Cafes and restaurants are facing criticism for automatically adding service charges to customers’ bills as cash payments decline and staff receive fewer tips. The rise in contactless card payments has been cited as a reason for this trend, with hospitality expert Steve Hesketh highlighting the decline in casual tips due to the use of card machines. Some customers have been surprised to find service charges as high as 12.5% added to their bills.
The decline in cash payments and the increasing use of card payments has led to a decrease in the amount of tips received by staff in the hospitality industry. This has prompted cafes, restaurants, and food delivery services to impose service charges on card-paying customers. The extra amount added to bills has raised concerns among customers who feel that they are being unfairly charged.
One example of this is The Breakfast Club, a greasy spoon-themed chain, and coffee bars like grind and Lavazza, which have been known to add service charges to customers sitting in with a cup of coffee. Independent chains have also been accused of including the charge on takeaway drinks. For instance, The Art Cafe in Oxford received backlash after adding 53p to a customer’s £3.50 latte. Some customers feel compelled to pay the tip when it appears on their phone, even if they don’t agree with it.
In 2020, food delivery service Deliveroo faced calls for a boycott after announcing plans to add a service charge to orders made through its app. This move was met with criticism from customers who felt that they were being charged extra for a service that was previously free.
The shift towards cashless payments has undoubtedly changed the dynamics of tipping in the hospitality industry. While some argue that service charges are necessary to ensure fair compensation for staff, others believe that tipping should be left to the discretion of customers. The inclusion of service charges on bills can lead to misunderstandings and dissatisfaction among customers who may feel that they are being forced to pay a tip.
As the use of card payments continues to increase, it is important for businesses in the hospitality industry to find a balance that considers both the needs of their staff and the preferences of their customers. Clear communication about the inclusion of service charges and providing customers with the option to opt-out can help alleviate any potential issues.
In conclusion, the decline in cash payments and the rise of card payments have led cafes, restaurants, and food delivery services to automatically add service charges to customers’ bills. While this trend aims to ensure fair compensation for staff, it has raised concerns among customers who feel that they are being unfairly charged. Balancing the needs of staff and customers is crucial for businesses in the hospitality industry to maintain customer satisfaction in an increasingly cashless society..