Restaurant no-shows: Their impact and how to prevent them

Unless you’ve been camped out in the deep Arctic, avoiding restaurant industry news and social media altogether, chances are you may have heard about the recent scandal surrounding OpenTable in Chicago.

Here is what happened. Earlier this year, there was an unusual spike in no-shows at many restaurants in Chicago on some of the most important days of the year. No-shows are typical, but in this case, it was suspicious because all victims shared something in common; they all switched from using OpenTable to Reserve. The number of no-shows was bizarrely high that it alerted Reserve to investigate. It turned out that a rogue employee from OpenTable made hundreds of fake reservations at 45 Chicago restaurants.

Not long after the truth was exposed, OpenTable put out an open letter apologizing to the Chicago restaurant community and explaining the incident. Without naming names, they said they “terminated the employee within 48 hours”. The incident however raised more questions; was it really the unidentified employee with no financial incentives who was behind the scandal? Should we just accept that "no shows" are unavoidable or should we consider them to be preventable and an occasional occurrence?

It’s futile to dig into the true story behind the scandal, but the incident revealed the growing concern of restaurant operations about no-shows. Many chefs including Damian Wawrzyniak regularly use Twitter to express their frustrations towards no-shows.

No-shows are a subject often discussed but have never been addressed properly in terms of having a resolution. Perhaps it’s because customers have little knowledge about the dynamite impact it has on restaurants. Firstly, there is ample stock of fresh food and ingredients that would most likely end up in the garbage as a result of customers not turning up for their booking. Secondly, there is the floor staff, who are all suited up ready to be summoned only to discover that there’s no need to be on standby. Thirdly, there are the walk-in guests who get turned away due to an empty “full house”.

If no-shows are detrimental to the business, what measures can be taken to prevent them? Although it’s almost impossible to completely eliminate no-shows, we can definitely put out some safety measures.

Here are the following tips to help you minimize no-shows and last minute cancellations at your restaurant:

Send Reminders

People are so busy they tend to be forgetful. What they need is a little nudge. Sending them a reminder of their booking a day or even a few hours before their reservation could reduce the number of no-shows.

TableCheck's restaurant management platform has a built-in feature that managers can activate to remind customers of their booking prior to their visit.

Track repeat offenders

Has someone missed a reservation for two, three, or maybe even four times? You don’t need a detective to figure out who the repeat offenders are. All you need is a customer database where you can keep an attendance sheet of your customers. This way you can easily hunt down the ones who repeatedly cancel at the very last minute, so the next time they try to make a booking you can turn them down without hesitation.

Credit Card Authorization

This is very different than credit card payment. To put it simply, this act is depositing. The restaurant sets an amount that will be processed by credit card when customers make a reservation. The processed amount is held by the payment processor and will not be released until the guest's visit. If in any case, the guests decide not to turn up for their appointment you have every right to release the full or partial hold amount to compensate your loss.

Prepayment

Nothing is safer than being able to lock in that money before your customer visits, that’s why prepayments are considered to be the safest option when it comes to cancellation damage control. Prepayment works in the same way as buying a movie or a flight ticket, the customers choose their meal and make the full purchase right when they make the reservation. Installing prepayment options will require adding a payment gateway to your online reservation site or alternatively consulting your existing restaurant system service provider to see if you can add on this feature.