, these restaurants typically don't allow this payment method to be used unless the so-called service charge is paid. An example is Wahaca.

Other restaurants delay diners' departure if they ask to pay without the so-called service charge. Instead of simply taking payment for the total without the service charge, staff take the bill away to reprint it, which can delay diners' departure by several minutes.

Some restaurant staff complain if the diners ask for the so-called service charge to be removed with coercive comments such as it is part of their wage.

In view of all these examples as well as many others, for a so-called service charge to be genuinely optional, diners would need to opt in with their express consent.

Grumpy_chap

NFH said:

Grumpy_chap said:

Plus "transaction fee" £1.50 per order for actually paying

Fees for paying by card have been outlawed 

Except it was not a fee for paying by card.
It was a fee for paying.  Simply for paying.  By any means.

NFH said:

If it's a charge for paying, and you are paying by card, then it's outlawed by the legislation that I quoted above. For other means of payment, Regulation 4 states "A trader must not charge consumers, in respect of the use of a given means of payment, fees that exceed the cost borne by the trader for the use of that means".

Are the fees borne for the use of the payment limited to only the banking processing costs?  Or can the fees include a contribution to the costs of administering the payment, operating the online processing platform, etc?  You don't get many minutes of an Accounts Administrator, even at NMW, for £1.50.

born_again said:

Grumpy_chap said:

TBH - I am not really sure how a 1980's has-been group can get away with charging even the top-line price, let alone once all the compulsory add-ons are added.

That is cheap. Many other concerts are the other side of £100.

Well, this event is much more than we paid to see any of Bananarama, Rick Astley, Spandau Ballet.  

NFH

Grumpy_chap said:

NFH said:

Grumpy_chap said:

Plus "transaction fee" £1.50 per order for actually paying

Fees for paying by card have been outlawed 

Except it was not a fee for paying by card.
It was a fee for paying.  Simply for paying.  By any means.

Please read the legislation: "A payee must not charge a payer any fee in respect of payment by means of — a payment instrument which — (i) is a card-based payment instrument".

Grumpy_chap

NFH said:

Grumpy_chap said:

NFH said:

Grumpy_chap said:

Plus "transaction fee" £1.50 per order for actually paying

Fees for paying by card have been outlawed 

Except it was not a fee for paying by card.
It was a fee for paying.  Simply for paying.  By any means.

Please read the legislation: "A payee must not charge a payer any fee in respect of payment by means of — a payment instrument which — (i) is a card-based payment instrument".

Hmmm - it seems as though that excerpt prohibits this type of charge.
Odd that this type of charge is widespread when buying tickets and nothing we can do about it.

RefluentBeans

NFH said:

RefluentBeans said:

NFH said:

NFH said:

Even if an automatically-added percentage is purportedly optional or discretionary, restaurants automatically add it to the bill without first seeking diners' consent. This coerces many diners into paying it because they feel socially awkward asking for it to be removed from the bill, particularly if they are dining in a group of friends or colleagues, and many restaurants impede its removal, for example by taking away the bill to reprint it or by restricting the most convenient payment method to payments that include the additional percentage. Therefore when a percentage is automatically added to the bill without the consumer's express consent whereby the consumer did not opt in, it is arguably not genuinely optional or discretionary.

RefluentBeans said:

It’s also fairly easy to remove the discretionary service charge. People should be checking their receipt before they pay.

I don't understand your response. I explained why it's difficult to remove, and you responded by saying it's fairly easy to remove without explaining how.

Any data to support that? The discretionary charge is just that! I think it’s fairly easy to ask to remove the discretionary charge. Like I said if people checked the bill and saw that the restaurant put an additional main on there people wouldn’t just pay that? So why is a discretionary charge any different? 

Data? What kind of data? I've already cited some example scenarios.

What happens where a group of friends or colleagues are dining, where the bill is being split equally, but one diner doesn't want to pay the so-called service charge? It's socially awkward and mathematically awkward to remove it for individual diners. In this scenario, it is not genuinely optional or discretionary. The so-called service charge is added without diners' express consent.

Some restaurants allow the bill to be paid online, often by scanning a QR code, entering a table number and using Apple Pay or Google Pay. This can save a lot of time in requesting and paying the bill. However, these restaurants typically don't allow this payment method to be used unless the so-called service charge is paid. An example is Wahaca.

Other restaurants delay diners' departure if they ask to pay without the so-called service charge. Instead of simply taking payment for the total without the service charge, staff take the bill away to reprint it, which can delay diners' departure by several minutes.

Some restaurant staff complain if the diners ask for the so-called service charge to be removed with coercive comments such as it is part of their wage.

In view of all these examples as well as many others, for a so-called service charge to be genuinely optional, diners would need to opt in with their express consent.

Anecdotal and what-aboutisms aren’t data. Data would be seeing if this affects consumers. Your thesis is that ‘consumers are disadvantaged by service charges being applied, and people being too socially awkward to ask for these to be removed’. I’m asking for you to support this with facts and not just ‘what about in this situation’. 

I agree that event charges where there is no option but to pay are unfair as these charges are known by the retailer ahead of time and the consumer has no option but to pay them. But for discretionary charges, the argument you’re making is significantly weaker. 

To clarify, I also dislike tipping culture. It seems to be becoming very popular in places it wouldn’t have been expected to be seen before the pandemic. But your argument is very very weak here. The best thing to do would be to get legalisation passed for these mandatory charges, as this is a far stronger argument. If you don’t, you’re treating both mandatory and discretionary tipping the same which devalues the issue with mandatory charges. 

Alderbank

Grumpy_chap said:

Hmmm - it seems as though that excerpt prohibits this type of charge.
Odd that this type of charge is widespread when buying tickets and nothing we can do about it.

