Ginsoy's ridiculous service charge and social media's wonders

There's a big difference between tipping and service charges, though restaurants would have you believe otherwise.

A new controversy broke around a few days ago when one of the upscale restaurants of Karachi decided to charge an additional 10% service charge over the bill for pre-reservation customers. The charge didn’t apply to walk-ins. 

The restaurant I am referring to, Ginsoy, is located at Khayban-e-Shahbaz and despite not being too old, caters to number of reservations on a daily basis. The food quality is very good.

This 10% service charge was a practice in pure customer exploitation as never before had I heard of a restaurant charging additionally for making prior reservations. Yes, there are some that charge an advance that is deducted from your final bill, but not an additional charge for reserving!

It didn’t take long for this to hit the social media and the restaurant started getting heat from its regular customers on different forums. This is how the management responded to one of posts on a Facebook page:

We value our customers and the policy is not to turn them away but to enhance the dining experience of our customers. And again, we have to make special arrangements for reservations and let the tables sit idle so that they can be accommodated at the given time while walk-ins wait to be seated. Hence, the 10% service charge on reservations.

Please, the 10% on service will not buy us any gold, and to further clarify this 'service charge' goes to the servers NOT the restaurant.

Here, I would like to differentiate between service charge and tip, so as to put the comments in perspective. Service charge is an additional amount charged by the restaurant and is the sole property of the employer and can be distributed amongst employees or kept as deemed fit. A tip, on the other hand, is the sole property of the employee or the server and is often used by the customer as a method to reward or punish the services received.

There is a fundamental difference between the two, though restaurants would have you believe otherwise. Many a times the motivation behind levying this additional charge is not to protect the employee but to make extra income. The employee usually loses out with the added step.

Furthermore, once the customers see that a service charge has been put into the final bill, they are not willing to tip the servers as they think that the service charge will be paid to them, but usually only half the amount reaches them.

This brings me to the question of tipping. Should one tip the server, and if so, how much?

The pay scale in service industry is usually modest and the servers are dependent on tips to make a decent living (read: making ends meet). To this end, they try to provide excellent customer service to the patrons. If the service is good, you should tip. Tipping also ensures that you receive the same or better service the next time you visit the place.

The amount of tips varies from service to service and between regions, but anywhere between 10-20% of the bill is the norm. For our region, usually people add 10% on top of the bill for normal services and extra for exceptional. So if the total bill is, say, Rs3,000, it is a good practice to leave Rs300 as the tip. However, as it came up during the social media discussion, there are people who just leave the remaining change as the tip. That may work for a party of two but, if there were six to eight people at the party and you leave Rs100 as the tip, then it is unfair to the servers.

This, if their version is to be believed, was the motivation behind the service charges levied by Ginsoy management.

Many were disgruntled by this service charge because they wanted to keep the amount they tip in their own hand and use it to reward (or punish) the services offered as they saw fit, and took to social media to record their protests.

Apparently, it has worked; the restaurant management had a change of heart. They have abolished the service charge system completely and have returned to the customers their right to tip as they please.

Kudos to the management of Ginsoy who, unlike some other places, is willing to take the opinions of its valued customers into account while making business decisions.

The take-home message from this whole episode is that you shouldn’t be stringy and tip the servers a decent amount. For those who cannot decide how much to tip, that iPhone or Android that you keep can be very handy, because now many tip calculators are available at their app stores for free.

Oh, by the way, the same tipping etiquette applies when you order delivery and someone brings you food at your house, in case you thought you could be spared this ethical liability.

Read more by Amyn here, or follow him on Twitter @amynmalik