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Being charged for cancelling a reservation...


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The contract will be legal and binding; but the particular term relating to the penalty (if such it is) will not be enforced. However in this case, it seems to be reasonable as an estimate of loss so it probably is valid. (IANAL)

The Court of Appeal doesn't agree with you: "[a penalty clause] will not be enforced... beyond the sum which represents [the] actual loss" (Jobson v Jobson (1989)).

If the restaurant was (as is likely to be the case) full on the night in question, then the only actual loss resulting from the cancellation will be the administrative costs of making/cancelling the reservation. I find it hard to believe these amount to £20 per cover, where the average per person bill is around is £50.

Jobson v Johnson, not Jobson v Jobson. But what do those saps know about anything. I'll take this to the House of Lords :wink:.

I'll take your word for it. I really am not a lawyer.

So in summary even if it is a reasonable pre-estimate of the loss,

if it exceeds the actual loss, then it willl not be enforceable in full? You learn something every day.

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Does anyone really not believe that no shows are a huge cost to restaurants?

It would be stretching a point to call this particular incident a "no show" as a cancellation call was made. My understanding of a no show is when the party fails to turn up and does not advise the restaurant in advance.

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It would be stretching a point to call this particular incident a "no show" as a cancellation call was made. My understanding of a no show is when the party fails to turn up and does not advise the restaurant in advance.

I was speaking generally and not referring to the incident here, which was clearly not a no show.

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I can't believe I read through the 3rd page. Now I know why I could never be a lawyer.

Anyway, painting this as a legal matter is missing the point, and also missing the more practical solution. This is actually a PR issue--as are indeed many of these issues. A miffed customer, having exhausted the polite venues, should go to the press before going to a lawyer. That's a threat that can really make an impact!

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The contract will be legal and binding; but the particular term relating to the penalty (if such it is) will not be enforced. However in this case, it seems to be reasonable as an estimate of loss so it probably is valid. (IANAL)

The Court of Appeal doesn't agree with you: "[a penalty clause] will not be enforced... beyond the sum which represents [the] actual loss" (Jobson v Jobson (1989)).

If the restaurant was (as is likely to be the case) full on the night in question, then the only actual loss resulting from the cancellation will be the administrative costs of making/cancelling the reservation. I find it hard to believe these amount to £20 per cover, where the average per person bill is around is £50.

Jobson v Johnson, not Jobson v Jobson. But what do those saps know about anything. I'll take this to the House of Lords :wink:.

You got me. My memory's not what it was - shall consider suing the Tanqueray gin company.

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Ignoring the legal aspect of this, and addressing Hest88's point that its a PR issue,EVERYTHING we do is a PR issue.The only thing this restaurant did wrong is not tell the customer what the charge would be.If they had done that, then i would back them 100%.As it is, they come across as money grabbing.

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It would be stretching a point to call this particular incident a "no show" as a cancellation call was made. My understanding of a no show is when the party fails to turn up and does not advise the restaurant in advance.

I was speaking generally and not referring to the incident here, which was clearly not a no show.

Glenn, thanks for the clarification. I'd misinterpreted your comments, which in a general context I am in total agrement with.

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I had a reservation at a certain popular London restaurant. When I booked I gave my credit card details on the understanding they'd make a cancellation charge if I cancelled at short notice.

My dining companion's travel plans changed, so I just called to cancel.

Of course I don't know the full situation here (ie, how much was charged, etc) but I have had a discussion about no-shows with two maitre d's of Michelin starred restaurants in London, so I guess I see it from both sides of the fence.

I would think that a certain degree of common sense needs to prevail in these situations. I find as a regular customer in a number of eateries there is never any problem - they know you, they know you're going to turn up, they don't want to lose you as a regular customer by applying a charge to you.

But increasingly there is a really outrageously selfish habit going around where people will book up more than one venue in advance, but of course only turn up to one of them, depending upon their whim on the day. By having a credit card number, at least they have some kind of assurance.

One of the worst cases I've heard of is when a restaurant reviewer for a national rag had a freebie meal offered by a Michelin starred restaurant at his convenience and simply didn't turn up. The restaurant has no comeback. One less cover available for a real paying customer. The rest of us end up paying.

In addition, third parties who call up on behalf of customers are also notoriously unreliable, AMEX being the worst, with hotels coming in a close second.

The restaurant has to make an educated guess from experience as to the no-show rate on a given sitting and I would guess that there is probably little difference between this and the rife over-booking you have on aeroplanes.

Also worth considering is that the restaurant in question will figure out how many staff it will need on a given day, and so these no-shows mean that there is a cost associated with it. Either that cost goes on a credit card guarantee or it is soaked up in higher menu prices for the customers who actually _do_ show.

One of the maitre d's I spoke to explained that much as they would love to have a policy asking for credit cards, it had a downside effect in that people feel offended at having to provide these details, and will sometimes not make a reservation if they have to provide these details. Perhaps these same people who are 'offended' are the very same who are booking up two or three different places.

