Some of the best and most renowned restaurants in Europe have decided to fight the industry-wide problem of no-shows by asking for deposits or credit card information when booking.
We spoke to 6 prominent chefs and restaurateurs in Scandinavia about reservation no-shows and how they’ve solved the problem.
“No-shows are the restaurant industry’s biggest problem. I’ve worked at places where 5, 6 or 7 tables could be no-shows in one night. It’s a disaster!
At SAV, we implemented the credit card model from the very start. (This means that they ask guests for credit card details to confirm the reservation and have the possibility of charging a no-show fee if someone doesn’t show up.)
We only have four tables and we have a no-show policy that says you have to cancel at least 24 hours before your reservation. It has happened very few times that we’ve had a no-show. In the first 14 months of opening, we only had one no-show. It’s insane!
I also have to emphasise the balance between good customer service and business. At SAV, we rebook anyone who has trouble coming to their reservation. Because in the end, it’s all about happy and satisfied guests.
It’s about the entire experience. If I had only taken the no-show fee, they probably wouldn’t have come back.
We operate with such a small profit margin. So when 6 guests don’t show up, and this happens repeatedly, it really affects the bottom line. It’s the difference between making money and losing money. If we didn’t have all of these no-shows, I could hire more staff, have people work fewer hours and give the guest a better experience.
And when you’re looking at all this food left at the end of service that was prepared and supposed to be served. Aside from the emotional side of it, you are throwing away food and that makes me even more frustrated than the financial part of it. It is the opposite of what we are trying to do from a sustainable standpoint.
We started dealing with no-shows by implementing a credit card policy. We used to average between 2-4 no-shows a night. As soon as we implemented the credit card policy, we only experienced one no-show.
For us, it’s simply a matter of survival. More restaurants should ask for a deposit or credit card information. This would help in the longevity of restaurants and give restaurants the resources to offer a superior experience.”
“I don’t think (no-shows) are done out of disrespect by most people. It’s more that they don’t understand the consequences for the restaurant.
At Kontrast, we’re fully booked with an average spend in the restaurant of about 2-2,500 Norwegian kroner ($220-280 USD). If a table of three doesn’t come and they have a reservation at 8:00 pm, that means we’re losing 7,500 kroner (approx. $840).
Plus, we’ve already prepped the food and have to throw it away. If that happens once a week for the 48 weeks a year that we’re open, it starts to become a big number.
We started asking guests for credit card details to confirm the reservation. Before implementing the credit card solution, we used to have 1-2 no-shows a week at Kontrast. It could be a table of 5, 6 or 2. I remember the last Saturday before we started taking credit card details – it was a 6 top and a 4 top no-show on a Saturday. That’s a lot.
Asking for credit card information is nothing new. If you’re booking a hotel room, your movie tickets, your opera tickets, I mean everything you’re buying or planning to do, you have to give away your credit card details or just buy it straight up. For some reason, this isn’t industry-standard in the restaurant business.
But it’s up to us in the industry to change it. If we let people get away with that behaviour (no-shows), then it’s never going to happen.
For me, it’s the only way forward. I’m actually surprised when you don’t have to give away your credit card information. Even simpler restaurants would benefit from it. The more you do it, the more it becomes standard practice and guests will have a better understanding of it.
If you’re sitting on people’s credit card details, and you’re ready to charge them, I think they’re much more likely to cancel their reservation in advance. People are much more attentive about cancelling when there’s a risk of getting charged.
We tried a scare tactic before. It involved a message on the guest’s booking confirmation saying that ‘If you don’t come, we’ll send you an invoice for this amount’. But trying to scare people into respecting you doesn’t work. And it’s just more work sending invoices to people who don’t come.
All I want is for guests to honour their reservation or cancel if they’re not coming. That way we can invite other guests that want to be here. Or if we have a lot of different cancellations, we won’t be fully staffed and can save time and money that way.”
“No-shows are like a new culture. When I speak with friends who are not in the restaurant business, they’re like ‘Oh, we booked tables at 4 different restaurants tonight. We can decide later where we’re going’.
