Hi, I am staying at a resort in Flores. They are charging a 10% tax plus an 11% service charge. My question is Is the 11% service charge legal? I am receiving conflicting advice. Should I have the right to ‘tip’ based on the quality of the service I receive, and be able to determine the amount myself. I live in Pererenan, and this is the first time in some years I have stayed at a resort frequented by tourists. It’s quite an eye opener. The charges for massage 800 rupiah for 90 minutes, and it is nothing special,, boat trips to Komodo...5 million rupiah for 5 hours etc are mind boggling. To then be charged 21% on top looks like robbery to me. Granted the 10% tax is a requirement Is it correct that employees are paid 5% of a businesses gross, and that the service charge is unenforceable, but has grown out of the employee payment requirement, and has been rounded up as a way to increase company profits? Is this a blatant rip off of tourists who come to Bali and stay in these resorts. The German manager of this resort was curt when I queried his right to mandate the charge, I have now advised I need him to provide proof of his right to charge guests this amount. He has undertaken to get further advice and respond. This is a chain hotel resort, who are in a secluded area, meaning there are no other businesses around who can provide competitive services, and keep this business honest Can anybody provide information as to what are my rights. Thank you in advance
Hi, I am staying at a resort in Flores. They are charging a 10%...
Absolutely normal. Actually, to be technical although the numbers are the same, you are charged for the amount & 10% tax. On top of that total you are charged 10%. But the calculations end up being the same as 21%. This is why I don't like to eat at restaurants that are part of hotels. The end bill can be a bit of a surprise. The 10% service charge is divided by workers and is not kept by management.
Thanks Dana, my question relates to law... it seems from the information, it is practice, not law, and is therefore unenforceable...I have the right to determine the ‘tip’, is what I am being advised across this and two other blogs
Because it's writen on the menu, at the moment you order you agree,
In Indonesia you pay, or find another restaurant.
exactly. This was my other point. If it's on the website where the hotel was booked then the act of booking the room is the same as agreeing to pay it.... (Having waitressed in the US, I always tip minimum 10% anyway.)
TripAdvisor has an Indonesian page. It states the service charge is legally unenforceable
Because something is written on a menu does not make a service charge legally enforceable, if there is no law giving the establishment the right to do so. It is in fact an act to circumvent law... a customer has the right to pay a tip or service amount based on his definition monetarily of the quality of the service....as it should be.
peter8966 no, a menu or a well-placed board visible to all customers indicating that on all price service charge and tax apply above all prices are contractual and every business owner has the right here to display the price how he wants. I could add a 200k IDR "whatever fee" if I want. if it's clearly mentioned on the menu and you order you agree so it's enforceable. As our Balinese friends say so often, it's our land our rules, if not happy with this...
it's not because whe are used a other way that we have to change them, that is call adaptation
So by your argument Marcel...if you provide bad service...you still have a right to charge a full service fee.. consumer rights be damned???
it the states you have to tip for example
It is unenforceable Marcel, and because it is industry practice...doesn’t make it legislated into law.. it is a consumers right to determine any additional payment made as a result of his or her experience the level of goods or services provided. Please quote the law allowing the provided to add the service charge fee. I think you will find it doesn’t exist
Normally you would include the service costs in the meal price but Indonesian businesses tend to show this as a separate price on the billing so in effect it is probably legal as either way, you are going to be paying for service even is shown or otherwise included in the final prices. I've only seen one chain of business in Jakarta run by the folks that own Eastern Promise to be the only business to actually show the final price in the menu, ie, service and tax already include. This is very rare here. I also consider that if a restaurant or bar charges a service fee on the bill, I decline to pay any tips.
That is false advertising. It says no tax and service charge but clearly shows this already added to the prices. Clearly they lack the ability to know the difference?
I can see that but stating NO TAX AND SERVICE CHARGE at the top is incorrect. What it should say is, TAX AND SERVICES INCLUDED IN THE PRICE. The difference is in the detail.?