FWIW, I have never failed to make a restaurant reservation myself. I have had two instances where the booking was placed on the wrong date by the restaurant themselves. I turn up, no reservation showing for me on that day, despite booking earlier on the same day! Then I get a call two weeks or a month later asking if I'm going to turn up.

I always call if I am going to be late (over 15 minutes). It's a common courtesy IMHO.

Despite this I would have hoped that common sense could be applied to any credit card pre-booking policy. If you booked at 2pm and then cancelled at 3pm, common sense would suggest to me that their should be no charge. After all, any charge under these circumstances is only going to alienate the customer.

Cheers, Howard

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All I've got to say is that when you entered into the agreement with them (they'd hold the table for you; you'd cancel by 2pm in order to avoid a cancellation charge if you weren't coming), I feel pretty certain that you expected them to hold up their end of the bargain, right?

I don't understand why rappers have to hunch over while they stomp around the stage hollering.  It hurts my back to watch them. On the other hand, I've been thinking that perhaps I should start a rap group here at the Old Folks' Home.  Most of us already walk like that.

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All I've got to say is that when you entered into the agreement with them (they'd hold the table for you; you'd cancel by 2pm in order to avoid a cancellation charge if you weren't coming), I feel pretty certain that you expected them to hold up their end of the bargain, right?

For the zillionth time:

I was perfectly willing to pay the charge if the restaurant lost money as a result of my cancellation. But if every table was full that evening (as was most likely the case) it suffered little or no loss and it is not fair or justifiable for me to pay £40. Thus my indignant spluttering.

That has always been my understanding of how cancellation charges work, and most people here seem to agree.

It works both ways: if the restaurant had cancelled on me, but I found an equally good table elsewhere for minimum hassle/expense, then I don't think it would be right for me to claim any recompense from the restaurant. Everybody is entitled to be treated fairly and not to lose out as a result of somebody else's breach of contract, but no-one is entitled to a windfall at another's expense. This seems me both moral and sensible. The fact the law works the same way is a happy accident.

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All I've got to say is that when you entered into the agreement with them (they'd hold the table for you; you'd cancel by 2pm in order to avoid a cancellation charge if you weren't coming), I feel pretty certain that you expected them to hold up their end of the bargain, right?

For the zillionth time:

I was perfectly willing to pay the charge if the restaurant lost money as a result of my cancellation. But if every table was full that evening (as was most likely the case) it suffered little or no loss and it is not fair or justifiable for me to pay £40. Thus my indignant spluttering.

That has always been my understanding of how cancellation charges work, and most people here seem to agree.

It works both ways: if the restaurant had cancelled on me, but I found an equally good table elsewhere for minimum hassle/expense, then I don't think it would be right for me to claim any recompense from the restaurant. Everybody is entitled to be treated fairly and not to lose out as a result of somebody else's breach of contract, but no-one is entitled to a windfall at another's expense. This seems me both moral and sensible. The fact the law works the same way is a happy accident.

Clerkenwellian, with all due respect -- I disagree with the general assumption that the restaurant does not lose money from a cancelled reservation (or one that is not cancelled in compliance with the restaurant's policy) if in the end the restaurant is filled. The various charges that are associated with cancelled reservations, aside from lost revenue, have been discussed. How do you respond to that?

This is more an academic exercise. From the details you have provided, I lean towrards taking your side and think it's just plain bad business on the restaurant's part to enforce their policy no matter what.

As another restaurauteur mentioned (basildog?), his restaurant doesn't take credit card guarantees because the public is antsy about giving out this info for a restaurant reservation. That is true in NYC also, at least to the best of my knowledge. Only the higher end restaurants can get away with it easily. This only hurts everyone. The restaurant will suffer because of no shows or late cancellations and the public will suffer because the restaurant has to overbook in order to account for no shows.

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Clerkenwellian, with all due respect -- I disagree with the general assumption that the restaurant does not lose money from a cancelled reservation (or one that is not cancelled in compliance with the restaurant's policy) if in the end the restaurant is filled.  The various charges that are associated with cancelled reservations, aside from lost revenue, have been discussed.  How do you respond to that?

I accept there will be minor administrative costs associated with cancelling one booking and making another. But it is not remotely credible that these administration costs will come to £20 per head (particularly in the context of an average bill of £50 per head).

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I accept there will be minor administrative costs associated with cancelling one booking and making another. But it is not remotely credible that these administration costs will come to £20 per head (particularly in the context of an average bill of £50 per head).

Again, speaking strictly in the hypothetical and not your situation -- it's not practical for a restaurant to have a sliding scale of charges for non-compliance with their policy. I go back to a previous example I used, but let me extend it -- if there were 10 no shows/late cancellations, and the restaurant was not able to fill any of them, from what I gather, you say it's ok to charge the custoemrs. But what if there were 10 no shows and the restaurant filled 8 of them, which customers should get charged for not showing and which ones shouldn't? I suppose there's a formula that can be arrived at, but that is adding a rather large burden on the restaurant. And if the restaurant was booked regardless of no shows, you say there should be no fee or a very minor one. But it's not that simple. For example, many restaurants turn tables more than once per evening. If a table sat empty for 20 minutes because it was being held for a reservation, and then it was filled by a walk-in, perhaps that table was only turned 2 times instead of 3. So "booked" is a relative term.