That’s ridiculous. It’s like there’s no commitment. We’re trying to run a business and do something very special for the guests – and then that’s the way they treat us.
But that same person wouldn’t do that with a bank meeting or a dentist appointment. So why here at the restaurant?
It’s important (for restauranteurs) to note that no-shows can be completely real and well-grounded. It can be the subway or bus or the taxi broke down, you know. Everyone can relate.
The best way to end restaurant reservation no-shows is to educate your guests on the ins and outs of a restaurant. Let them know how their actions affect the business and the people behind it. But you have to do it very delicately. You don’t want to make the guests afraid of going out to eat.”
“I’ve spoken to colleagues multiple times about people who have the same reservation all over town. I guess they do it to be sure that they have the opportunity to eat exactly what they want to at that time, and then they’re just not good at cancelling the reservations that they’re not going to use.
Taking a deposit or credit card information as a way to stop no-shows in the restaurant is supposed to be a preemptive strike against no-shows, a friendly incentive. Nobody is interested in actually taking the fee. But it has had the effect that we were hoping for.
We used to have 1-2 no-shows per week at Substans. After we started registering credit card information, that was the end of it. We haven’t experienced no-shows since. We’ve had one where the guests thought they had reserved a table for the next night... but that was a mistake in good faith. Besides that, we haven’t had no-shows since taking credit card info. Not one.
A single table no-show at our restaurant can mean 10% of the revenue for that night. In other words, the economic impact for a restaurant and no-shows can be very damaging.
It doesn’t seem like people think about how it affects a restaurant. Just yesterday I had 4 no-shows despite our deposit rule. That’s quite a lot. I might as well have cancelled an employee. There’s more to it than just food waste, too. It’s the whole planning of the restaurant that gets messed up.
If more restaurants and bistros would start taking credit card information as a way to stop no-shows, it would help educate guests on a broader level. It would mean that people wouldn't be able to say that it’s just an issue at one restaurant – they’d see that it’s a real problem and that we’re united against it.
The issue could be a bigger societal problem than we think.
The San Francisco Chronicle has commented on the issue and blames the current state of no-shows on the de-socialisation of society. “It’s completely easy for people to not worry about no-showing. They don’t even want to cancel a reservation on the phone because they don’t want to deal with a person. It’s society. Everybody is so isolated.”
Gayle Pirie of Foreign Cinema in San Francisco told the Chronicle: “It’s hard on the kitchen, hard on the clients. Every day you look at the book and you check the weather, trying to find some clues about potential no-shows. It really is a day-to-day process. There is no formula.”
So if there is no formula, how can you avoid it happening at your restaurant?
Instead of relying solely on your gut feeling to run a successful restaurant, there is a better way to minimise the no-show issue.
The Superb worldwide community of top chefs and restaurateurs have all implemented a Guest Experience Management platform (GXM) where they can either take a deposit with the reservation or charge a no-show fee if people don’t show up. It involves giving your credit card details to reserve a table.
Having something at stake might be the reason that people respect their reservations more after entering credit card details.
The idea of changing an established culture that exists all over the world within a specific industry seems like a tough job – and it definitely will be. But in joining forces, the chefs and their restaurants have started to disrupt the industry by protecting themselves against no-shows and making people think about how their actions affect a restaurant and its employees.
Kontrast, Substans, SAV, Agrikultur and PMY have all used Superb to fight no-shows and lowered their no-show rate from an average of 16% to 0.8%.
Want to join the movement? Click here to start protecting your restaurant or bistro against no-shows.
We’re often asked about how appropriate it is for a restaurant to ask for a credit card confirmation or deposit. Will guests see it as rude? Will it affect who books a table?
Asking for a deposit is a transparent and flexible way to deal with no-shows. For the guest who makes the reservation, the deposit amount is deducted from the final bill. If the guest can’t make it – and cancels within the agreed time frame – the deposit can be refunded.
What’s most important is that your reservation policy is clear and fair for both you and your guests.