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The Dark Side of Not Honoring a Reservation: How No-Shows Impact Restaurants

If you make a hotel reservation in Quebec and don’t cancel or show up, you can be penalized and charged a no-show fee. Restaurants in Quebec want to be compensated like that too.

Currently, restaurants do not have the authority to penalize diners for not honoring a table reservation. According to Quebec’s consumer protection office, restaurants can ask for a credit card or deposit to secure your reservation, but they can’t charge a fee to your credit card if you don’t show up. 

Is it okay for diners to be protected, while restaurants reap the consequences of no-shows? This debate is heating up in Quebec so let’s take a look into why restaurants are asking the provincial government to justify a no-show fee.

How No-Shows Impact Restaurants
When you don’t cancel a reservation – maybe you forgot or perhaps you think it’s not a big deal – you’re impacting an entire business and all the employees who work there. No-shows force restaurants to send hourly employees home early and that means less tips and a lower paycheck for cooks, servers, and bussers.

Restaurants are still recouping from the shutdowns caused by COVID-19. The courtesy of canceling, whether it’s 24 hours in advance or five minutes before your reservation, allows the restaurant to give your table to a walk-in. A no-show is harder to handle because the restaurant is literally holding a table they can’t give away.

Inflation has impacted the cost of everything, including ingredients. Restaurant margins are thin and overbuying or wasting food due to no-shows negatively impacts daily revenue, especially for small independent establishments.  

No-shows are a very common occurrence for restaurants. On average, 18 to 20 percent of reservations will end up being a no-show. If a restaurant at 100% capacity typically generates $2,000 in revenue a day, they can lose up to $400 a night, or $150,000 annually, if one in five reservations is a no-show.

Restaurants Combat No-Shows
While many restauranteurs are using reservation software to minimize no-shows, the ability to charge a no-show fee can add a little extra protection. Leading reservation systems like Libro enable restaurants to send reservation reminders by email and two-way SMS. Libro also allows restaurants to create a digital database of customers to help identify frequent no-shows. In addition, restaurants provide multiple ways to cancel a reservation – a phone call, a text message, or a couple of clicks online. 

Despite all the efforts to combat no-shows, they will still happen. The idea of implementing a nominal no-show fee may be the perfect deterrent for repeat offenders and rogue diners. In the end, both parties will be financially impacted, and maybe the scales of common courtesy and fairness will become a bit more balanced. 

Disclaimer: There is no clear and concise answer provided on whether charging a client a fee is legal if they do not show up. Libro’s position is as follows:

If the guest makes a reservation ONLINE and the restaurant has explained online under what conditions the fee would be charged AND THE GUEST ACCEPTS THE CONDITIONS, then we believe this is a binding contract and is legal.  

If the guest makes the reservation over the phone, charging them a no-show fee COULD be considered illegal.  In this case, we recommend the restaurant send an email (perhaps with a form/contract) to the guest asking them to fill in information and credit card details. This would work well for large group reservations.  

Libro is not responsible for any issues between guests and the restaurant.  We merely facilitate the process.  It is the responsibility of each restaurant to seek legal counsel and decide what policy is best in their situation.

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