Thoughts on restaurants requiring deposits?

[DC]

Hey guys,

So, wanted to pitch you guys an idea that's been floating out in the ether for a while about restaurants charging/requiring a deposit to make a reservation. In addition, the idea that a restaurant can charge/keep that deposit if you or your party no-show with zero notice. What are your thoughts?

The restaurant game is harder than most realize and every business/cuisine/building has it's own challenges that are unique to it. Some require more labor than others, more expensive product, are subject to high rent, pay royalties, etc. The bottom line is that there is a ton of liability and profit margins are historically incredibly thin.

That said, restaurants get killed by no-shows. Having a party drop in size is one thing, but to have a party of 10 booked, then have it straight up no-show you is criminal. The labor and product spent getting ready for you is expensive. The server who is out those sales and gratuity is affected. And the shitty thing is that there are potentially DOZENS of other guests who wanted to book that time/table. At least at my place, we are blessed enough to have phone lines that seemingly never stop ringing. However, we don't know that the 600pm party of six is no-showing until we call them at 6:20pm and what are the chances a walk-in comes at that exact time?

I shit you not, we lose, on average, 30-40 covers a day from people who no-show. Now, I get that situations arise and emergencies happen but most people simply don't give a ****. But for parties of 5 or more we always call them 20 minutes after their reservation time. We give them 20 minutes in good weather and 30 minutes in bad weather. 80% of the time the guest will answer and then hang up on us. Jerks. We even have a feature that texts the guest a reminder (this is in addition to a confirm call two days before and an email one day before) with an option to cancel the reservation. They have PLENTY of opportunities to allow us to rebook in a timely fashion.

Some restaurants are beginning to charge a deposit when making the reservation and it is possible to have it done through an online reservation platform. Would you guys flip out if your favorite restaurant required you to give your CC information (an open authorization) with the knowledge that you'd be charged a "loss of revenue" (for lack of a better term) if you no-show without notice? I believe it would be a small fee, a slap on the wrist if you will. A reminder to not waste their fellow man's and local businesses time. Perhaps $50/reservation. Whatever the price is, I would give the server, bar, and general support staff a cut of it as we are all in this together. But my main objective would be to curtail this activity or at least limit it as much as possible.

This kind of thing has caught on a bit in Asian and European culture a bit from my studying of it, but not so much in America...yet. I hate to be the first one in our market to do this and cause a negative reaction. I'd much rather someone else be thrown through the plate glass window, if you will. But it's killing us. Adding up the numbers makes me want to cry.

I don't want to make this post any longer as I think you get the gist of what I'm trying to explain. Let me know your thoughts/reactions. I'd appreciate it. I really started thinking about this idea more during our last shutdown over December. I had guests seeing empty tables on our patio (we were only allowed patio dining) and they couldn't believe it. Knowing how hard it is to get into my place they would ask my skeleton crew and I why they were empty. They couldn't believe people would no-show us and several guests said we should start charging. I thought, hmmm...maybe the tide is beginning to change.

A good article

Another good one, from Ireland

 

[Tater]

Crappy situation for you. Maybe you could make the reservation contingent that they show up on time (or early), or it's first come, first served?
If there is a wait for tables, they could instantly be filled.

 

[DC]

Crappy situation for you. Maybe you could make the reservation contingent that they show up on time (or early), or it's first come, first served?
If there is a wait for tables, they could instantly be filled.

No wait for tables, no callback lists. Reservations only for 99%. Get a couple at lunch.

 

[MDB111™]

 

[airtime143]

Aside from vacation, the last time I dined in a restaurant was when my lady and I went to see the movie tropic thunder... so my input is probably completely invalid.

But, were I faced with a non refundable deposit I quite honestly would pass.

My reason for doing so would be based on past experiences of making reservations, arriving on time, and still having to wait.
Sometimes the wait was long enough that I left- i make a reservation to save time and if I don't get seated, I will absolutely leave.


In all honesty, even if it included a guarantee that I would be seated on time or my meal would be 50% off, I still think I would pass.

