Responding to inquiries about the legality of automatic gratuity charges, New York State’s Division of Consumer Protection confirmed that restaurants in the state are permitted to add such fees to bills.
Some have questioned the legality of a 15% automatic tip added to restaruantgoers bills for a party of two.
The Division emphasized that while there is no state law prohibiting the addition of gratuity, restaurants are required to provide clear and conspicuous advance notice of any automatic gratuity charges.
Failure to do so may lead to a claim under New York State’s Deceptive Acts & Practices law, as outlined in General Business Law §349.
In cases where consumers feel that they have not been properly informed about an automatic gratuity, the Division of Consumer Protection offers mediation services.
This initiative aims to resolve complaints between consumers and businesses. Consumers can access the Consumer Assistance Helpline or file complaints online. The Division’s statement underlines the importance of transparency in billing practices and offers a recourse for consumers who may feel aggrieved by undisclosed charges on their restaurant bills.
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