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DLCA: Gratuities Are Voluntary

Gratuities are voluntary tips and cannot be mandatory, according to acting Licensing and Consumer Affairs Commissioner Devin Carrington.

Many V.I. restaurants impose an automatic gratuity on larger parties, but Carrington says this creates two problems. First, because a gratuity is by definition a voluntary tip for services paid by the patron to the restaurant for services rendered, the patron should not be forced to pay such a charge. In other words, gratuity should not be mandatory but voluntary, according to Carrington. If such a payment is mandatory, it is actually a charge for service rendered and should not be called gratuity, Carrington said in a statement. If the payment is in fact a service charge but is being called gratuity, this constitutes deceptive trade practice in contravention of Title 12A of the Virgin Islands Code, Carrington said.

The Department of Licensing and Consumer Affairs’ rules and regulations require the total selling price of all consumer goods offered for sale be conspicuously displayed to the customer at the point of offering it for sale. Carrington said requiring the consumer to pay a price for an item above and beyond the price advertised without first informing the consumer of the total cost involved is deceptive and against the law. He said it is just as deceptive when a mandatory service charge is called a gratuity.
Carrington said such restaurants are advised to conspicuously display for the customer, in a plain and visible manner prior to sale, the full cost of any given item to include service charges. He also said automatic service charges should be reasonable and should be reserved for large groups of customers.

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