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What Is a Service Charge?

A service charge is any additional fee that is tacked on to an existing bill. In this service oriented society, one will definitely encounter service charges for practically anything. There is a lot of talk going on about the definition and appropriateness of a service charge, but in general, a service charge is something that a customer has to pay in addition to the basic fee that he has already paid for.

Perhaps the kind of service charge that is encountered most often is the service charge used by restaurants and other dining establishments. The common notion is that this service charge is meant for the waiter and other serving staff and that this takes the place of the tip. While the service charge is indeed meant for the waiting staff, having the amount on the bill means that the owner can do with it as he wishes - and not necessarily give the amount to the staff.

Another commonly encountered example of a service charge is when one makes purchases online. The Internet has made booking airplane tickets, concert tickets, and the like so much easier. If you take a closer look, though, you will notice that there is probably a service charge tacked on to the total bill.

Service charges aren’t always labeled as such. There are a lot of other terms that are used depending on the context. For airlines, you might see something like Web Administration Free. For hotel web sites, you may see something like Booking Fee.

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