Restaurant Reservation Cancellation Fees Abound, but Who Really Pays?
Pete Wells , The New York Times | Updated: June 03, 2015 13:38 IST
Booking a table used to feel pretty good. Sure, it wasn’t always easy to get the time and date we wanted, but once we did, there was a sense of accomplishment. And most of the time, the call ended with the first sweet embrace of hospitality, as the nice person on the phone promised your table would be waiting and the whole staff would be looking forward to your arrival.
But lately, these same pleasantries seem more likely to come wrapped around a barbed hook. Before you can write down the time and address, you will have to dig into your wallet for a credit card number. Then you are told that if you need to cancel without adequate notice - anywhere from a few hours to a full week before - you will have to pay a cancellation fee, which may be as low as $30 or as high as $200 a person. Or, in a twist that several restaurants have adopted, you may have to pay for the meal in advance in exchange for a ticket. If your plans change, it’s your job to find someone to take the ticket off your hands.
OpenTable, the dominant online reservation service, said that just 1 percent of the New York City restaurants it works with require a credit card for all reservations, virtually unchanged from a year ago. Still, in my rounds, something seems afoot.
In the first six months of 2012, I reviewed two restaurants that had me cough up a credit card number when I reserved. By the end of this month, I will have reviewed five such places this year.
Critics don’t eat like normal people, so my experience is a warped guide to general trends. But I do know that more tasting-menu restaurants are opening than just a few years ago, and most of these small, cloistered places have cancellation fees. Casual restaurants are now asking for credit cards, too; big, crowded places like Santina in the meatpacking district and even an oyster bar in Brooklyn.Together, these bits of anecdotal evidence are enough to give me pause, and I’d like to use that pause to ask if we’re all comfortable putting money on the line when we make plans for dinner.
Let’s stipulate from the start that restaurants are not the enemy here. They are simply trying to cut back on the no-shows and last-minute cancellations that restaurateurs and OpenTable say account for about 4 percent of all reservations.
No, the real culprits are people who make reservations, confirm them a day or two ahead, probably even get a reminder by email or text - and still don’t show up.
Some of them may suffer from genuine memory loss. The rest are just small-scale sociopaths. Because they do not think about the results of their actions, tables sit empty while hungry would-be customers are turned away at the door. By threatening to charge for missed reservations, restaurants are trying to pierce the veil of obliviousness in which these people live their lives.
All the restaurant operators I’ve spoken with who have a cancellation policy claim to hate the practice. And they should. The words “cancellation fee” don’t call to mind the pleasures of a plate of yellowtail and a glass of sake; they make you think of your cellphone provider and cable company.
Whenever I give up my credit card number and am told I’ll be charged for bad behavior, I hear several messages, none of them warm and fuzzy. It says that I’m not trustworthy. It says that the restaurant sees me as a revenue source before it has had a chance to treat me like a guest. It says that a reservation isn’t an appointment with pleasure; it’s an obligation to be kept.
In truth, it is both, but securing a reservation with a credit card adds a ticking-clock anxiety that is not normally there.
Securing may not be the right word. Some online reservation systems, including OpenTable, do provide security to keep card numbers safe from hackers, but not all restaurants use them. Before surrendering a card number over the phone, it’s probably wise to ask how the restaurant plans to safeguard it.
The answer may be surprising. Tse Wei Lim, an owner of Journeyman in Somerville, Massachusetts, said that before moving to a ticket system recently, he did not ask for credit cards for reservations because he did not have a method of keeping the data that complied with the card companies’ security rules.
“I’ve spoken to fellow restaurateurs, and more than one has told me they will ask for a credit card number on the phone if it’s a large party, pretend to write it down, then they throw it away,” Lim said.
That’s not the only white lie. The dark secret of cancellation fees is that almost no one has to pay them.
“Although we take credit card numbers for parties of five or more at my restaurants, we never actually charge the customer for not showing up,” the restaurateur Keith McNally wrote in an email. “Of course, we tell them in advance they’ll be charged for not showing up, but it’s difficult to have the heart to do it. Even, as in my case, when you don’t have a heart to begin with.”
Jeff Zalaznick said that while his restaurants Dirty French, Carbone and Santina technically require cancellation by noon the day of the reservation, customers can cancel without penalty up until 5 p.m., “with the exception of something really extreme like a 10-person reservation, something that really is going to screw up the entire night.”
In those cases, he said, the money is given to a charitable group, the Robin Hood Foundation.
“This is not about us making money,” Zalaznick said.
There are some variations on the theme. Some restaurants will send the truant customer a gift certificate for the amount of the fee. Jeremiah Stone, one of two chefs and owners at Contra in New York, said that in the four months that his restaurant has had a cancellation policy, it has collected the $65 fee about 20 times, and if the guilty party eats at Contra at a later date, he said, the money will be refunded.
Restaurants, after all, do not want your cash if it means you’ll resent them. They want your business. This is why the Union Square Hospitality Group has no cancellation fees except on busy holidays like New Year’s Eve.
“If you’re penalizing people with a cancellation fee, it’s also probably an effective way of canceling the relationship in the long term,” said Sabato Sagaria, who holds the title of chief restaurant officer in the company. “If the first interaction is making the reservation and the second interaction is the cancellation fee, chances are there won’t be a third interaction.”
With tickets, the restaurant takes the money long before it feeds you. This model, which is so far mainly used by tasting-menu restaurants, makes the customer assume more risk, but it offers some advantages, too.
Tock, the ticketing software built by Nick Kokonas, a partner in Alinea and Next in Chicago, typically lets diners see all the available dates and times at a glance. It’s efficient, and it avoids awkward phone calls that can make even the most self-confident diners feel as if they are standing at a velvet rope hoping they will be found worthy of admission. Some restaurants, like Kokonas’ and Journeyman, also offer off-peak pricing. Getting a discount on an early seating can take the sting out of paying upfront.
Both tickets and cancellation fees are tactics that restaurants can use only if they are turning customers away. Places that do not have that problem are more reluctant to ask for credit card numbers, because the request scares off some prospective customers. Because the places that ask you to put skin in the game are in a tiny minority, it can make them seem a little arrogant. It does not matter if the cancellation fee is never collected, or if the restaurant helps take a ticket you cannot use off your hands; a bit of the romance of going out to eat has already been lost.
OpenTable, like most tech firms, tends to see every problem as an information problem. In the case of cancellations and no-shows, it has a point.
Scott Jampol, the vice president for marketing at OpenTable, talks about education to “help consumers understand the impact of no-shows or last-minute cancellations.” He said the company was looking for more methods to “reward good behavior”; the tiny group he calls the “serial no-shows” can be locked out of the service, and he said there may be ways “to further penalize” repeat offenders without resorting to cancellation fees.
The service also broadcasts last-minute openings. Until recently, restaurants have been loath to do this themselves; they may be too busy, or they may be too proud to tell the world that they are not as full as everybody assumes. Some restaurants now do this through social media; if every place with a cancellation policy for all reservations did the same, the arrangement would not feel as much like a one-way street.
© 2015 New York Times News Service
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