credit card guarantees

[southern girl]

This is inspired by the FL thread in the California board. I just got caught by the good old credit card guarantee...But, not for being a no show...

I reserved a table for two at the Herbfarm just outside of Seattle. I got the reservation by way of a cancellation. There policy is $50 per person to hold the seats. Refundable outside of 30 days or if they can rebook the table. I mentioned to the reservationist it was possible that I would be one instead of two...due to my guest's obligations with the PGA Tour event we were in town for. She already had my credit card number at this point...and informed me if he no showed I would be charged the extra $50 even though I would be there, since we were inside the 30 day period. Personally I think this is a bad practice...and not just because I got whacked for the $50. How pleased would you be if you were a party of 4...and your two guests have to cancel due to say, a family emergency. The other two still go and get nailed for the extra $100. You are stuck...you can't say to your friends...hey could you give me $100 since you won't be coming because your Grandmother died...I had to put down a guarantee. Part of my objection is they have 3 tables for European style dining (32 seat total)...so per say they were not "losing " a table. I realize the objective is to fill the seats and make money. But, I think perhaps this rigid (and costly to the unfortunate host who's guest has to cancel) does them more harm than good.It does not leave a good taste in one's mouth. The restaurant had at least 8 empty seats the night I went.

How do you feel about guarantees. Personally, I do not mind guaranteeing. I do mind the 30 day clause. I think 4 pm day of, is fair. If the restaurant is that good (which in this case I thought it was) they will have people waiting for tables...emergencies and problems do crop up at the last minute. The no show who books 4 reservations for the same night and doesn't call to cancel deserves to pay up IMO.

[glenn]

30 days seems unreasonable to me. And if the restaurant is that good, they shouldn't need the 30 day clause.

More power to restaurants who can get away with guaranteeing reservations in such a manner. Your average place wouldn't stay in business long with such a policy. In any event, I suspect that the restaurant's policy might be outside credit card regulations. As far as I know, master card and visa will not honor the restaurant's charge. The last time I looked into guaranteeing reservations with Visa/MC (I think for New Year's), they said they would not honor the charge if the customer disputed it, whether or not there was a signed guarantee. On the other hand, American Express will honor guarantees as long as you signed something to the effect and that the restaurant meets some other criteria. In any event, it can't hurt to dispute the charge.

[Fat Guy]

I think it gets back to the point we were making elsewhere about expectations. People (and credit card companies) simply have a different set of expectations when it comes to restaurant reservations as opposed to theater tickets, airline reservations, etc. Southern, if you took that scenario but changed it to revolve around theater tickets most people wouldn't raise an eyebrow, yet it seems shocking when a restaurant does it. I'm shocked too. But why? I think it has to do with what the norm is in the industry. Here you have a restaurant going against the norm, so it seems like a big deal.

[glenn]

FG, I didn't notice any other discussion, but I agree that people's expectations are different when it comes to restaurants. However, in this instance, I think a 30 day clause, whether it's a restaurant or hotel or whatever, is unreasonable unless such a cancellation caused the business to lose revenue.

[ngatti]

Glenn, I think that if the charges were disputed thay'd be voided. I don't think (just based on pereipheral scuttlebutt) that restaurants can aactually charge your credit card for this.

Anybody out there with more precise info?

ediot. Teach me to scan rather than read. Thanks Glenn

Nick

[Rail Paul]

I think it gets back to the point we were making elsewhere about expectations. People (and credit card companies) simply have a different set of expectations when it comes to restaurant reservations as opposed to theater tickets, airline reservations, etc.

You raise an interesting point here, FG, and it deserves elaboration.

There is a contract, as the restaurant took a non-refundable deposit in return for an agreement to provide a specific service. If an airline or hotel accepts a reservation and charges your CC, you have rights should they find themselves overbooked. You wouldn't expect your numbered theater ticket has been sold to 5 or 10 people, would you?

Of course, the shoe is on the other foot when the restaurant accepts your reservation and still makes you cool your heels for an hour because THEY overbooked. I'd be willing to consider a premium for guaranteed accomodations at the time previously specified, even though I shouldn't have to.

Why shouldn't the restaurant comp you for their inability to forecast demand?

[mamster]

I reserved a table for two at the Herbfarm just outside of Seattle. I got the reservation by way of a cancellation. There policy is $50 per person to hold the seats. Refundable outside of 30 days or if they can rebook the table. I mentioned to the reservationist it was possible that I would be one instead of two...

If you need an additional guest for the Herbfarm, ask on Pacific Northwest and ye shall receive....

[southern girl]

Wish I had...dinner was Thurs. night...I will post a review later today.