In a nutshell, it is an undue burden and unfair to ask that a restaurant vary their policy for every situation. While I think common sense should prevail, as long as the restaurant's policy is clear cut, then it should be accepted. Again, I am not talking about your situation where you say the policy was not explained properly.

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I don't take credit card numbers as i does put peoples backs up, and i would rather not do that to customers untill we meet.My point about backing the restaurant if they had mentioned what the charge would be, was based on the idea that if you have a policy, then you should stick to it, otherwise whats the point? I don't think the policy is a good one, but if you were told thats what would happen, then bloody do it.I don't think they will charge you, as they probably feel that it would not reflect well on them, bad PR etc etc, which just shows what a stupid policy it is.

Just as an aside, restauranters have long memories.Yesterday i had a call from a guy who booked a table over 18 months ago and didn't show up.Guess what, we were fully booked on the night he wanted :wink::wink: and we will be untill hell freezes over.

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Just as an aside, restauranters have long memories.Yesterday i had a call from a guy who booked a table over 18 months ago and didn't show up.Guess what, we were fully booked on the night he wanted :wink::wink: and we will be untill hell freezes over.

And may your establishment still be around and flourishing when that comes about!

Michael aka "Pan"

 

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Does anyone really not believe that no shows are a huge cost to restaurants?

It would be stretching a point to call this particular incident a "no show" as a cancellation call was made. My understanding of a no show is when the party fails to turn up and does not advise the restaurant in advance.

No one has mentioned another force in this little drama - the people who *didn't* get a reservation because of the person who made the reservation first - but canceled.

I will be in London in the spring - and I want to eat at Gordon Ramsey on 5/28 (my husband's birthday). So I will try to get on the phone 1 month in advance to make that reservation. And it would make me very mad if I couldn't get the reservation I want - but 1/3 of the people who did get reservations did so on "spec" (perhaps they'd eat there that night - perhaps they wouldn't). By the way - just bought theater tickets for another night - and in that arena - it's simply "no refunds - do not ask". Robyn

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Clerkenwellian, with all due respect -- I disagree with the general assumption that the restaurant does not lose money from a cancelled reservation (or one that is not cancelled in compliance with the restaurant's policy) if in the end the restaurant is filled. The various charges that are associated with cancelled reservations, aside from lost revenue, have been discussed. How do you respond to that?

Glenn,

that is absolute, utter tosh.

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

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No one has mentioned another force in this little drama - the people who *didn't* get a reservation because of the person who made the reservation first - but canceled.

Robyn,

you make a good point, though perhaps it can add something.

The odd thing is that few restaurants actually bother to call up their 'waitlist' in place of a cancellation or no show. that table goes to the next person to ring or show up.

the credit card gives them no incentive to ring the waitlist, and surely you must act to mitigate your losses. incidentally, many, many non CC restaurants don't ring the wait list either.

If you don't follow up your wait list, how important is a cancellation in the bigger picture really?

Now, no doubt someone will be argue overly that this does not happen, they will be wrong, but that's another story.

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

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Now, no doubt someone will be argue overly that this does not happen, they will be wrong, but that's another story.

I'm humbled by your perceptive insight.

odd, but revealing that you somehow think it was directed at you?

It was a general point, that there are those that do not seem to understand how a restaurant actually works, but rather how they think it might, or should work.

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

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Nope, I realized it was a general statement. I'm just amazed that you have taken it upon yourself to be the all-knowing spokesperson on this issue and anyone with a different opinion is speaking "tosh". You've made several statements and assertions which you deem to be factual. Can you offer proof or some sort of validation of your latest statement?

The odd thing is that few restaurants actually bother to call up their 'waitlist' in place of a cancellation or no show.  that table goes to the next person to ring or show up. 

the credit card gives them no incentive to ring the waitlist, and surely you must act to mitigate your losses.  incidentally, many, many non CC restaurants don't ring the wait list either.

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Nope, I realized it was a general statement. I'm just amazed that you have taken it upon yourself to be the all-knowing spokesperson on this issue and anyone with a different opinion is speaking "tosh".

Glenn,

perhaps you'd care to disprove? after all your NYC experiences are particularly relevant to the running UK restaurants.

as for Tosh - nice twist, that garbage about admin costs for a cancellation is utter fiction. do you pay a receptionist extra cash for a cancellation and re-organising a table plan? does it cost more to cancel at 3:00 and not 2:00? is there any evidence of a single penny extra in costs to the business about rearranging things? it's called being in business.

tosh is as polite, if not more so than that assertion deserves.

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

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Scott, tosh you. :-)) Seriously, this discussion is degenerating and I'm backing off. I qualified my comments several times by saying I was speaking generally, i.e., not necessarily about the UK. And the proof of your argument is that I can't disprove it? Yikes. [it so happens I intuitively agree with your last statement, but I highly doubt it can be proven one way or the other.]

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