Nola Smokehouse and Bar slammed over discretionary 10 per cent tip after saying it is mandatory

By William On May 11, 2023

A restaurant has sparked outrage after adding a ‘discretionary’ service charge to the bill – with customers criticizing the eatery for being ‘too American’.

Nola Smokehouse and Bar have angered customers by asking for the tip, with many berating them for not understanding Australian customs.

The tip is listed as ‘discretionary’ on the Sydney eatery’s menu, but a recent reply to an irate customer suggests otherwise.

The restaurant replied to a recent review claiming the charge is “mandatory” and “standard practice” in the industry.

There is no mandatory tipping in Australia, voluntary tipping is also an uncommon practice. Australia’s consumer watchdog, ACCC, told FEMAIL that companies should not mislead consumers about the price of goods or services.

This includes any unavoidable or pre-selected additional costs that may apply to the transaction.

Speaking to Daily Mail Australia, a spokesperson for Nola said the charges are not mandatory and customers can ask for them to be removed at any time.

A Sydney restaurant has sparked anger after adding a 10 per cent discretionary service charge to the bill – with customers criticizing the eatery for being ‘too American’

They added that the response to a Google review was a “mistake” and that discretionary fees were added during the Covid-19 pandemic to “reward hard-working staff.”

The Australian Competition and Consumer Commission (ACCC) advises restaurants struggling with higher costs to raise prices instead of adding surcharges instead.

The furore started when a customer posted a review on Google claiming that the food they liked was good, but they were disappointed with the service charge.

Nola Smokehouse and Bar, in the city’s Barangaroo neighborhood, charges customers an extra 10 percent on their bill. Although the tip is listed as ‘discretionary’, in response to a recent review the restaurant claimed that the charge is ‘mandatory’ and ‘standard practice’ in the industry, drawing anger from many customers who say it is not the norm in Australia

The restaurant then responded saying they “understand the concern” regarding the fee.

‘The gratuity is a mandatory charge that is added to the bill as a way of compensating the hard-working staff who provide excellent service during your visit.

“This compensation is standard practice in the hospitality industry and is often used to ensure that all staff receive fair compensation for their work,” the restaurant spokesperson wrote.

The answer was later shared to Reddit, where many Sydney siders shared their dismay

Can restaurants in Australia legally enforce tipping?

Restaurants in Australia cannot force customers to pay a tip for service, but there is no rule that prohibits establishments from asking for it.

There are also no rules for how companies distribute tips. Some collect them all and divide it evenly among the staff, while others let individual servers keep their own tips.

A spokesman for the Australian Competition and Consumer Commission (ACCC) told FEMAIL: ‘Under Australian consumer law, businesses must not mislead consumers about the price of any goods or services, including any unavoidable or pre-selected additional charges that may apply to the transaction. .’

‘Cafés and restaurants can charge a surcharge on certain days and they do not have to pass on that surcharge in the total price displayed for their products, because they are subject to a statutory exemption.

“However, if they charge such a supplement, they should put these words on the menu:”A surcharge of [percentage] applies on [day or days]. These words should be at least as prominent as the most prominent price on the menu.”

“If the menu does not list prices, the information about the surcharge should be displayed in another prominent way.

“However, like any other business, cafes and restaurants must consider the overall impression consumers get from the representations they make. They should aim to provide clarity and accuracy to the consumer up front.

“If cafes and restaurants are faced with higher costs, they should consider raising their prices rather than adding surcharges, in order to inform consumers more accurately about the amount they have to pay.

“Consumers concerned about the addition of undisclosed or underdisclosed charges may raise the issue directly with the company and also file a complaint with their local fair trade or consumer affairs office.”

“While we understand that some guests prefer to tip individually as a token of appreciation, we’ve found that tipping is a fairer way to distribute tips among all employees.

“It also helps to ensure that our staff are motivated to provide the highest level of service to all guests, whether they are individually tipped or not.”

The response was later shared on Reddit, where many Australians shared their dismay.

“Can’t we start rejecting this retarded logic and obvious gouging? I thought about going to this restaurant but saw the fine print about a 10 percent “discretionary” tip.

“When I checked their Google reviews, someone mentioned it and the venue responded by saying it is MANDATORY and ‘used to ensure all staff are paid fairly for their work,’ one person wrote.

“Isn’t it the job of employers to make sure their employees are paid fairly for their work?” asked another.

“No, they can fucking get. We are not America and this is just a way for them to pay their staff less,” said another.

“We should just ban the solicitation of tips across Australia,” said another.

Speaking to Daily Mail Australia, a spokesperson for Nola said: ‘Unfortunately, in response to a recent review, the team has incorrectly advised that they charge their guests a mandatory 10 per cent tip.

“The word required was incorrect, and as communicated on their website and in the restaurant, this is a discretionary surcharge that has been added during the COVID period and ongoing economic climate to reward their hard working employees who continue to provide a high level of quality service to their guests.

‘1.5 percent of the tip costs are credit card costs, the rest is all passed on to the staff. Customers can have it removed from their account at any time’.