Taking a deposit for a reservation means that, as a guarantee, the customer will show up – or that the fee will cover the costs of last-minute cancellation. However, not all restaurants require an advance deposit, because they are usually afraid to annoy or frighten off customers. You can manage payments easily by setting up a deposit with TableIn, but before doing so, we suggest you to weigh the pros and cons of asking your clients for deposit.

The Pros:

Reducing No-Shows. No-shows are an age-old problem for every restaurant. Some restaurants handle this problem quite easily, while others suffer losses. Many customers don’t realize how harmful a no-show could be, especially for small restaurants that only have a few tables. Asking for a deposit can reduce your no-show rate. The prospect of losing money focuses clients on making sure they turn up, or will at least encourage them to think twice before canceling the booking.

A Secure Way of Protecting Restaurant Revenue.

Some restaurants store customer card details, even if they don’t show up. However, the practice shows there is no way of knowing if these numbers will still be available on the reservation day. Also, many restaurants use these numbers just to threaten customers, but fail to charge no-shows, because they are afraid to annoy them. Clients who receive a surprise fee can turn hostile, leave bad reviews, or share their experience, which means losing out on multiple potential sales. Asking for a deposit is a much more secure payment method, as you receive the deposit directly into the restaurant’s account with the customer’s consent.

Charge Group Bookings. A no-show of large groups could be damaging for any restaurant. For example, if the restaurant gets a reservation for a 15-20-person party, they have to prepare for it – scheduling an appropriate amount of staff in the kitchen, paying for chefs, buying more food, and so on. Commonly, it is impossible to seat all the tables if you get a cancelation one or two hours before. Asking for a deposit upfront means greater security for your restaurant, ensuring the large group is more likely to show up, or at least covering a portion of your losses should they not.

Using Deposits for Special Events. The number of reservations increases greatly during special events, busy nights, or parties. Also, during these occasions, customers tend to spend more, so every no-show can be a great loss. It is necessary to ask for a deposit, because more customers are appealing to the same table.

It’s Simple to Take Reservations with Tablein. When you need to ask for a deposit, it is additional work for the team during a busy time, because they have to write a money receipt, while also refilling information for the right date and customer. However, it is a simple and easy process using online reservation systems such as Tablein. Clients do not have to come into the restaurant early, because they can pay instantly via the Internet from home. When reserving the table, all payments are directed to restaurant’s bank account. If a client does not pay a deposit within 24 hours, the reservation is canceled automatically.

The Cons:

Reducing the Number of Customers. Deposit fees may drive away some customers, as they don‘t want to pay in advance, or are not sure about their reservation and may choose another restaurant which doesn’t ask for a deposit. However, these clients tend to be no-shows.

More Walk-Ins Than Reservations. If the restaurant is in a special location, they may have more walk-ins and can easily refill their seats with customers from the street. Because of this, requiring a deposit is likely to lead to NO reservations.

The Restaurant Does Not Have a Strong Policy. If a restaurant has fees, they should always be upfront about the policies and procedures surrounding any charges; for example, how many days of cancellation deposit will be refundable. There is always a risk that someone has good excuses, even if you were the victim, so it is important to prepare for all these events.

There is no right or wrong answer. Although we found more pros for requesting a deposit, it all depends on the type of restaurant you own, the size of the dining room, the restaurant’s location, and sometimes the customers’ culture. One thing is clear: Taking a deposit via an online reservation system is comfortable for clients and saves the team some work.