7

I've seen this happen in such a huge number of places I've dined at and it's a bit hilarious - "a 12.5% discretionary service fee has been added to your tab.". I don't mind and always tip 5-20% as I find that it's appreciated and I'm American so I came accustomed to it and enjoy doing it even more when it's not expected, but that's all besides the point of the bizarre and ironic widespread word choice. enter image description here

  • 5
    Maybe it's called discretionary because it is at your discretion whether you want to pay it or not? At least that's what tripadvisor.com/… is suggesting (which comes up after 10 seconds of googling). And sorry for the -1 but it would be nice if you showed some research effort, and said why your question isn't answered by what comes up in an online search. – martin.koeberl Nov 15 '17 at 1:49
  • It's not a "gratuity" if it's not gratuitous! – WGroleau Nov 15 '17 at 13:58
  • What in the world is Pink Alaska ? I know of only snow white Alaska. – DumbCoder Nov 15 '17 at 14:34
  • Sushi with cream cheese and salmon – J. Doe Nov 15 '17 at 19:58
12

Tax law. If it's discretionary, it is a tip, then the staff may be responsible for paying income tax or National Insurance (a.k.a Social Security in the US) themselves. If it is a compulsory fee, then it is a wage and the restaurant is responsible for taxes. By stating the fee is optional, the restaurant relieves itself of having to handle these taxes.

This differs from the United States where the law is that if it shows up on the bill, it's not a tip and subject to withholding. Therefore, in the US there is no incentive to point out which charges are optional (as the large party service charge often is).

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    So is it in fact, from the customer's perspective, optional? – J. Doe Nov 15 '17 at 4:07
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    @J.Doe If it wasn't the restaurant would be in violation of unfair trading laws on price disclosure, as well as committing tax evasion. – user71659 Nov 15 '17 at 4:42
  • This answer is an answer to 'why are tips discretionary in UK restaurants', but that's not what was asked. – AakashM Nov 15 '17 at 8:47
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    @AakashM This absolutely does answer the question. As I understand it, the asker is wondering why something which is claimed to be "optional" is automatically added to their bill. The answer is that by treating this component as optional, the restaurant can avoid being responsible for tax on that component. The question wasn't "why are tips optional", which is a tautology. – MJeffryes Nov 15 '17 at 12:23
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    "Optional" would definitely mean that. – DJClayworth Nov 15 '17 at 17:17
5

In addition to possibly being of some administrative benefit as user71659 has suggested, these service charges are also a way that restaurants use to confuse customers into paying more than they otherwise would. In the past, it was common and expected in the UK for restaurants to add a service charge to the bill for large parties (usually parties over 6). However, recently, some restaurants started adding "optional" service charges to tables of any size.

The restaurants hope that customers will not notice the extra charge, and might tip in addition to the charge. Contrary to expectation, the service charge may not fully go to the service staff. In some cases, the entire fee may just go back to the restaurant. This practice came under scrutiny last year, and there was some suggestion that it might be banned, but this hasn't gone anywhere yet.

  • Okay but suppose that there's a 15% "optional" fee added to my meal for one and I hypothetically only wanted to tip 5% or even nothing at all for lousy service. How would I go about forgoing the "option"? – J. Doe Nov 15 '17 at 13:00
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    @J.Doe Tell them to take it off. If you truly want to tip, you should tell them to remove the whole thing, and leave the tip in cash. – MJeffryes Nov 15 '17 at 13:02
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    Yes, and this is why restaurants do it. They know that awkwardness will inhibit most people from removing the "optional" charge, so they are in practice able to charge more for the meal than the menu states. – MJeffryes Nov 15 '17 at 13:06
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    @J.Doe This is an advantage of paying in cash. If you leave at least the subtotal amount on the receipt above, you can just leave. – user71659 Nov 15 '17 at 16:00
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    @J.Doe "Hi, I would prefer to make my tip in cash so I can be sure it goes to the staff", easy enough. – Calchas Nov 15 '17 at 19:06

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