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Being charged for cancelling a reservation...


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I don't think it is fair to generalize and disparage certain professions. I am a physician and I don't charge my patients for no-shows(despite losing 100% value for my time)because it generates loss of good will

That's noble and extremely understanding and kind of you, but in this city and many others, it's common practice to charge for "no-shows". My apologies if I offended you. I certainly didn't mean to disparage anyone or any particular profession. This goes for the doctor's office as well as the masseuse as well as the rent-a-car as well as the hotel room. I simply used that example as a group that often will charge it on the flip side of the coin and then bitch and moan when they are at the receiving end of the charges.

As a considerate person who always honors my committments when making or cancelling dinner reservations, I can understand why a popular restaurant would want to use the threat of credit card payment as a dis-incentive to no shows or last minute cancellations. Yet even Avis and Hertz extend a 59 minute grace period to clients returning their rental cars a little late.

As does the restaurant. The "grace" period is usually 20-30 minutes without a call. If you call and tell us you're stuck in traffic or the babysitter is late, we'll hold your reservation as long as is humanly possible provided you've made us confident that you really are still coming. You've self-defined as "a considerate person who always honors their commitments". You're obviously not who I'm talking about. Then again, you're also obviously the exception rather than the rule. :biggrin:

Yes. but's thats just business risk.

part and parcel of being a restaurant.

I disagree strongly with this statement. It sounds like a value judgement that simply "feeding" someone isn't as "important" as providing transportation or shelter. Restaurants that are in such demand that these things become an issue, are spending lots of payroll money to have reservationists on staff to call clients and confirm reservations several days ahead of the fact. Of course there are last minute emergencies, illnesses, etc. but I just don't see how this is any different than not making your plane flight or not showing up for your hotel room. You'd certainly expect to be charged in those circumstances, would you not? Neither the airlines nor the hotel industry are operated as charities. Is there any reason that restaurants should be? What makes the business risk of an airline or hotel more "legitimate" than that of a restaurant? If anything, the large airlines, auto rental agencies and hotels can far better afford the no-show than a restaurant that doesn't have deep corporate pockets and huge streams of revenue. Is it really asking so much to have the very lowest level of common courtesies adhered to? :hmmm:

Katie M. Loeb
Booze Muse, Spiritual Advisor

Author: Shake, Stir, Pour:Fresh Homegrown Cocktails

Cheers!
Bartendrix,Intoxicologist, Beverage Consultant, Philadelphia, PA
Captain Liberty of the Good Varietals, Aphrodite of Alcohol

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I'd check with the credit card company to see what their position is. In the US, even though some restaurants require a credit card to guarantee a reservation, only under certain circumstances will the credit card company honor the charge if it is disputed. Only American Express has a guaranteed reservation program, and they have very specific requirements that a restaurant must abide by in order for a cancellation charge to be allowed. The maxomum is $25 per person. The other credit card companies will not honor such a charge if there's a dispute.

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I'd check with the credit card company to see what their position is. In the US, even though some restaurants require a credit card to guarantee a reservation, only under certain circumstances will the credit card company honor the charge if it is disputed. Only American Express has a guaranteed reservation program, and they have very specific requirements that a restaurant must abide by in order for a cancellation charge to be allowed. The maxomum is $25 per person. The other credit card companies will not honor such a charge if there's a dispute.

I may be wrong, but I believe American Express does that to get better treatment through their Concierge Service.

John Sconzo, M.D. aka "docsconz"

"Remember that a very good sardine is always preferable to a not that good lobster."

- Ferran Adria on eGullet 12/16/2004.

Docsconz - Musings on Food and Life

Slow Food Saratoga Region - Co-Founder

Twitter - @docsconz

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Yes. but's thats just business risk.

part and parcel of being a restaurant.

I disagree strongly with this statement.

What's to disagree with?

fact of life, you pay for the fittings, lease, staff etc of a restaurant hoping to find enough custom to pay the bills - it's called business risk and is not up for debate.

it's the same risk for every restauranteur.

No shows are part of this industry, as ANY restauranteur will tell you.

Next you will be telling me a single diner should pay for 2 covers because they held the table.

As for the question at hand, I would also be keen to know how far in advance the booking was made.

Also as for this, highly dubious " a contract has been entered into stuff", guys consider the service charge. Some menu's state a discretionary 12.5/15% service charge added, others will leave out the discretionary part and tell you that a charge will be added. However this is irrelevant by law the service charge is discretionary regardless of what the restaurant tells you.

Which comes back to Labour charges and business risk, - it's not duty bound upon the customer to pay your staff.