I know it isnt what you are looking for, but that is honestly how I personally would react.

 

[Ares]

OP what we need is like a reverse DoorDash app for restaurants like yours.

Guest makes a reservation, gr8.

But in order to keep it, they need to log on to the app and confirm their intention to use said reservation 30 minutes before, and at that point the app puts a small hold on their card.

App tracks GPS on primary guest, and if they are not en route to your restaurant it alerts you so you can have staff call them.... maybe they're running late, maybe the app is malfunctioning, etc.

If they do not show, they incur a monetary penalty, and you can rate them as a guest, so someone constantly telling you to **** off, maybe you just don't allow them to make reservations any longer.

For good guests that you've previously known to be reliable, you could offer them perks thru the app at your own discretion.... discounts, free drinks, free appetizer, free desert.... and combine it with your changing menu to push certain money maker dishes out of your kitchen.... first one is free, then they order it every time.

I wouldn't personally be offended by what the OP proposes, but I don't know that it would efficiently solve the problem.

 

[ZOMBIE@CTESPN]

Depending on your clientele I would say it’s just part of doing business. I would prob make it a temporary thing assuming your state has a 25% covid capacity. You piss off some @25% cap you won’t even miss that customer. For me I wouldn’t like it. But right now cause of covid it’s the right time to try things that people would normally find unacceptable before. Like sitting outside in a tent in 10 degree weather breathing propane heater fumes would normally be a FU I’m not going there. But now just to get the f out of the house it’s something I would put up with.

 

[Nail Polish]

What happens when you get there at the correct time, and the table isn't ready?

 

[number51]

I'd much rather someone else be thrown through the plate glass window

Monkfish is very good, tastes like Lobster!

 

[Hawkeye OG]

Hmm. An interesting theory. As a consumer, I wouldn't be a fan, but I would totally understand it from the business side. Especially during COVID, when I'm assuming you aren't operating at full capacity. Seating is limited already.

If I'm just taking my wife out for a nice steak dinner somewhere and they wanted a deposit for the two of us, I would pass (although most people around here don't take reservations for small parties). Now if I had a large party of say 6+ people, I would be more understanding and open to it. What do you charge for the deposit though? I think that depends on how fancy of a joint you have. $5 - $10/head seems reasonable though. Can you offer an incentive for the deposit? Say 5% off their bill? I know you said profit margins are slim already so maybe that's not possible. Idk where I'm going with this.

TL;DR: Assuming you have a nice fancy restaurant, white cloth type of joint, I'd be understanding of it for large groups, but probably wouldn't like it.

 

[JimAKABlkhwks918]

Prior to Covid, my wife and I ate out at least once a week...I'd be fine with the deposit idea as long as it was absolutely locked into me receiving a discount if I'm not seated within 15 minutes of my reservation, and as long as there was a reasonable period of cancellation allowed, say 6 hours prior; after that you're locked in, no refund...in the many times I've eaten out, I can't recall any time that I would have lost my deposit under those conditions.

 

[Raskolnikov]

Hey guys,

So, wanted to pitch you guys an idea that's been floating out in the ether for a while about restaurants charging/requiring a deposit to make a reservation. In addition, the idea that a restaurant can charge/keep that deposit if you or your party no-show with zero notice. What are your thoughts?

The restaurant game is harder than most realize and every business/cuisine/building has it's own challenges that are unique to it. Some require more labor than others, more expensive product, are subject to high rent, pay royalties, etc. The bottom line is that there is a ton of liability and profit margins are historically incredibly thin.

That said, restaurants get killed by no-shows. Having a party drop in size is one thing, but to have a party of 10 booked, then have it straight up no-show you is criminal. The labor and product spent getting ready for you is expensive. The server who is out those sales and gratuity is affected. And the shitty thing is that there are potentially DOZENS of other guests who wanted to book that time/table. At least at my place, we are blessed enough to have phone lines that seemingly never stop ringing. However, we don't know that the 600pm party of six is no-showing until we call them at 6:20pm and what are the chances a walk-in comes at that exact time?

