It’s not uncommon for restaurants to charge a reservation fee, especially on busy nights or during their peak seasons. But should you require a reservation deposit at your restaurant?

Research shows 20% of diners don’t show up for a reservation they made. While the reasons behind no-show guests vary, roughly 45% of guests don’t cancel because they can’t find information about canceling.

Not to mention, 27% of guests “can’t be bothered” to cancel, while 18% don’t cancel because they forgot they made a booking.

The following is a short guide on restaurant reservation deposits. We’ll show you the different types of deposits and fees and how to collect them and secure advance revenue to grow your business.

What is a restaurant reservation deposit?

A reservation deposit, also known as a reservation fee, is when a guest pays a deposit to book a table. Think of it as a down payment that is later deducted from the final bill.

Why do restaurants take deposits?

Reservation deposits are becoming increasingly common in the restaurant industry. There are 4 main reasons:

  1. Securing revenue

    By asking for a deposit, restaurants can ensure a portion of their revenue even before the guest arrives.

  2. Reducing no-shows and cancellations

    The primary reason restaurants ask for deposits is to reduce the number of no-show guests and last-minute cancellations.

    No-show guests can impact a restaurant’s revenues, causing up to 15% decline in sales.

  3. Reducing food waste

    Another reason restaurants ask for deposits is to reduce food waste. Restaurants in the United States could each produce up to 50,000 pounds (22,600 kg) of food waste per year.

  4. Financial wellbeing for the business and staff

    When a restaurant maintains its profit margins and sees fewer no-shows, it can maintain its restaurant staff with fewer chances of layoffs.

Types of restaurant reservation deposits

There are 3 main types of reservation deposits for a restaurant.

Reservation fee

The restaurant reservation fee, or deposit, is money collected in advance to book a table. Usually, the deposit depends on the number of people booking the table. When guests arrive and have their meal, the restaurant deducts the reservation deposit from their bill.

Prepaid booking

An alternative to restaurant deposits is a prepaid booking. This is common among restaurants with a fixed-price menu (prix-fixe menu). The restaurant requires the full upfront payment per person.

Many hotel restaurants require prepaid bookings, especially during the holidays or the restaurant’s peak season.

Cancellation or no-show fee

An alternative to a reservation fee is a cancellation or no-show fee. When a restaurant collects guest information, they ask for credit or debit card details.

If a guest fails to show up or cancels at the last minute, usually less than 24 hours before their scheduled reservation, the restaurant charges a fee.

How to collect reservation deposits at your restaurant

Use a reservation system

One way to manage reservations, along with waitlists, is to use a restaurant reservation management system, like Servme.

A reservation system helps you collect online payments, including deposits, prepaid bookings, and cancellation fees.

It also helps you get more online reservations through booking platforms and integrations.

Send reservation reminders

One of the top reasons guests don’t cancel reservations is because they’ve forgotten they’d made a booking.

Restaurants using Servme can send automated reminders via WhatsApp, SMS, or email.

Create clear policies

Before you can collect deposits, it’s important to explain to guests your reservation and deposit process. Make sure you clearly state your cancellation and/or no-show policy.

If you’re using Servme’s reservation management software, you can add your policies in the reservation widget.

Decide when you want to take reservations

Not all restaurants take deposits and not all concepts need to. Some restaurants opt for deposits during weekends and peak seasons.

Explain why you use reservation deposits

Offering a simple explanation about why you require restaurant deposits can help guests be more decisive when paying the deposit.

Frequently Asked Questions About Restaurant Deposits

Should you impose a restaurant deposit policy?

It depends. Many venues take deposits for peak days, weekends, or large groups to reduce no-shows and secure revenue.

When should a restaurant require deposits?

For busy nights, holidays, special events, or when seating is limited.

What does deposit upon booking mean?

Guests must pay a set amount when booking to confirm their reservation.

How much should a restaurant deposit be?

Typically 10-30% of the expected bill, or a fixed per-person/table fee.

Can you refund a restaurant deposit?

Yes, based on your cancellation policy. Refunds usually apply if guests cancel within the free-cancellation window.

Do deposits help reduce food waste?

Yes, accurate guest counts help you order the right amount of fresh produce.

Is it legal for a restaurant to charge a reservation fee or deposit?

Yes, in most countries. Deposits are deducted from the bill or refunded upon arrival, per your policy.

What is a cancellation fee?

A fee charged when guests cancel after the free-cancellation window.

What is a no-show fee?

A fee charged when guests fail to show without canceling.

Wrapping it up

Whether you manage a stand-alone venue or a multi-location restaurant, reservation deposits can be a powerful way to secure revenue in advance, reduce no-shows, and protect your margins.

The key is transparency; clearly explain your policy, make it easy for guests to pay, and ensure their information is secure.

With Servme’s Payments module, you can:

  • Collect deposits, prepaid bookings, and no-show fees online
  • Accept payments directly from Google Reserve, Instagram, Tripadvisor, Zomato and more
  • Automate reminders so guests never forget their booking
  • Track and report deposit revenue effortlessly

Ready to start securing advance revenue and eliminating no-shows? Book a Free Demo and see how Servme can help you set up restaurant deposits in under 24 hours.