[southern girl]

FG--I see your premise regarding theater tickets, but I have a slightly different view. With a ticket one can either try to resell it or give it to a friend...it is already fully paid for. I would not just leave it sitting on my desk...I would give it away rather than see it wasted. Even with a nonrefundable airline ticket...you can still apply it to another ticket (granted you face a penalty, unless you a very frequent flyer with friends in high places). That would be why I wouldn't "raise an eyebrow" in those cases. But, with a restaurant reservation...you rely on the restaurant to "resell" that space. If they have a waitlist, great (and the conspiracy theorist in me wonders if you wouldn't get charged anyway if you were not present to see the dining room is full). It is hard to offer a reservation at a prix fixe restaurant to a friend on short notice. They have to be able to go and afford to pay for an expensive meal...in this case over $200.

Perhaps I shouldn't have made this topic about the guarantee, but, about the unreasonable time clause involved .

[glenn]

Hey Nick et al, for the heck of it (and future reference), I rechecked on the credit card policies of visa, mc and amex. They are the same as when I last checked. Visa and mc still thinks restaurants are not deserving of charging a deposit or guarantee for a reservation and the customer will prevail in a dispute. Amex still requires a written agreement and that the restaurant have written policies in place regarding guarantees. Amex is a lot more reasonable (from a restauranteur's perspective). Our restaurant considered dropping Amex because of their discount, but decided against it mainly because of their policy with guaranteed reservations. I know some restaurants only take cash or amex when taking a guaranteed reservation.

[i'm not sure what diner's club policy is.]

[[Ok, back to talking about hotels and airplanes and such.]]

[Stone]

We had a thread a while back on the issue of restaurants requiring a credit card to guarantee reservations. It was started by one of the better posters on egullet -- quite a brilliant fellow, and damn good-looking. Here's the link: Credit Cards

(It quickly devolved into a legal discussion over whether making a reservation created some type of enforceable contract. Lawyers.) At first I thought restaurants were crazy for asking for a credit card. Then a restaurant owner posted that he's had some friday nights with a full reservation book -- requiring him to turn away reservations and customers at the door -- only to have a half-empty restaurant when customers fail to show up. And then I noticed that I have friends who will make reservations at four or five restaurants on a Friday night to give them an option depending on their mood when they're ready to go out. This did seem very unfair -- although I doubt my friends ever thought about the problems the restaurant might have if a bunch of people blew off their reservations. (I learned from one of Fat Guy's old articles that I should always call to cancel a reservation if I've changed my mind. I had never thought about it, but when I started calling to cancel, I found the restaurants surprisingly grateful for what was a very easy gesture of curtesy.)

My thought now is that if the restaurant wants a credit card to take a reservation, it's their option, and I have the choice of not making the reservation. One might say that the restaurant is going to lose customers -- but I leave it up to the management to judge the risk/benefit from the practice. My guess is that if it's busy enough to request the credit card, it can suffer the loss of a few customers. Although I've showed up at some credit-card-reserved dinners one short of the reservation, I've never been charged the $10 for the missing party. I probably would be pissed off if I was, but again, it's the deal I made.

[glenn]

We had a thread a while back on the issue of restaurants requiring a credit card to guarantee reservations.  It was started by one of the better posters on egullet -- quite a brilliant fellow, and damn good-looking.  Here's the link:  Credit Cards

Sorry I missed that discussion. I won't continue it since FG and Bux and others seem to have made the proper arguments defending credit card guarantees, while Tommy and Ruby failed [miserably] to make their case. [so sez glenn, judge and jury.] The only thing I'll add is the experience we've had where I work. We take credit card numbers for every reservation. We never charge anyone, it's just a scare tactic. We also confirm every single reservation no matter what day or time. Still, we often have 50% no shows. People in nyc have the most chutzpah and lack of respect. I disagree with our policy of taking credit card numbers as a scare tactic mostly because it's an idle threat. If it were up to me, I'd implement a policy where we legitimately take credit card guarantees during busy periods and penalize those who don't show or call -- if they call at least a few hours before the reservation, I wouldn't penalize them. As has been stated in the other thread, why should a restaurant be different than other service industries?

[Rail Paul]

Glenn -

how about offering guaranteed seating at a specific time, and charging the $20 upfront? That 50% sounds like a huge hit on the house, it's a shame if people who really want to dine there are unable to do so...

Paul

[glenn]

You're right, no shows are very costly. Our place is probably a little higher than the norm because we fall into the dreaded "trendy" category. People actually brag that they make a bunch of reservations at different places. When we call up to confirm, they often don't even remember that they booked with us [yet many will confirm anyway.] We often have empty tables at prime time as a result. I wish we were popular enough to be able to demand credit card guarantees and offer guaranteed seating, but I don't see how that's workable for all but the very popular restaurants. Logistically, it wouldn't work. Ironically, all the no shows cause the overbooking that restaurants are forced to do.

