Mandatory Tips are Illegal and Consumers Can Claim Money Back Clarifies ACODECO
ACODECO, Panama’s Better Business Bureau reiterated that tips in restaurants and stores are voluntary. Consumers can recover their money if they report being charged with a tax receipt.
The Consumer Protection and Competition Authority (ACODECO) reiterated that tips in restaurants and shops are completely voluntary and warned that consumers affected by mandatory or irregular charges can recover their money through a formal complaint. The entity’s administrator, Ramón Abadi Balid, explained that many people do not report these cases because they consider them to be small amounts, generally between 2 and 3 dollars or percentages automatically added to the account. However, he emphasized that no establishment is authorized to demand tips from customers.
ACODECO indicated that consumers who have been affected by these types of practices can request a refund by presenting the tax invoice and filing a formal complaint with the institution. Furthermore, he reminded businesses that fail to comply with consumer protection regulations may face financial penalties. The entity indicated that this provision is contemplated in Law 45 of 2007, subsequently modified by Law 34 of 2016, which establish mechanisms to protect consumers against improper charges.
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