I think it also reflects on what is actually being sold, as mentioned before, if you are not in the business of selling 'table time' I don't believe a cancellation charge is valid.

It's the key difference between a hotel room and a restaurant - in a hotel the core provision of service is to make available the room, in a restaurant, the core is the purchase of goods, preparations and discretionary service - not holding the table.

How do you measure the quantum for the cancellation, what he should have ordered? plus standard wine, water, and coffee?????

Once you have your table there is no obligation on how much you must order and spend? what if you only have water?

what if you arrive, decide you don't like the menu and leave, should you pay a cancellation charge?

So much of this falls within a restauranteurs business risk.

A meal without wine is... well, erm, what is that like?

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What makes the business risk of an airline or hotel more "legitimate" than that of a restaurant?

Nothing, but the risk is different from industry to industry - clearly.

A meal without wine is... well, erm, what is that like?

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fact of life, you pay for the fittings, lease, staff etc of a restaurant hoping to find enough custom to pay the bills - it's called business risk and is not up for debate.

it's the same risk for every restauranteur.

Of course, this argument can be turned around and still make as much sense. When a customer secures a dinner reservation with a credit card, she risks paying a fee if some unforeseen event (emergency surgery, alien invasion, change of plans) occurs and she can't make it to a phone. A risk-averse diner can simply, y'know, make reservations somewhere else. Or make last-minute plans.

How do you measure the quantum for the cancellation, what he should have ordered? plus standard wine, water, and coffee?????

Previous posts have indicated that it's usally a flat fee, of around $20. Not as much as the cost of a meal; just enough to serve as a memory aid to the patron.

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fact of life, you pay for the fittings, lease, staff etc of a restaurant hoping to find enough custom to pay the bills - it's called business risk and is not up for debate.

it's the same risk for every restauranteur.

Of course, this argument can be turned around and still make as much sense. When a customer secures a dinner reservation with a credit card, she risks paying a fee if some unforeseen event (emergency surgery, alien invasion, change of plans) occurs and she can't make it to a phone.

Yes, indeed. One afternoon my car broke down in Savannah, and although I called immediately, I paid for the room we had reserved for that night in Orlando. And for the room I had to take in Savannah. It really cut into the travel budget (Travelling on a shoestring, I was not expecting expensive repairs, either.).

Sorry, my fault, I should've informed them the day before that I was going to break down.

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In many service businesses, the customer is effectively given an option -- to show up or not to show up -- for the hotel, the airline flight, or the restaurant. In each of these cases, the vendor has a "vanishing asset": an airline seat that is not used cannot be stored for future sale. An unfilled hotel room cannot be sold again on the following night. At least some of food purchased for sale at a restaurant will be wasted, as will staff salaries.

Airlines have charged for option value for a long time. If I buy a full price ticket, I can simply no-show for the flight and turn the ticket back in for a refund. But that full price ticket may be far more expensive than an equivalent-class discounted ticket, where if I don't show up for any reason, whether or not I call in advance, the ticket is worthless. The flight, meals, etc., are the same; the difference in price is the charge for my option to not show up. The options are worth a lot to business travellers who have uncertain schedules. They are not worth much to tourists who can predict their arrival times at the airport. The tourist saves a lot of money -- paying perhaps 10% of the business traveller's fare. On the other hand, if the tourist has a car breakdown, he or she is out the price of the ticket.

Restaurants can do the same thing, by charging for no-shows or late cancellations. Hotels and rental car agencies can as well. The issue is more about industry practice than morals. Charging for option value has been common in the airline industry, for many years, and we expect to pay more for refundable tickets. For the most part, there is no common practice in the restaurant business of charging for no-shows or late cancellations. A restaurant that does so could be competitively disadvantaged versus one that gives away the no-show option.

A restaurant in high demand, on the other hand, can get away with imposing a charge for no-shows, even though its competitors don't. If I want any meal, I can choose a restaurant that doesn't ask for a credit card or charge for no-shows. If I want Gordon Ramsay or Sketch or Pierre Gagnaire, I have little choice but to follow their policy, as long as it is legal.

Jonathan Day

"La cuisine, c'est quand les choses ont le go�t de ce qu'elles sont."

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Cancellation fees exist to minimize lost revenue for the business and to encourage responsible behavior by the customers. Unfortunately, businesses that are prone to frequent cancellations or no-shows often don't have the leeway to allow for last-minute cancellations. (Well, actually, they do, but it would have to be reflected in their prices. Perhaps that's what you were referring to, Scott.)

