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

A restaurant has caused fury after adding a ‘discretionary’ service charge to its bill – with customers slamming the eatery for being ‘too American’.

Nola Smokehouse and Bar have angered customers by asking for the tip with many slamming them for failing to understand Australian customs.

The tip is listed as ‘discretionary’ on the Sydney eatery’s menu however a recent reply to a furious 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. The Australian Consumer watchdog, ACCC, told FEMAIL businesses should not mislead consumers on the price of good or services.

This includes any unavoidable or pre-selected additional charges that might apply to the transaction.

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

A Sydney restaurant has caused fury after adding a discretionary 10 per cent service charge to its bill – with customers slamming the eatery for being ‘too American’

They added that the response to a Google review was a ‘mistake’ and the discretionary charge was added during the Covid-19 pandemic to ‘reward hard-working staff’.

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

The furore started when a customer posted a review to Google, claiming the food they enjoyed was good, but they were disappointed at the service charge.

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

The restaurant then responded, saying they ‘understand the concern’ regarding the fee.

‘The gratuity fee is a mandatory charge that is added to the bill as a way to compensate the hardworking staff who provide excellent service during your visit.

‘This fee is a standard practice in the hospitality industry and is often used to ensure that all staff members are fairly compensated for their work,’ the restaurant spokesperson wrote.

The response was later shared to Reddit where many Sydney-siders shared their upset

Can restaurants legally enforce tips in Australia?

Restaurants in Australia cannot force customers to pay a tip on service, but there is no rule against establishments requesting one.

There are also no rules on how businesses distribute tips. Some will collect them all and distribute it evenly among staff, while others will let individual servers keep their own tips.

A spokesperson from the Australian Competition and Consumer Commission (ACCC) told FEMAIL: ‘Under the Australian Consumer Law, businesses should not mislead consumers on the price of good or services, including any unavoidable or pre-selected additional charges that might apply to the transaction.’

‘Cafes and restaurants are able to charge a surcharge that is specified on particular days and they don’t need to include this charge in the total price displayed for their products, as an exemption under the law applies to them.

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

‘Alternatively, if the menu does not list prices, the information about the surcharge must be displayed in some other prominent way.

‘Like any other business however, cafes and restaurants should consider the overall impression given to consumers by the representations they make. They should strive to give consumers clarity and accuracy up front.

‘If cafes and restaurants face increased costs, they should consider raising their prices rather than adding surcharges, to more accurately inform consumers of the amount they will need to pay.

‘Consumers that have concerns about the addition of undisclosed or inadequately disclosed charges can raise the issue directly with the business and also lodge a complaint with their local fair trading or consumer affairs agency.’

‘While we understand that some guests may prefer to tip individually as a show of appreciation, we have found that the gratuity fee provides a more equitable way of distributing tips among all staff members.

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

The response was later shared to Reddit where many Australians shared their upset.

‘Can we not start rejecting this backwards logic and obvious gouging? I was thinking of going to this restaurant but saw the fine print about a ‘discretionary’ 10 per cent gratuity.

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

‘Isn’t it the employers job to ensure their employees are fairly compensated for their work?’ asked another.

‘Nah they can get f******. We’re not America and this is just a way for them to pay their staff less,’ said another.

‘We should just straight up ban the request for tipping across Australia,’ said another.

Speaking to Daily Mail Australia, a Nola spokespersons said: ‘Unfortunately, in response to one recent review, the team mistakenly advised that they charge a mandatory 10 per cent gratuity fee to their guests.

‘The word mandatory was incorrect, and as communicated across their website and in the restaurant, this is a discretionary charge that was added during the COVID period and continued economic climate, in order to reward their hard-working staff who continue to provide a high quality service to their guests.

‘1.5 per cent of the gratuity charge covers credit card fees, with the rest all passed onto staff. Customers can have it removed from their bill at any time’.

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Read more at DailyMail.co.uk