It is in the best interest of merchants to treat their regular customers like kings, and to exploit their one-time, pass through customers as much as possible.
The only thing that can counter this shameless ripping off of single-visit customers is reputation networks (witness the fact that Israelis seem to all flock to the same places, as per friend's recommendations), and to a lesser extent, guide-books. Busineses are very hesitant to ruin the goldmine that is a positive review in the Lonely Planet, and so will generally treat people very well, lest they write off a nasty email to the guidebook's publishers.
One clear example of this is in the supermarket loyalty cards used in the US. The card is simple to get (taking all of 2 minutes), however, without one, a customer will often pay 2-3x for a gallon of milk, etc. The supermarket's goal is to shamelessly rip off walk-in customers who have no prior relationship with the store.
And so, the same thing, albeit to a lesser extent, happens in India.
Aloo Ghobi (potato and cauliflower) is one of the most popular dishes amongst tourists in India. The ingredients are dirt cheap, and it appears often enough on "Indian" restaurant menus at home that tourists feel comfortable ordering it - as they know ahead of time what they'll be getting.
In several restaurants here, I've seen Aloo Ghobi for 60-100 rupees (up to 2 dollars), which is easily 3 times the cost of any other vegetable dish. How can one explain this staggering difference?
My guess is that there are a fair number of customers who walk into a restaurant, sit down, and order an aloo ghobi without even looking at the menu (this being the only dish they know the name of). This happens often enough that the restaurant owner realizes he can charge an obscene price for this item, knowing that the majority of the people ordering it will be doing so blindly.
And so, bringing this back to the topic at hand: A cup of tea.
Chai shops are everywhere here, on practically every street corner - with a decent sized crowd of old indian men huddling over a cup of chai to keep them warm.
However, one thing you quickly realize, is that Indians never seem to order full cups of chai. They always order a half chai, which not surprisingly, is half the price of a full glass. Quite often, this will be poured into a saucer (cooling it down faster), which is then sipped/slurped on.
I'm not sure if it's because they're poor, or because half a glass satisfies one's urge for tea.. For me, it is the latter for sure.
However, there are a few strange quirks to consider. Any foreign tourist who walks up to a chai stall will order "chai", and thus pay twice as much as a local (admittedly, getting twice as much chai). And thus, we have something akin to the supermarket example above, where the regular clients know exactly what to order, whereas the foreigner off the street pays a penalty for his ignorance.
There is one important take-home lesson this week: Always order half a chai, even if you want a full chai.
For sure, as a foreigner, the Indian selling you the chai will go out of his way to be nice to you. Even moreso, the more remote/out of the tourist-zone his chai shop is. The fact is that he'll be pretty shocked by the fact that you're having a cup of chai at his shop, it'll be providing a fair amount of amusement for his regular customers (as they get to stare, laugh, and ask you questions), and so he will reward you with kindness.
When you order half a chai, you leave half of the cup available to charity/goodwill. More often than not, they will give you 3/4 or more of a cup, simply because they're being nice.
However, when you pay for the full cup, there is no way for them to help you out. The cup is filled to the top with paid-chai, and if they try to show your kindness by giving you more, will scald your poor fingers as the glass overflows.
Thus, order the half-cup.
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