New CCPC Guidance on Tipping

The CCPC has published new guidance on tipping and service charges. The guidance addresses mandatory and optional service charges, price displays and digital tipping practices. The CCPC also indicates that it will increase enforcement action in this area. Our Food, Agribusiness & Beverage team outlines what businesses need to know.

What you need to know

• The Competition and Consumer Protection Commission (CCPC) has recently published new guidance on tipping and service charges following a survey of over 1,000 consumers
• Mandatory charges must be clearly displayed on menus and at entrances before a customer makes a purchase
• Optional charges can never be added to bills without prior customer consent
• Digital tipping screens should use a simple yes/no format. Standalone tipping terminals must also be clearly labelled and positioned away from payment terminals
• The CCPC has indicated it may take enforcement action against businesses that continue non-compliant practices

The CCPC recently published a report and guidance on tipping and service charges with important implications for businesses in the food and beverage industry. We outline the key takeaways for businesses.

The research

Based on a survey of 1,048 consumers, the CCPC identified potential breaches of consumer protection law related to tipping and service charges. One in five consumers reported experiencing unexpected charges on bills in the past six months. Almost one in ten said they had accidentally tipped on contactless terminals. Two-thirds of the unexpected charges reported occurred in cafés and restaurants.

Legal framework

The main obligations governing pricing and charges include:

• The Consumer Protection Act 2007, as amended by the Consumer Rights Act 2022, prohibits misleading commercial practices including obscuring charges or presenting them ambiguously. The Consumer Protection Act also requires inclusive pricing where consumers can see the full price upfront.
• The Retail Price (Food in Catering Establishments) Display Order 1984 requires food businesses to display prices at the entrance and on menus, with all prices inclusive of taxes and charges.

CCPC guidelines

The CCPC has outlined its expectations for tips and service charges, namely:

1. Mandatory charges, like service charges for large groups, must be displayed prominently on menus and at entrances.
2. Optional charges should not be added to bills without prior consent.
3. VAT must be included in all displayed prices. Adding it as an extra charge at payment is not permitted.

Any ambiguity, obscured charge or “opt-out” model risks being characterised as a misleading practice.

Digital tipping practices

The CCPC’s report goes beyond a focus on pricing compliance and also looks at digital payment interfaces. The CCPC has expressed concern that certain tipping screens may “nudge” consumers into tipping when they did not intend to, or tipping more than intended. While not mandatory, the CCPC strongly recommends:

• Tipping screens should ask "do you want to leave a tip?" with a simple yes/no option
• If showing percentage amounts, the "no tip" or "skip" option must be equally prominent
• Standalone tipping terminals should be clearly labelled and positioned away from payment terminals to avoid accidental taps

This reflects a broader regulatory focus in consumer protection laws on so called “dark patterns”. These are manipulative and deceptive interface designs that steer consumers towards unintended choices.

CCPC enforcement on the horizon?

The CCPC will be engaging with industry, reviewing consumer complaints and following up with enforcement action if non-compliant practices continue.

To ensure compliance with Irish consumer protection law, restaurants, cafés and bars should review pricing displays, bills and payment processes now.

For more information or advice on this new guidance, contact a member of our Food, Agribusiness & Beverage team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.