Edmonton restaurants hope to deter last-minute cancellations with new deposit-to-dine policy

Some Edmonton restaurants are requiring deposits when making a reservation due to the pandemic and supply chain issues.

Co-owner of RGE RD Caitlin Fulton said during the pandemic her business started to see an increase in cancellations and no shows on Friday and Saturday nights.

"We were getting sometimes three to four reservations not showing up," said Fulton. "That's huge. That's massive for us.And no way to fill those tables."

In October, Fulton and co-owner Chef Blair Lebsack decided to introduce a small fee of $10 per person to their online reservation site in an attempt to deter people from not showing up.

"It's not about recouping a financial loss. It's not about introducing a financial penalty, even. It is just about introducing a way that reminds people that they're committed to the table," Fulton told CTV News Edmonton.

She says since introducing the new deposit policy, the restaurant has only had three reservations not show up. Deposits are refunded for cancellations if enough notice is given.

"It makes a difference in how we order wine, how we order food, how we schedule people, so it's really important that reservations come when we expect them," said Fulton.

Pampas Brazilian Steakhouse only requires a deposit for groups of 15 or more, totalling 25 per cent of the dinner cost times the number of guests.

Co-owner Oscar Lopez says it's easier for the steakhouse to fill a table for two or four, but having a large group no-show is a big financial hit.

"If those large groups don't show up and we don't have a deposit to hold them accountable to, it becomes very challenging for us to fill those seats," said Lopez.

He said they've had one large group call and cancel three hours before their reservation, but their reason was valid and verifiable so they worked out a different arrangement for dining.

Plans can change, especially during a pandemic, but Lopez says he hopes a deposit will be a deterrent to people who make reservations at multiple restaurants for the same time.

"All we're really asking is to give us a heads up if you're not going to make it and understand that we prepare the food and staffing ahead of time," said Lopez.

"We ask our guests to just give us a call. Obviously not just our restaurant, but any restaurant where they make a reservation. It's really critical and really important that we're told as much ahead of time."

HUGE HIT TO THEIR BOTTOM LINE

"If a restaurant doesn't have a large walk-in sort of foot traffic as part of their business model, if somebody doesn't show up for a reservation, that's a huge hit on their bottom line," said Heather Thomson from the Alberta School of Business.

"Not only could they have maybe given that table to somebody else, that food and that managing of the inventory could potentially go to waste."

Thomson says the increase in food prices and supply chain problems around the world have restaurants taking a huge hit and is coupled with the fact that, due to the pandemic, people are a bit more cautious about dining in indoor spaces.

She says asking for a deposit that goes towards the meal makes sense for certain restaurants because their operating costs will be covered if the customer decides to not show up.

"I think restaurants definitely run the risk of alienating some customers because of this policy but I think generally speaking, the ones that want to go to that restaurant won't have an issue with paying for that deposit, especially if it's something special like an occasion."

Paying a deposit when making a dinner reservation may feel like a new concept, but Thomson said it's often used for other personal services like nail and hair appointments, and even hotel bookings to protect the business from taking a financial hit.

"Restaurants need to be at full capacity if they're participating in the exemption program and this is a way to make sure that their tables are full and they are doing what they can to control these variables," she said.

"This isn't a money grab. This is definitely something they need to do to ensure their livelihood."