Katherine, I'm sure your car breakdown was legit. However, if such situations routinely justified waiving the cancellation fee most people, imho, would not be terribly honest in the face of having to lose a significant amount of money and would concoct a reasonable-sounding excuse with nary a twinge of guilt.

Ideally, situations such as yours should be handled on a case-by-case basis. It would have been nice, for example, if the motel in Orlando could have issued a refund after receiving a copy of the receipts for your Savannah motel and car repair. Granted that it might be more difficult to prove justification for a restaurant cancellation. (A signed statement by the no-show babysitter? :wacko: )

I'm a clinical psychologist. When I established a strict cancellation policy (cancellation any time after setting the appointment incurred a fee of ½ the session rate), the cancellation rate dropped dramatically. I tried to be reasonable, though, and would waive the fee if we could reschedule for another time that week or if there was an understandable and documentable last-minute conflict such as a funeral.

"There is no sincerer love than the love of food."  -George Bernard Shaw, Man and Superman, Act 1

 

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Does anyone know what the credit card rules are in the UK and outside the US? Will the card companies honor no show charges? As I stated, in the US this is not the case except in limited circumstances.

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fact of life, you pay for the fittings, lease, staff etc of a restaurant hoping to find enough custom to pay the bills - it's called business risk and is not up for debate.

it's the same risk for every restauranteur.

You don't "build" the restaurant from the ground up before every shift. This is deflecting the point. No-shows are a "contollable" business risk for a restaurant, as much as is controllable by confirming reservations in advance, taking credit card numbers, charging for illegitimate no-shows, etc. (BTW - I do believe that legitimate, documentable cancellations should be handled on a case-by-case basis as was already suggested.)

Cancellation fees exist to minimize lost revenue for the business and to encourage responsible behavior by the customers (emphasis added). Unfortunately, businesses that are prone to frequent cancellations or no-shows often don't have the leeway to allow for last-minute cancellations.

Ditto. See my prior posts and above. Again, is it so much to ask that the customers show the bare minimum level of civility and common courtesy and call to cancel within a reasonable time frame? Would ANY business person in ANY industry not be upset at clients that blow off meetings, don't show up for scheduled appointments, etc.? And it doesn't just waste the restaurant's time, it wastes tangible assets (food goes to waste) and prevents the restaurant from maximizing their ephemeral offering (a seat TODAY at THIS meal at THIS time).

No shows are part of this industry, as ANY restauranteur will tell you.

Next you will be telling me a single diner should pay for 2 covers because they held the table.

Quite right, and precisely why these measures are necessary. As for charging the single diner for two covers, changing the subject or providing a satirical example isn't furthering your opinion. At least with anyone that carries it past the first step of logic. If a restaurant wishes to control that issue, all they have to do is set a policy whereby large parties or single diners are not seated at "prime time" on the busiest nights. Diner is free to make reservations elsewhere if that is unacceptable to them.

I'm a clinical psychologist. When I established a strict cancellation policy (cancellation any time after setting the appointment incurred a fee of ½ the session rate), the cancellation rate dropped dramatically. I tried to be reasonable, though, and would waive the fee if we could reschedule for another time that week or if there was an understandable and documentable last-minute conflict such as a funeral.

This is what I'm saying...

Katie M. Loeb
Booze Muse, Spiritual Advisor

Author: Shake, Stir, Pour:Fresh Homegrown Cocktails

Cheers!
Bartendrix,Intoxicologist, Beverage Consultant, Philadelphia, PA
Captain Liberty of the Good Varietals, Aphrodite of Alcohol

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There is a large sign in my Dentist's waiting room: "Patients missing their appointments without 24 hours notice will be charged for a visit."

As as been previously said, it really is about courtesy and civility. I am reminded of the boors who eat at self-service restaurants and leave their table looking like several 5-year olds had at it, with food, napkins and a mess all over. (And no tip for the bus help!) You can always tell the persons with proper courtesy who clean up their own mess and leave the tables relatively clean!

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fact of life, you pay for the fittings, lease, staff etc of a restaurant hoping to find enough custom to pay the bills - it's called business risk and is not up for debate.

it's the same risk for every restauranteur.

You don't "build" the restaurant from the ground up before every shift. This is deflecting the point. No-shows are a "contollable" business risk for a restaurant, as much as is controllable by confirming reservations in advance, taking credit card numbers, charging for illegitimate no-shows, etc. (BTW - I do believe that legitimate, documentable cancellations should be handled on a case-by-case basis as was already suggested.)

Cancellation fees exist to minimize lost revenue for the business and to encourage responsible behavior by the customers (emphasis added). Unfortunately, businesses that are prone to frequent cancellations or no-shows often don't have the leeway to allow for last-minute cancellations.