, read it again as it contradicts itself.?
Nope. Just from Jakarta. Why?
Yup. Normal in Indonesia. Places in Jakarta also often clarify this on the bill.
Yes Martin, I am questioning the legality, and being advised across another blog that it is practice, but not a legal requirement
Check the booking page of the website. If it states this clearly on the website, as most do, you won't have a leg to stand on.
Not according to Tripadvisors advice on hotels rights to charge this....they are very clear on my rights to refuse
Cannot refuse.. It's comoulsory as written in the menu, all the service charge money goes to the staff so why is this an issue, the business has the decision to charge but must be 5 % minimum
olivier34 tripadvisors advice is clear. Just checking, are you in the hospitality industry? The 5% to be paid monthly to staff is ‘ to be calculated from the company’s gross’. Without someone on this page clearly stating the law, chapter and verse, I put it to you that this industry practice is unenforceable, and has been created by business as a way to ‘ pass off’ their legal requirements to their staff from them to their customers, Service is something the customer has a right to put a price on....
peter8966... trip advisor doesn't give advise nor does it write the law. People write reviews and opinions on TA. The service charge is a law enforced by manpower. And yes, I'm in hospitality business.
Not correct....TripAdvisor DOES have a section where it advises consumer rights
Peter, if you know it all and we don't, why seeking advise? Go ahead, refuse to pay, sue them and ruin the rest of your holiday.
I do not think Trip Advisor can be considered a legal expert in matters such as this. Please stand by as I am in the hospitality industry and have consulted two lawyers whom will answer me today.
Hi peter8966 I agree with you that this is not the right way to do business. My best advice is that you avoid hotels, restaurants etc. which do not include both Tax and service charges in their pricing.
Trip Advisor can not be a legal source
Hi Tom, no one has been able to provide any legislation allowing businesses in Indonesia to levy a service charge. One would think for all the grandstanding it would been supplied by now, to shoot my position down... I put it to you...it doesn’t exist
The 10% government tax plus the 11% service is heavily monitored by the Government. Inclusive in price or not, it must be paid. Government is now connecting your POS to their systems. Pay up or shut up. Abide by these country laws and regulations
What rubbish Tom...you have no idea who I am...or my belief system...you just attempted to act in a very ignorant manner...please refrain
jonathan5 even if you avoid hotels etc that "do not include taxes and service in their pricing" you are a.) either paying it and it is included already in the price or b.) the business is illegal and therefore does not pay taxes to the government nor their staff the legally required service....
I do have Tom, whilst the 10% tax is legislated, no one, despite my many requests can provide any reference to the legislation RE the service charge. Can you? I put it to you, until proven differently, it doesn’t exist
You could complain on Trip Advisor
The lower taxes in the Philippines and the virgin beaches did not come to many
5 million rupees five hours too long
Chalk the 11% up to a learning experience and remember next time you go to a hotel. Not worth your time to examine the legality of this.
You pay this every time, it just depends on what the hotel write on the menu or charge sheet.
And i do not know how they can charge a 5 hours trip to Komodo 5 millions, a day dive trip is less than 100euros?
It's a 10%+ taxes (hence 11%) and you cannot refuse to pay. It goes to the staff after a deductible for loss and breakage (normally 2%) that it's redistributed at the end of the year if unused or partially used to replace broken or lost items. The service charge percentage is variable and it's normally negotiated with representative of the staff every few years. You are required to pay for it by law. If you can't afford to pay for it, choose different establishments... In Labuan Bajo if you can't afford to charter a boat, you can use one of the many other options, which are way cheaper.
That’s the correct answer.
Better go to places that advertise as already inclusive
Theres nothing special about Komodo except some fat lizards. The rest looks the same as anywhere east of Bali
The statement is so funny
Well they are fat lizards. Overfed for safety They only get excited when a menstruating woman turns up:))
They can smell it over a mile off