Smart SpendingSmart Spending

Should no-show diners have to pay?

Some restaurants now ask for credit cards to confirm reservations -- and charge people if they don't show up for their dinner date.

By Giselle Smith Mar 16, 2012 5:17PM

Image: Couple toasting champagne glasses at restaurant table (© Chris Ryan/OJO Images/Getty Images)You make a reservation for dinner in a week's time, but then something comes up -- the kids get sick, your date cancels -- and you can't make it. Do you call the restaurant or just forget about it?


I mostly fell into the latter category, especially when it was a restaurant that I might never visit again. But recently I've noticed that a lot of places ask for a phone number with my reservation. Knowing I may get a phone call if I'm late or don't show, I usually pre-empt that call with one of my own.


Some high-end restaurants in cities such as New York are taking things a step further, asking for a credit card with every reservation -- and charging diners who don't show or who cancel less than 24 hours before their reservation time.


From the restaurant's perspective, holding an empty table for no-show diners can mean turning away other potential customers and losing out on valuable income. That's not small potatoes in an industry where profit margins can be as slim as 3% to 5%, The Wall Street Journal reports. Even one empty table in a small restaurant can take a big bite out of the night's proceeds. In big cities, as many as 20% of diners might not keep their reservations, the Journal says.


So restaurants have turned to prodding customers where it hurts: their wallets. (Post continues below.)

Some restaurants charge a flat fee per person for no-shows. New York's Eleven Madison Park, for example, charges $75 per person if reservations are not canceled 48 hours in advance. Coi, in San Francisco, started charging $25 about three years ago, but bumped it up to $100 before seeing results, the Journal says.


"Our menu is $165, so we're still losing money," owner Daniel Patterson told the Journal. "It's really not about charging people. It's really more about making sure they're serious about the reservation."


A number of restaurants that serve prix-fixe menus simply require prepayment. San Francisco's two-star Michelin restaurant Saison, for example, now books all of its tables through online service SeatMe, says Inside Scoop SF. Prepaid diner options range from a 16-course weeknight meal for $198 to an all-inclusive (food, wine pairings, service and tax) seat at the Chef's Counter for a whopping $601 per person.


Calling out the culprits

Another restaurant tactic, gaining popularity in Australia, is using social media -- posting deadbeat diners' names on Twitter, for example, to shame them into changing their ways.


"With Twitter, we are given the opportunity to respond in exactly the same manner as our guests respond if they feel we have let them down," Sydney restaurant owner Erez Gordon told the Journal.


True enough, but customers don't necessarily appreciate public shaming any more than restaurants appreciate anonymous online social media reviews. Kansas City Pitch reader  "Nick C." wrote about the practice, "I have never no-showed for a reservation but can be quite certain that I would not consider returning to a business if they posted my name in such a public manner."


Some blame the impersonal nature of online booking for no-shows. When someone can make a reservation without speaking to a real person or even contacting the restaurant directly, they may feel less obliged to honor it. But OpenTable, an online service that takes reservations for more than 25,000 restaurants in North America, isn't letting customers off the hook.


The site tells diners to cancel reservations, either online or with the restaurant, and keeps track of no-shows reported by restaurants. OpenTable's user agreement states:

If you are unable to keep your reservation and you fail to cancel, OpenTable will send you an email letting you know that our records indicate that you were a no-show. . . . Your OpenTable account will be terminated if you no-show for four reservations within the same 12-month period.

Though pay-for-no-show policies are mostly enforced at fine-dining establishments, they are not exclusive to upscale eateries. Credit cards are now required to make a reservation at about 20 restaurants inside Walt Disney World, the Orlando Sentinel reports, and diners who don't cancel at least 24 hours in advance are charged. The fee is $10 to $25 per person, according to Time.


To put things in perspective, it's not a lot different from a hotel charging you if you don't show up, and most people pay in advance for theater or concert tickets. Isn't dinner at a fine restaurant an evening's entertainment?


What do you do when you can't -- or don't want to -- keep a dinner reservation? Do you call and cancel or just not show? Should restaurants be able to charge for empty tables?