Ditto. See my prior posts and above. Again, is it so much to ask that the customers show the bare minimum level of civility and common courtesy and call to cancel within a reasonable time frame? Would ANY business person in ANY industry not be upset at clients that blow off meetings, don't show up for scheduled appointments, etc.? And it doesn't just waste the restaurant's time, it wastes tangible assets (food goes to waste) and prevents the restaurant from maximizing their ephemeral offering (a seat TODAY at THIS meal at THIS time).

No shows are part of this industry, as ANY restauranteur will tell you.

Next you will be telling me a single diner should pay for 2 covers because they held the table.

Quite right, and precisely why these measures are necessary. As for charging the single diner for two covers, changing the subject or providing a satirical example isn't furthering your opinion. At least with anyone that carries it past the first step of logic. If a restaurant wishes to control that issue, all they have to do is set a policy whereby large parties or single diners are not seated at "prime time" on the busiest nights. Diner is free to make reservations elsewhere if that is unacceptable to them.

I'm a clinical psychologist. When I established a strict cancellation policy (cancellation any time after setting the appointment incurred a fee of ½ the session rate), the cancellation rate dropped dramatically. I tried to be reasonable, though, and would waive the fee if we could reschedule for another time that week or if there was an understandable and documentable last-minute conflict such as a funeral.

This is what I'm saying...

Katie,

I find it odd you accuse me of twisting things, to my mind the reverse is true.

It sounds like you do not appreciate how these things are conducted in the UK.

Most restaurants do not levy a cancellation charge, including the hardest table of all, 'The Ivy'. If you haven't caught up:

1. we don't know how much this guy was charged

2. he DID ring and cancel

3. you might want to control your risk, but it doesn't make it LEGAL.

As for your suggestion that a single diner should pay for 2, well, you can't be serious - are you ????? :raz: It is not a satirical example, it's an example of specific business risk to the restauranteur, a risk that is essentially unique.

As Glenn points out that cancellation charges are not honoured in the US by card providers, and I'll bet they're not honoured in the UK. Which could tell us something about the legitimacy of these tolls. Few business are as Legally savvy as visa!

A meal without wine is... well, erm, what is that like?

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What a fascinating discussion! It's unfortunate that the moral high ground is primarily being considered re the customer's actions. rshorens's point about good will seems equally important. And levying an arbitrary charge for a booking, where the potential income from that annulled booking may well be derived from subsequent occupation of the table, hardly seems to have any positive 'moral' value (regardless of the value of the charge). I rather get the feeling that some people think it perfectly fine to screw over a customer if inconvenience is involved -- I would have thought a 2pm cut-off was pushing the deadline for 'timely' somewhat, and could presumably act as a disincentive to customers... which means the restaurant screws itself over too.

Debate about the legal situation seems pointless, as the British position appears to be quite clear in this regard. As neither British nor American, I come away from the discussion feeling like I'm seeing culture-clash in action (though the divide is not entirely Atlantic :wink:)... which isn't to say my cultural bias isn't showing! :blink:

Duncan.

-- lamington a.k.a. Duncan Markham

The Gastronomer's Bookshelf - collaborative book reviews about all things food and wine

Syrup & Tang - candid commentary and flavourful fancies

"It's healthy. It's cake. It's chocolate cake."

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As Glenn points out that cancellation charges are not honoured in the US by card providers, and I'll bet they're not honoured in the UK.  Which could tell us something about the legitimacy of these tolls.  Few business are as Legally savvy as visa!

Scott, I should point out that I emphatically do not agree with the policy of the credit card companies, or lack of. I don't understand why restaurants reservations should be considered any different than hotel reservations, etc. However, I think Amex has developed a fair and equitable policy for both the customer and the establishment. The maximum no show charge is $25 pp. [either side can make an argument for it being too much or too little.] The policy must be clearly stated to the customer and he/she must be told up until what time he/she has to cancel the reservation. The program must be submitted by the establishment to Amex and approved by them. My guess is that this is not much different than other service industries, like hotels.

As for the other card companies not honoring no show charges, our credit card processor (for MC and Visa) has told me that it is virtually impossible for MC and Visa to come up with a policy because the individual banks have their own policies. These policies are generally geared in favor of the consumer. Pissing off the consumer would be bad business, while they couldn't care less if they piss off the establishment.

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Debate about the legal situation seems pointless, as the British position appears to be quite clear in this regard. As neither British nor American, I come away from the discussion feeling like I'm seeing culture-clash in action (though the divide is not entirely Atlantic :wink:)... which isn't to say my cultural bias isn't showing! :blink:

Duncan.