It seems like that because the above is a carefully redacted excerpt cherry picked from another piece of legislation, reg.6 of the 2012 Consumer Rights (Payment Surcharges) Regulations.

When read in full however, as should always be done with legislation, those regs simply say you can't charge a consumer extra just for paying by card.

My local theatre charges £1 per ticket when I pay by card online. That's quite legal though because they also charge £1 per ticket however I pay, even if I go down to the box office and pay with cash in person.

Hoenir

Grumpy_chap said:

eskbanker said:

Worth doing for unavoidable charges (e.g. ticket agency booking/service fees) but less so for optional ones such as restaurant service charges IMHO....

I'd certainly agree.
We recently booked ticket to see Human League.
Ticket price £65 each
Plus "booking fee" £9.10 each
Plus "venue restoration fee" £1 each (whatever that is)
Plus "transaction fee" £1.50 per order for actually paying

Really, the price should be the price and all these components included at the first line.

TBH - I am not really sure how a 1980's has-been group can get away with charging even the top-line price, let alone once all the compulsory add-ons are added.

If people didn't buy the tickets they wouldn't. No shortage of decent live music at a reasonable price. Rarely pay over £30 for a ticket. Normally nearer £20. 

NFH

RefluentBeans said:

NFH said:

RefluentBeans said:

NFH said:

NFH said:

Even if an automatically-added percentage is purportedly optional or discretionary, restaurants automatically add it to the bill without first seeking diners' consent. This coerces many diners into paying it because they feel socially awkward asking for it to be removed from the bill, particularly if they are dining in a group of friends or colleagues, and many restaurants impede its removal, for example by taking away the bill to reprint it or by restricting the most convenient payment method to payments that include the additional percentage. Therefore when a percentage is automatically added to the bill without the consumer's express consent whereby the consumer did not opt in, it is arguably not genuinely optional or discretionary.

RefluentBeans said:

It’s also fairly easy to remove the discretionary service charge. People should be checking their receipt before they pay.

I don't understand your response. I explained why it's difficult to remove, and you responded by saying it's fairly easy to remove without explaining how.

Any data to support that? The discretionary charge is just that! I think it’s fairly easy to ask to remove the discretionary charge. Like I said if people checked the bill and saw that the restaurant put an additional main on there people wouldn’t just pay that? So why is a discretionary charge any different? 

Data? What kind of data? I've already cited some example scenarios.

What happens where a group of friends or colleagues are dining, where the bill is being split equally, but one diner doesn't want to pay the so-called service charge? It's socially awkward and mathematically awkward to remove it for individual diners. In this scenario, it is not genuinely optional or discretionary. The so-called service charge is added without diners' express consent.

Some restaurants allow the bill to be paid online, often by scanning a QR code, entering a table number and using Apple Pay or Google Pay. This can save a lot of time in requesting and paying the bill. However, these restaurants typically don't allow this payment method to be used unless the so-called service charge is paid. An example is Wahaca.

Other restaurants delay diners' departure if they ask to pay without the so-called service charge. Instead of simply taking payment for the total without the service charge, staff take the bill away to reprint it, which can delay diners' departure by several minutes.

Some restaurant staff complain if the diners ask for the so-called service charge to be removed with coercive comments such as it is part of their wage.

In view of all these examples as well as many others, for a so-called service charge to be genuinely optional, diners would need to opt in with their express consent.

Anecdotal and what-aboutisms aren’t data. Data would be seeing if this affects consumers. Your thesis is that ‘consumers are disadvantaged by service charges being applied, and people being too socially awkward to ask for these to be removed’. I’m asking for you to support this with facts and not just ‘what about in this situation’.

I gave you the example of Wahaca, whereby it's not possible to remove the so-called service charge when using the fastest billing and payment method. This is a fact.

RefluentBeans said:

I agree that event charges where there is no option but to pay are unfair as these charges are known by the retailer ahead of time and the consumer has no option but to pay them. But for discretionary charges, the argument you’re making is significantly weaker.

I'm arguing that these so-called service charges are not genuinely discretionary or optional and should therefore fall within scope of the new legislation.

RefluentBeans said:

To clarify, I also dislike tipping culture. It seems to be becoming very popular in places it wouldn’t have been expected to be seen before the pandemic.

I likewise dislike tipping culture, but these so-called service charges are not tips or gratuities, and are not described as such.

RefluentBeans said:

The best thing to do would be to get legalisation passed for these mandatory charges, as this is a far stronger argument. If you don’t, you’re treating both mandatory and discretionary tipping the same which devalues the issue with mandatory charges.

The new legislation passed last year and is expected to commence in April 2025. That ship has already sailed. I'm arguing that the CMA's forthcoming guidance about the legislation should interpret any automatically-added charges as falling within scope.

NFH

Alderbank said:

Grumpy_chap said:

Hmmm - it seems as though that excerpt prohibits this type of charge.
Odd that this type of charge is widespread when buying tickets and nothing we can do about it.

It seems like that because the above is a carefully redacted excerpt cherry picked from another piece of legislation, reg.6 of the 2012 Consumer Rights (Payment Surcharges) Regulations.

When read in full however, as should always be done with legislation, those regs simply say you can't charge a consumer extra just for paying by card.

It's the same existing legislation that I referred to in the 6th post of this thread in response to the first mention of charges for making payment.  I quoted directly from Regulation 6A(1) of the Consumer Rights (Payment Surcharges) Regulations 2012, removing the line breaks. It's not cherry picking.

Alderbank said:

My local theatre charges £1 per ticket when I pay by card online. That's quite legal though because they also charge £1 per ticket however I pay, even if I go down to the box office and pay with cash in person.

That breaches the existing legislation. No fees for payment by card are allowed, and fees for payment by other methods must not exceed the costs borne by the payee for the use of that specific payment instrument.