Cancellation fee on restaurants

When should a cancellation fee on events or restaurants be applied? for how much? Will it depend on party size? Will it depend on time window?

I am interested in the feedback and experiences. We charge $25 per person, if cancelled less than 24 hrs in advance, but only for parties of 5 or more. We then take those $25 charge per person and turn it into a gift certificate they can later use.

I am looking to change that. what are some policies out there to deal with this? I appreciate everyone’s feedback

50% deposit to confirm the reservations at least 48 hours in advance. Balance of payment paid cash / credit at end of function. Q : how does your system work again? charge the “no show” guest then reimburse him the same amount in vouchers?

How you going to charge some guest who call to book a table on the day itself? if it is a booking made a week before with credit card guarantee, then you should have informed the guest on policy, 3 days at 50%, 2 day at 80%, full charge for no show, one day at 90% of the agree menu price of a set menu for group booking will be different policy.

50% deposit of what? of the bill? i don’t know what the final bill will look like. end of function? we are talking about a restaurant reservation,not a banquet function with a GTD F&B minimum. I’m in the US, so placing so many restrictions on making a reso makes people go elsewhere. i need to control the no show factor, while making easy for people to book a reso.

If you charge the guest and reimburse him in vouchers, you make sure you collect your money for rendered services, which the consumer will see as fair, as opposed to charging for cancelling and later having the guest have a negative perception of us just because they feel their specific reason for cancelling renders a fair reason not to collect the lost revenue.

We charge the money and give them a voucher so that they eventually come and spend the cancellation fee with us, instead of just loosing the money. its a friendly policy to keeps people on our good side. again, being in a highly competitive restaurant market, its important to keep people’s perception of us on their good side… securing all resos with cash or credit will not work if your competitors don’t apply that policy… we keep guest information and no show factored in the history, however unfortunately, most restaurants don’t have the benefit of doing what Ms Waters did in her restaurant 30 yrs ago. she had the demand and compression to do such luxury. I do not.

Usually, restaurants take advance for private functions/events and not on regular dine in.This is where cancellation fee applies in F&B.

Usually hotels take 50% of the event amount (based on confirmed no of pax - food & beverage/entertainment/ other facilities as per guest requirement) from the guest as advance upon their confirmation with an agreement which includes the terms and conditions and cancellation policy of the company.

Cancellation fee depends on the time window (when the guest cancels - 2 days before/ a day prior / last minute cancellation etc) as per company policy.

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