The moral argument should not get mixed up with the legalities. Just because it may be legal to charge a no show charge, it doesn't mean the restaurant has to do so. In principle, I agree with Clerkenwellian when he states that it's not fair for him to get charged if the restaurant is able to fill the reservation. In reality though, it might mean an extra expense or hassle on the restaurant's part to fill that reservation and keep track of every customer that did such a thing. If the reservation is cancelled within a reasonable time for the restaurant to fill the table without undue burden -- whch is subjective -- from a moral standpoint, then no, the customer should not be charged no matter what the policy or law. It's just bad business.

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I don't understand why restaurants reservations should be considered any different than hotel reservations, etc.

I don't understand why anyone thinks a hotel policy is even the slightest bit relevant!

They are different industries, that drive revenues in different ways.

Airlines too - irrelevant.

A meal without wine is... well, erm, what is that like?

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Apart from the many valid legal, moral, and business issues discussed in this thread, I find it ironic that the restaurant in question("rhymes with kvetch") was the source of this issue. I had read about this restaurant extensively in the UK thread last fall and was intrigued enough to check out the restaurant on my trip to London in November. We stopped in one afternoon to find the location and look around. We spoke to a pleasant server in the bar, who explained about the different sections and their hours of operation. Then we came back with our daughters to have drinks and a snack after a show and were not admitted by the bodyguard-looking men at the door because we weren't members of the club and we didn't have reservations. Noone ever mentioned this on the egullet thread or at the restaurant itself. They wouldn't even let my daughters take a peek at the decor through a partly opened front door. My impression after all this was that the management was arrogrant. I'm not surprised they charged Clerkenwellian when he cancelled at 3! They're not at all interested in good will. I wonder how their business will fare by this time next year.

Roz

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Then we came back with our daughters to have drinks and a snack after a show and were not admitted by the bodyguard-looking men at the door because we weren't members of the club and we didn't have reservations.

Too bad they didn't have any cancellations! :biggrin:

John Sconzo, M.D. aka "docsconz"

"Remember that a very good sardine is always preferable to a not that good lobster."

- Ferran Adria on eGullet 12/16/2004.

Docsconz - Musings on Food and Life

Slow Food Saratoga Region - Co-Founder

Twitter - @docsconz

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Then we came back with our daughters to have drinks and a snack after a show and were not admitted by the bodyguard-looking men at the door because we weren't members of the club and we didn't have reservations.

Too bad they didn't have any cancellations! :biggrin:

Touche!(I hope I spelled this right..don't have a French keyboard for the accent)

Roz

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The legal position? A "penalty" (an agreement for a party in breach to pay an amount which doesn't relate to the other party's loss) has long been considered repugnant under English contract law and is unenforceable. Whether both parties purport to agree is irrelevant - a penalty is always unlawful. This species of cancellation fee is probably also an "unfair term" under the Unfair Terms in Consumer Contracts Regulations 1999 and if so you could in theory refer to the OFT (although I'm a bit rusty on this point). Full disclosure: I'm a lawyer and, whilst I (unaccountably) don't specialise in restaurant litigation, this is all pretty basic English contract law.

The moral position? When a customer telephones with a cancellation and the restaurant later fills the table and loses no money, what on earth is the moral justification for charging a cancellation fee?

Those who claim I'm morally bound by my acceptance of a cancellation fee over the phone seem to accept the restaurant's curious definition of what a "cancellation fee" is. In my mind, the cancellation fee I agreed to over the 'phone was to compensate the restaurant for lost trade, not to entitle them to money for nothing. If they had told me their view of the fee (i.e. basically a fine for naughty customers who cancel too late, and nothing to do with their economic loss) I would not have made the reservation. I don't think I'm morally bound to pay any more than I'm legally bound to pay.

The bottom line is that the cancellation fee is only £20 per person, which makes it petty rather than greedy. But I do feel irked, and shall send a polite fax and report back.

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The moral position? When a customer telephones with a cancellation and the restaurant later fills the table and loses no money, what on earth is the moral justification for charging a cancellation fee?

Exactly what I was trying to say. Emphasis was being put on the customer lacking the moral high ground, yet some people strangely didn't feel there was anything wrong with the restaurant's actions.

Good luck Clerkenwellian! Keep us posted.

-- lamington a.k.a. Duncan Markham

The Gastronomer's Bookshelf - collaborative book reviews about all things food and wine

Syrup & Tang - candid commentary and flavourful fancies

"It's healthy. It's cake. It's chocolate cake."

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