A recent Facebook post (now deleted) went viral over the weekend (Oct 1). The post concerned a man sharing his experience asking restaurants to remove the 10% service charge from his bill for the past month. It stirred quite a lot of controversy and reignited old arguments about the efficacy of the dreaded "++" on the bill. Should it be mandatory? Abolished? Voluntary? BK asks local entrepreneurs, customers, industry insiders, and a legal expert for their point of view on the 10% service charge.
We used to have service charges, but now we don’t. I think, if we are not a fine-dining restaurant, we shouldn’t have a service charge. In my opinion, hotels and fine-dining restaurants are acceptable because they are full-service. I pay my staff starting at B15,000 per month based on experience and performance, and there is a yearly performance evaluation for a pay raise. They also get other kinds of benefits like bonuses, incentives, and other rewards, and the tips from customers get divided equally. I think if you rely only on service charges, sometimes the staff can feel discouraged during the low season.
I am in agreement with the service charge as industry standard for restaurants in Thailand. Our salary base is higher than a lot of places, and the staff get 60% from the 10% service charge. The other 40% go into other kinds of benefits, like staff outings, birthday parties, and spending for the well-being of the staff. At the end of the day, customers look badly at restaurants when we don’t give 100% of service charge to the staff, but that money can cover other kinds of benefits, too. On top of what’s mentioned, we also have benefits, like extra hours, rewards for being on time, or even staff home improvements. If a restaurant is dishonest about their policies, then the staff won’t stick with them because right now we need more professionals in this industry. It’s so hard to find staff these days. If anyone in this industry is underpaid, they’re welcome to come apply for a job with us.
Whether you see it or not, that 10% service charge is going to be there, and if more and more people start refusing to pay the add-on 10% service charge when the bill comes, eventually, venues will just include it with the prices on the menu. At Find The Locker Room, we include the 7% VAT and 10% service charge with our prices on the menu already. I think this way is good because it’s easier for customers to split bills among themselves and they know exactly how much they’re spending. The 10% is important for the service industry people. It’s like an incentive thing for them. When they service the customers, they can try and sell more to get more money. Say, if their salary is B25,000 net, they know they’re going to get that money anyway so it could give a kind of mindset that why try harder. So, this service charge, in a way, is actually helping make the service better. I would also like to mention that at Find The Locker Room the staff get 100% of the 10% service charge.
As a customer, while I do understand that customers receive a service and that staff do not have enough benefits and rely on service charges, I think the service charge should be a choice. Customers should get to decide how they feel about the overall service and pay accordingly. Perhaps if the service charges in Thailand are similar to the tipping system in the US where there's different percentages, that could be a good compromise for both parties.
I don’t think service charges should be a customer’s responsibility because when something is mandatory, that should also come with some kind of standard. What kind of standards? What makes it worth it for us to pay the extra 10%? Who came up with these standards? Where does the 10% actually go? Who gets it? Personally, I would prefer tipping where I have the option to choose, or the restaurants could even provide us with 3-5-7-10% for us to choose when the bill arrives. Another option is they could just make the prices shown on the menu net. I don’t want to see the price that says B400, and then I actually have to pay B500. If you have B100, you can decide whether you can eat here with your B100 or not. I agree with the net pricing format. As a customer, we don’t want to calculate. The friends I eat and drink with are the same. And if the service is good, we will be more than happy to tip on top. A lot of times, we also tip on top of the service charge.
Unlike the 7% VAT clearly stated by law that businesses must pay, there are actually no laws saying restaurants and bars are allowed to charge the 10% for service. At the same time, there are no laws that say businesses are not allowed. So, basically, the situation in Thailand is a free market with a loophole where businesses can decide how much they’d like to charge for their food/drinks/services with no price cap. Though the Office of The Consumer Protection Board states that businesses must state clearly their prices and customers have to be clear about whether or not they are willing to pay from the start. It’s not like you go, see the added on percentage, have your meal—and when the bill comes you refuse to pay the clearly stated extra charges. Here the customer is in the wrong. It’s the same as when businesses are ambiguous with their prices. Then they are then in the wrong. In summary, both parties must be very clear about their prices from the start, and both have equal rights to decide what’s next.