I shit you not, we lose, on average, 30-40 covers a day from people who no-show. Now, I get that situations arise and emergencies happen but most people simply don't give a ****. But for parties of 5 or more we always call them 20 minutes after their reservation time. We give them 20 minutes in good weather and 30 minutes in bad weather. 80% of the time the guest will answer and then hang up on us. Jerks. We even have a feature that texts the guest a reminder (this is in addition to a confirm call two days before and an email one day before) with an option to cancel the reservation. They have PLENTY of opportunities to allow us to rebook in a timely fashion.

Some restaurants are beginning to charge a deposit when making the reservation and it is possible to have it done through an online reservation platform. Would you guys flip out if your favorite restaurant required you to give your CC information (an open authorization) with the knowledge that you'd be charged a "loss of revenue" (for lack of a better term) if you no-show without notice? I believe it would be a small fee, a slap on the wrist if you will. A reminder to not waste their fellow man's and local businesses time. Perhaps $50/reservation. Whatever the price is, I would give the server, bar, and general support staff a cut of it as we are all in this together. But my main objective would be to curtail this activity or at least limit it as much as possible.

This kind of thing has caught on a bit in Asian and European culture a bit from my studying of it, but not so much in America...yet. I hate to be the first one in our market to do this and cause a negative reaction. I'd much rather someone else be thrown through the plate glass window, if you will. But it's killing us. Adding up the numbers makes me want to cry.

I don't want to make this post any longer as I think you get the gist of what I'm trying to explain. Let me know your thoughts/reactions. I'd appreciate it. I really started thinking about this idea more during our last shutdown over December. I had guests seeing empty tables on our patio (we were only allowed patio dining) and they couldn't believe it. Knowing how hard it is to get into my place they would ask my skeleton crew and I why they were empty. They couldn't believe people would no-show us and several guests said we should start charging. I thought, hmmm...maybe the tide is beginning to change.

A good article

Another good one, from Ireland

Why get greedy with it? If its 40 customers a night, $10-15$ each while keeping your resources seems enough. yeah maybe $50 drops the no-shows to zero, but is also a deterrent. $15 and maybe you get to a middle ground. People can still cancel if their party doesn't materialize without feeling punished...like there is a number in there where you just lost a customer for life. Avoid that in certain locations. Every situation is different of course. 15$ might be right for some, $50 for the highest end, and $5 for others.
Its a competitive environment and each restaurant can figure out what is best for them. It would be better if lots did this so it was normal and you don't get excluded.
I would lean toward a slap on the wrist that doesn't prevent them from enjoying their next meal with you.

Or even make it a coupon type deal...where you charge $25 for the no-show...but they get $15 back off their bill if they do it right the next time. (my final answer there ain't bad)

 

[jooo83]

Many restaurant in Chicago have been charging deposits since the early summer/late spring. At least the more "upscale" places. I don't have a problem with it . I especially don't have an issue with the customer losing the deposit if he or she doesn't show or fail to cancel the reservation within a reasonable amount of time. I do, however, take issue with places that charge just to take the reservation (meaning the amount you pay is not credited toward your bill). I experienced that with with a River North steakhouse I won't mention by name. It was a small amount compared to the total bill. But it wasn't the amount of money but rather the principle I take issue with.

 

[Gustavus Adolphus]

Great question. I'm 100% in favor of this in the short term.

 

[HeHateMe]

What happens when you get there at the correct time, and the table isn't ready?

You'll probably whine and ***** about it until they give u complimentary Mozz sticks with ranch dressing they spit into.

 

[HeHateMe]

You'll probably whine and ***** about it until they give u complimentary Mozz sticks with ranch dressing they spit into.

@BearsBud. I noticed u negg3d this post is it because truth hurts?

 

[Sculpt]

So, wanted to pitch you guys an idea that's been floating out in the ether for a while about restaurants charging/requiring a deposit to make a reservation. In addition, the idea that a restaurant can charge/keep that deposit if you or your party no-show with zero notice. What are your thoughts?

