Deposits vs card holds: which cuts no-shows without scaring off regulars

The two options

Deposit

The customer pays an amount at booking, say £10 a head. It is taken from their card there and then. When they turn up, it comes off the bill (or is refunded, or is treated as a pre-payment). If they do not turn up, you keep it.

Card hold

The customer enters a card at booking but nothing is taken. The card is held, in the way a hotel holds a card at check-in. If they turn up, nothing happens. If they do not, you charge a no-show fee, say £10 a head, up to a stated limit.

What each does to no-shows

Both cut no-shows hard. Once someone has a financial stake, "we forgot" and "we booked three places" mostly disappear, and the people who would have vanished now cancel instead, which frees the table. Deposits tend to cut slightly more than holds, because the money has already left the customer's account and turning up is how they get value for it. Holds cut nearly as much, because the threat of a charge is enough for almost everyone.

What each does to bookings

This is where they differ. A deposit is friction at the moment of booking. Someone thinking about a Tuesday dinner sees "pay £20 now to book" and a proportion go elsewhere, or phone instead, or just do not bother. That proportion is bigger than most owners expect, and it is biggest for exactly the casual bookings that fill quiet nights.

A card hold is less friction. Entering a card with "nothing will be charged if you turn up" is something people are used to from hotels and car hire. Fewer drop off. But some still do, particularly older customers and people who simply do not trust an unknown restaurant with their card details.

What each does to regulars

Regulars are the ones who notice. Someone who has eaten with you every month for three years and is suddenly asked for a deposit will, at best, think it is a bit much and, at worst, feel accused. A card hold reads slightly better because nothing is taken, but the message is the same: we do not trust you. The fix is not to choose between deposit and hold; it is to not apply either to small parties and regulars in the first place.

The practical answer for most independents

• Parties of 1 to 5: no card. Reminder email the day before, one tap cancellation, and a line on the booking page about letting you know. This is where most of your bookings are and where the cost of friction is highest.
• Parties of 6 or more: card hold with a stated no-show fee per head. Big groups are where the damage from a no-show is, and organisers of groups expect it.
• Christmas, Valentine's, tasting menus, events: deposit, per head, taken off the bill. Everyone expects it on those dates and the pre-payment protects a night you cannot re-sell.
• Repeat no-shows: card hold for that phone number or email regardless of party size. You have the history; use it on the people who earned it.

How much to charge

Enough to matter, not enough to feel like a fine. £10 a head is the common figure for a hold or deposit at an independent; £20 to £25 a head for a Christmas party or tasting menu where the food cost is real. State it plainly on the booking page and in the confirmation. A charge nobody was told about is a chargeback and a one star review.

Things people get wrong

• Charging holds too eagerly. If someone cancels an hour before, charging them the full fee will cost you a customer. Give a grace period, say cancellations up to 24 hours are free, and use judgement for the rest.
• Forgetting the card expires. Holds are only valid for a limited time. A hold placed in September for a booking in December may have lapsed. Systems handle this in different ways; make sure yours does something sensible.
• Deposits with no easy refund. If the customer cancels in good time, the deposit should go back automatically. If refunds mean phoning you, you have just recreated the problem you were trying to solve.
• Applying it to walk-ins added by staff. Obviously not, but some systems do by default.

What we are building

Tablez will offer both deposits and card holds, coming soon, with these rules: you set them per party size and per date, so small parties and regulars are left alone by default; the amount and the cancellation window are shown on the booking page and in every email; refunds for in-time cancellations are automatic; and the amount is shown in your own currency, because Tablez works anywhere in the world. There will be no per booking fee from us on top of the card processing cost, because we do not charge per cover on anything.

Until then, the free things do most of the work. Confirmation and reminder emails with a manage link are on every Tablez plan, and staff approved mode lets you phone big groups before you confirm them. Our guide to reducing no-shows goes through the full list.

Related: Tablez features and pricing.