[Steve Plotnicki]

I think this issue splits into two issues.

No-shows

A restaurant is entitled to prevent against no-shows. A credit card guarantee should suffice. A more stringent policy is my suggestion of prepaying your meal. That's the best deterrent towards people who aren't sure whether they are really going to go.

Cancellation penalty

Well isn't that covered by a no-show penalty? Why would they need you to cancel 30 days in advance? If they can't resell your table within 24 hours of your cancellation they shouldn't be in business. What they are really trying to do is to take advantage of the situation and keep a bunch of credit card guarantees for people who have to cancel within 30 days.

So okay lawyers, is 30 days an enforceable policy?

[Stone]

I agree with Plotnicki.

As for the enforceability of the 30 day policy -- I refer to the previous thread where I recall it was discussed ad naseum.

In the end, don't you think it's a matter of subjective taste?

Discuss.

[tommy]

i simply would not give my business to a restaurant that would charge me even 10 dollars if i couldn't make it to dinner.

[southern girl]

Tommy...I agree with you in principle...but this was some place I really wanted to go (kind of like when I wanted to go to the FL and spent much time on the phone trying to get through)...as many of my chef friends have lauded Jerry Traunfeld (the chef at the Herbfarm)...Although I am still unhappy about getting stuck for the $50...in a perverse way I am glad I gave in....I had one of the better meals I have had in ages...on a par with the FL in the food dept....see my review under Pacific NW if you're curious.

[Skie]

Honestly, when it really boils down to Credit Card transactions for places that require you to sign on the dotted line, it just means that if you don't sign, you can dispute it since your signature (or PIN code if using debit) is your confirmation to the restaurant that a) you are who you say you are (by your signature) and b) on a lot of receipts it will say something to the effect that "Cardholder will pay the above amount" (legal jargon-eze).

I used to work for a company that resold prepaid phone cards in vending machines. People could easily dispute charges resulting in the company getting "charge backs" (ie 'gave' away something free because they had no signature). Of course, the company would then put the 'charge back'ed credit card numbers into a 'bad' list and any further attempts to scam the company would be rejected for that credit card.

Southerner, I'd suggest you check any receipts you've signed for and verify they didn't have you sign for the person who didn't attend. Any other charges can and should be disputed IMO.

Good luck,

Skie

[jordyn]

I think that if you agree to a cancellation policy, regardless of whether or not you think it is a good one, that you are honor-bound to abide by it, even if you are not legally obligated to do so. Agreeing to the policy and then charging back the cancellation penalty does not seem like an appropriate solution to a disagreeable policy; instead, simply do not go to the restaurant and tell them why you are not. If it is clear that the policy is hurting business rather than helping, the restaurant would presumably change it.

[Fat Guy]

I think that if you agree to a cancellation policy, regardless of whether or not you think it is a good one, that you are honor-bound to abide by it, even if you are not legally obligated to do so.

I couldn't agree with you more. In addition, just because a credit card issuer doesn't enforce the charge doesn't mean the customer is not legally obligated. MasterCard is not an arbiter of the law. If the restaurant took a customer to court, and all its evidence was in order (such as a tape of the phone call indicating unequivocal consent to the agreement) and no statute was on the books preventing such guarantees from being enforced, the restaurant would likely win. Perhaps there are agreements in place that prevent businesses from pursuing litigation once the credit card issuer has made a decision, so as a procedural matter the court scenario would never come up, but this is not a reflection on legality -- only on the successful playing of a game wherein one party to a contract has been cheated by the other.

[southern girl]

When I started this thread I wasn't asking whether or how to weasel out of the charge...which I have no intention of doing...I just wanted to know how people felt about restaurants using them and how they felt about the 30 day clause

[jordyn]

Southern Girl: My post wasn't aimed at all at the line of questioning that you initiated, but at some of the responses that subsequently appeared.

To answer your initial question: I don't have a problem with restaurants requiring credit card guarantees for tables, as long as they are willing to commit to actually having my table ready when I show up at the appropriate time. That's the trade off that makes the deal a win-win in other industries, and I wouldn't mind seeing it happen in restaurants, too.

However, I would be extremely reluctant to make reservations at a place with a 30 day cancellation policy. My life is simply too chaotic for me to have any confidence that I wouldn't end up losing my money. I would consider 24 hours notice to be a reasonable requirement, and 48 hours to be the limit of what I would accept at anything but a truly unique and exceptional restaurant.

[tommy]

I would consider 24 hours notice to be a reasonable requirement, and 48 hours to be the limit of what I would accept at anything but a truly unique and exceptional restaurant.

so you'd be willing to take the hit when something comes up at the last minute.

[southern girl]

Thanks Jordyn for answering my original questions...I was just trying to head the topic back to where it started.