No, I don't like the deposit idea. Not sure folks are ready for that.

But I think the answer is more simple. Like others have hinted at... require people text, call, or app, to confirm or cancel their reservations 30 minutes prior to the reservation, or they lose it.

Most people know they are going to show or not 30mins prior to the reservation, and it'd be easy enough for them to confirm that.


And now there's computers! So you could also just keep a costumer list... if they they no-call-no-show, they can't make reservations anymore.

 

[Burque]

My thought is that on large parties it would work great, 50$ but they get something in return maybe like an additional free app or something cheap for you to provide, small parties I would tend to fall on the side of doing a text confirmation 30 minutes before or they lose the reservation.

It is easy to fill 2-4 person tables if you are already a busy restaurant but those 6 tops plus can mess up an entire evening in planning/table adjusting/server planning, only to have it all just fall apart. Making large parties have at least some financial commitment to you as you have one to them seems reasonable to me.

 

[Raskolnikov]

Prior to Covid, my wife and I ate out at least once a week...I'd be fine with the deposit idea as long as it was absolutely locked into me receiving a discount if I'm not seated within 15 minutes of my reservation, and as long as there was a reasonable period of cancellation allowed, say 6 hours prior; after that you're locked in, no refund...in the many times I've eaten out, I can't recall any time that I would have lost my deposit under those conditions.

Yeah...I believe in incentives not penalties. Give your customers a couple chances and don't be a dick about it, etc.

So like..

1. Deposit $15 or something small..but adds up and gets the job done...not totally cover the issue but its going to reduce the issue naturally. Not such a bad punishment they blacklist you if something outside of their control happens, etc..etc (or $50 if you have skip out issues, but refund 30 or 35 for no shows)(or make it $10 per seat/plate, sounds better than $50 fine and is space fair)

2. Refunded (or postponed and held for next time)if you call to cancel at least 30-60 minutes prior(maybe 60 minutes prior to 30 minutes late which is the limit of your grace), whatever works for that particular restaurant. This gives folks a chance to update you and maybe discuss if its a problem they are running late, if problem refer to positive solutions in 1 and 2, they are working with you so get them to schedule another day or tell them there deposit will apply next time.

3. Some kind of small bonus if you actually do show up within 15 of on time. (app sample of the day, drink sampler, etc) People like rewards more than punishment. This kind of shows you have an issue but are working both sides of it and not just dickheads. and maybe you sell a high profit item out of it.


The more welcoming and fair this policy appears at a glance, and the easier it is in practice to manage and explain without argument, I think the less issues it would cause.

Of course some restaurants in some locations don't have to care about repeat customers or franchise concerns...but I would think you really don't want too many arguments inside the sacred space of your other customers experience.

 

[MDB111™]

OP what we need is like a reverse DoorDash app for restaurants like yours.

Guest makes a reservation, gr8.

But in order to keep it, they need to log on to the app and confirm their intention to use said reservation 30 minutes before, and at that point the app puts a small hold on their card.

App tracks GPS on primary guest, and if they are not en route to your restaurant it alerts you so you can have staff call them.... maybe they're running late, maybe the app is malfunctioning, etc.

If they do not show, they incur a monetary penalty, and you can rate them as a guest, so someone constantly telling you to **** off, maybe you just don't allow them to make reservations any longer.

For good guests that you've previously known to be reliable, you could offer them perks thru the app at your own discretion.... discounts, free drinks, free appetizer, free desert.... and combine it with your changing menu to push certain money maker dishes out of your kitchen.... first one is free, then they order it every time.

I wouldn't personally be offended by what the OP proposes, but I don't know that it would efficiently solve the problem.

Jesus, this just seems too focused. What if a patron says(through internet) I am coming. And if he doesn't show, his social ?identity is hashtagged negative? And if he does it again, we simply chop his fucking head off? How many times will one say he is coming and not come?