More on MSN Money:

Mar 17, 2012 11:34PM
It is common courtesy to cancel a restaurant reservation if something comes up. Personally,  I never give my credit card when making a reservation; there are just too many good restaurants who will not ask for my card that I would go to instead. Additionally, if a no-show is charged  and their table is filled by walk-ins which we all know is most likely to happen, than the restaurant is making money twice for the same table. Since when is something like this legal??? People, have the decency to cancel your reservation if something comes up, it is the respectful thing to do, second, do yourself a favour and stay clear of restaurants who ask for your card. Do you know where your card number is going to end up in a restaurant? Do these people have a secure way of storing your credit card information?
Mar 16, 2012 11:59PM

It looks like the restaurants are trying to follow the Airlines. The paid fee for a no show would be acceptable if the restaurant was accessed a large fine if they rented out the table for the next 1.5 hours after the no show. Otherwise it would be double dipping, receiving a fee from the no show and a profit from the replacement diner.


Most restaurants can fill the no show space very easily with no loss. Corporate greed now dictates that if you can find a meaningless reason with a 5% validity you should increase cost to clients, even though 95% percent of the logic and reasoning is against it.

Mar 18, 2012 6:40PM
"Our menu is $165, so we're still losing money."  What in the hell do they serve there that costs that much?  Dodo bird eggs with Unicorn sirloin steak?  $165 is a large investment in something that just ends up being poop.
Mar 19, 2012 11:53AM

This is absurd.  Just a flimsy excuse for some restaurants to try and rip people off.  What a scam too, this charge is nothing but pure profit for the restaurant.  For something like a hotel room that easily can't be rebooked if someone no shows, the money is legitimately lost.  But if your restaurant is that popular, I can't see why you just can't give that table to the next person on the list.  Who do these restaurant owners think they are?  Sorry but 24 hours notice for a cancellation is even more absurd.  I personally would never eat at an establishment that had such a stupid policy.


I have a better idea.  If a person makes a reservation and doesn't show for 15 minutes after their reserved time, the table goes to the next party on the list unless the person called to say they would be late.  If they show up late and didn't call, tough cookies.

Mar 20, 2012 10:53AM
What's the problem with calling in to say you will be a no show? We have gotten so rude that we are defensive about the right to be rude. Try giving a small party with people you know and don't be surprised if they don' show up. Ask why later and you are branded as the one with the attitude. Many people think the only cost a restaurant has is the cost of the food. The open space at the table is the same as a manufacturing machine in a factory, as far as business goes. When that machine isn't producing you are loosing money. To the guy that thinks to loose money needs possession first. Make an investment and have someone lie and take the money earned, I bet you'll think you lost that money. When you could have invested somewhere else and made some money.
Mar 19, 2012 1:16AM
Last time I checked it was the food that cost money, not the sitting space.  You're not 'losing money' anywhere except in your head (how would you even know what to prep unless you had their order in advance, too?).  It may be nice but I see no obligation -- if they aren't there when they are supposed to be, for whatever reason, you give the table to someone who is there.  What's the matter, you don't have a line out the door? Whose problem is that? 
Mar 17, 2012 9:51AM
This goes back to taking people at their word... years ago, this wasn't really a problem... sadly, in our "failure to commit to anything" society, people have to get socked in the wallet a few times to finally wise up.

I see it the same way with hosting any events where people are expected to show up.  If commitment (money) isn't made in advance, for many instances, plan on significant no-shows.

There are exceptions of course, but folks tend not to care until it hits em in the bottom line... what a sad, sad state of affairs
Mar 19, 2012 11:07AM
I guess we are led to believe that the $165 is pure profit. Even around 5% it is only $8.00.  Hope this guy is the cook and not the accountant. 
Mar 19, 2012 1:17AM
*In order to lose money you have to have had it in the first place.
Mar 18, 2012 1:43PM
Yes they should charge you for a no call no show.
Mar 19, 2012 1:07PM
I agree with the charge. A restaurant may turn down other potential customers over the phone. Margins are slim and this helps. Profits are much higher on beverage and that is where the real loss is felt. A couple of drinks or bottle of wine is the thing that protects the slim margins.
Mar 18, 2012 6:43PM
Just book your table with a $25 prepaid credit card.  Same for motels.    
Mar 16, 2012 8:20PM
Dear Nick C,

If, after confirming the reservation you failed to show up and were consequently publicly lambasted for your behaviour I think it highly unlikely the restaurateur would want you back on his booking sheet anyway.  So, quite an empty threat.  We respect those who respect us.
Yours sincerely,
Erez Gordon
Bistro Bruno
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.