ResDiary introduces cancellation fee technology to tackle no-shows

The new ‘tokenisation’ technology, developed in partnership with payment provider Stripe, allows operators to securely hold guests' credit card details when they make a booking and charge a cancellation charge in the event of a no-show.

ResDiary claims this tackles the issue of no-shows- which can be as high as 20 per cent at some restaurants –without asking customers to pay a deposit or booking fee.

“A lot of restaurants were coming to us and saying they were having a lot of problems with no shows," ResDiary media and marketing executive, Jennifer Tilly, told BigHospitality.

“Customers were sometimes unwilling to pay a deposit and there was a lot of administration for restaurants taking and managing deposits. Some operators felt that deposits were putting people off and wanted an alternative.

“So we have linked with Stripe to allow tokenisation within Res Diary. What that means is instead of taking a deposit from a customer, a restaurant can take their credit card details when booking, but nothing is charged to that card unless the customer does not show up.”

Secure bookings​

By holding credit card details on a secure database, the technology allows restaurants to avoid physically holding guests’ credit card details, which can put them at risk for PCI non-compliance.

Customers who book online will be asked for their credit card details to secure the booking, and the restaurant manager can set prompts on the internal booking system to prompt staff to take credit card details.

“It is a way of avoiding security issues, but making sure that the tables will be filled, or guests are at least encouraged to cancel any unwanted bookings,” added Tilly.

“Guests will be charged according to the restaurants’ own cancellation policy, which will be set out in their terms of conditions. For example – they might decide that if someone does not cancel a booking 24 ahead of time, they will charge £10 per head.”

The tokenisation technology is now available across online and internal bookings for ResDiary accounts and there are no set up or integration charges, although there is a 1 per cent transaction fee if a card is charged.

No-shows​

Restaurant no-shows have been flagged up by a ‘mega problem’ for the industry by leading restaurateurs including Noma’s René​ Redzepi​​.

Some operators claim that problems have become more severe as a result of online booking​​, which enables guests to make a reservation casually without interacting with restaurant staff. 

The issue has driven many restaurateurs to introduce no-bookings policies, which mean missing out on potential revenues from larger groups.