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Updated April 16, 2024
Author Chief Commission Slayer, Shea Irwin

Every hospitality venue owner knows the feeling. You take a call from a customer:..

“Hi, can we book a table for 7 pm tomorrow night? Yeah, 4 of us. We’ll be there.”

The next night, 7 pm rolls around. 7:15 pm… 7:30 pm… 8 pm…

They don’t show up. No call, no answer, and no revenue in the till. Just crickets.

What’s worse, you rostered on staff and ordered food to cater for the numbers. It’s enough to make you go grey.

No-show diners are a plague on the hospitality industry. Stats suggest around 20% of restaurant reservations don’t show up. It’s why more Aussie hospitality venues are fighting back by taking reservation deposits or charging no-show fees.

5 benefits of reservation deposits

A reservation deposit simply means taking an upfront payment (or charging a no-show fee) for a customer to secure their booking. It’s a practice that’s growing in the hospitality industry for several reasons:

1. Reduce no shows

Asking for a non-refundable reservation deposit or implementing a no-show fee can be one of the most powerful ways to reduce no-show diners and last-minute cancellations. Recent data shows they reduce no-shows by a whopping 55%! That means you have a better chance to fill your tables with paying customers instead of wasting money on empty space.

2. Increase revenue

Even if you do get a no-show or last-minute cancellation, your no-show policy prevents you from being left with nothing. Just a couple of hundred dollars extra each week adds up to more than $10,000 in additional revenue each year – which is far better than the alternative.

3. Plan better

It’s easier to plan if you’re sure of your bookings. You can roster on staff without worrying about sending them home early, optimise your table layout, and order the right amount to prevent food wastage, so each service runs smoothly and you maximise your profits.

4. Take larger bookings

At peak times like Valentine’s Day, Mother’s Day, or the Easter long weekend, you can confidently take bookings for those larger tables, without worrying about being left in the lurch.

5. Keep guests happy

Some venue owners are worried reservation deposits will scare customers away – but it has become a far more common and accepted practice in recent years, especially since COVID-19. It also encourages accountability among diners and prevents people from making reservations they have no intention of showing up to, which means fewer people miss out on tables.

3 types of reservation deposits

There are a few different ways you can implement a reservation deposit policy:

1. Take a simple reservation deposit

Probably the most common way is to take an upfront deposit. You can do this per party or individual on the booking (for example, $20 per person). When the party checks in, you can either refund the deposit or credit the reservation deposit towards the final bill.

2. Charge a no-show fee

Use your restaurant booking system to pre-authorise the customer’s credit card when they make a reservation. Let them know they will be charged a set amount if they either don’t show, or if they cancel without enough notice for you to re-book the table (e.g. at least 24 hours in advance).

3. Collect a fully pre-paid reservation

This option is mainly for fixed course menus, such as a chef’s tasting menu, when each person is paying a set amount. Prepaid menus and reservations can be incredible at reducing food wastage, as well as preventing no-shows. You can add on drinks or wine pairing to generate even more revenue.

How to implement reservation deposits at your Aussie venue

Once you’ve decided on the type of reservation deposit, there are a few steps you need to take to implement it.

Include it in your T&Cs

Be clear and upfront with your guests about your no-show policy. Don’t tuck it away in the fine print. Make sure it’s in your terms and conditions and highlight it to your guests, so they’re aware of the consequences and they can’t plead ignorance later down the line.

Train your staff

Make sure all your staff are aware of the new policy, why it’s in place, and how they should communicate it to guests. If staff understand why you’re doing it, it’s easier for them to explain it to customers clearly, which will reduce potential pushback or complaints.

Invest in a reliable system

It’s all well and good creating a new policy, but you also need a system to carry it out. WOWAPPS has a built-in feature that makes it fast and easy to pre-authorise customer cards and charge reservations deposits or no-show fees. It practically works on autopilot too, which means minimal training for your staff and no interruption to your service.

Want a hand implementing no-show fees or reservation deposits? Speak to our team and we’ll show you how WOWAPPS can make it happen. We’ll even set it up for you at no charge!


Chief Commission Slayer, Shea Irwin