The Rise of the Reservation Fee

The rise of apps like Resy, and newcomers like members-only reservation platform Dorsia, make it harder for customers to get tables at hot restaurants: Yet restaurant owners face their own app-related challenges, with no-shows, bots, and scalpers who essentially plant their stake in hard-to-get seats and then don’t always follow through, so restaurants lose money. To navigate, restaurants are trying new ways to make sure their dining rooms are full: One tactic is charging deposits for reservations.

With 28 percent of Americans occasionally flaking on reservations per year, according to OpenTable data, restaurants have been trying to hold diners more accountable with no-show charges of anywhere from $25 to $50; they can also do it by requiring a prepaid tab, as is the case at many tasting-menu spots. But reservations fees are becoming more widespread — at a time when everyone’s hit with rising prices for ingredients, service charges, and sometimes higher prices for using credit over cash.

In addition, restaurants requiring a deposit is a more effective way of ensuring people honor their reservations, OpenTable reports. Prepaid reservations also prevent chargebacks, when the customer flags a charge as fraud then is paid back by their bank for the charge, which happens more often with no-show fees than reservation charges. Chargebacks cost restaurants time for the dispute and they still have to pay credit card and Square fees, but usually don’t get the money for the no-show.

On Tock, small spots like Red Hook’s Pearl Street Caviar or 10-seat Manhattan omakase, Kintsugi, charge a $10 to $35 per-person fee for a reservation. On Resy, Major Food Group’s Torrisi and Carbone have added a $50 per-person deposit that’s applied to the final bill and refunded if cancellations are made at least 12 hours in advance. Their other restaurants, including the Grill in the former Four Seasons in Midtown, and multiple locations of Parm, don’t necessarily require the charge according to their Resy sites.

Tao Uptown, Cathedrale, Israeli restaurant Dagon on the Upper West Side, Crown Shy, 4 Charles Prime Rib, Au Cheval, and Monkey Bar — some only during prime times —also charge reservation deposits. Yet not all fees are applied to the customer’s check. Often, it’s the price of doing business, especially when the fee is just a few bucks.

Bots have long been a nuisance for restaurants; and in the past year or so, some bots have been able to sidestep no-show fees. It’s another reason why more restaurants have been charging fees or deposits just to secure a table.

Restaurateur John McDonald hasn’t yet started charging for reservations, though he confirms that a percentage of tables still aren’t filled as a result of scalping or bots at his Mercer Street Hospitality restaurants, which include Lure Fishbar, Bar Tulix, and the newer Smyth Tavern in Tribeca. Resy, he says, appears to be addressing the problem.

“Resy takes the issue of reservation bots very seriously and has implemented a variety of effective new mitigation measures including blocking bot traffic and identifying and deactivating bad actor accounts,” Lauren Young, a Resy spokesperson says. She claims bots affect less than one percent of restaurants on the app.

OpenTable implemented the deposit option last year. “Bot prevention is a priority for OpenTable and our security team, and we’re regularly making product updates to help detect and prevent them,” says Sagar Mehta, technology officer at OpenTable. “Deposits ... give restaurants the option to require diner deposits, and the flexibility to turn the feature on/off for busy periods, holidays and/or large parties.”

It’s a tool for restaurants to hold diners to their commitment — and cover its costs by requiring diners to fork out more ahead of time.