Should Restaurants Offer Gift Cards to Reimburse No-Show Reservation Fees?
For restaurants, a no-show on a reservation is clearly bad for business: That’s revenue that’s been expected — possibly even prepared for when stocking ingredients and scheduling staff — that will never be recouped. But trying to preventno-showss can be bad for business, too. Penalizing diners for not showing up can turn them off for good — even worse if they bad-mouth your eatery to other people or, heaven forbid, turn against you on social media. So what’s the solution? A recent article in the Portland Press Herald revisited a solution that might be worth seeing more often: gift cards.
Okay, no, restaurants aren’t giving customers gift cards simply for not showing up. That would be crazy. Instead, when a diner books a reservation, they’re asked to put down a significant deposit. If they don’t show up, they get that deposit back, but in the form of a gift certificate that can only be spent back at the restaurant. The logic is sound: The restaurant still gets the revenue for that night, but the diner doesn’t feel like they’re losing their deposit. And even better for the restaurant, a gift card encourages that patron to actually show up some other time — hopefully, to be impressed by a great meal and not blow off reservations in the future.
The Press Herald offers up the example of Vinland: The Maine restaurant requires a $35 per person deposit for parties of five or more, and if a cancellation is made less than 48 hours in advance, that money is “returned” in the form of a gift certificate. “I would do it all the time if I could because we do have a terrible problem with no-shows,” chef and owner David Levi was quoted as saying. “We’re a small restaurant, and there’s a tremendous amount of work that goes into the food.”
Interestingly, the National Restaurant Association actually includes the gift card method as one of its many suggestions in a 2013 article on how to “Say good-bye to no-shows” — so it’s not a new novel approach. But then again, it’s possible many of us aren’t familiar with this concept because, you know, we’re not jerks who bail on reservations.