​Should restaurants take prepayments?


​Should restaurants take prepayments?

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As if dealing with rising overheads and increased competition wasn’t enough, there’s something else taking a toll on the UK’s restaurant industry: diners making reservations and then not showing up.

Restaurant no-shows have been a problem for some time. Estimates suggest no-shows account for 5-20% of total restaurant bookings and cost the industry around £16 billion each year, so it’s understandable the industry wants to fight back.

How restaurants are responding to the problem varies, some, like The Cauldron restaurant in Bristol, resorted to naming and shaming diners who failed to turn up for their Valentine’s Day reservation. Others, like Damian Wawrzyniak’s House of Feasts in Peterborough, started a #StopNoShow campaign on Twitter.

One potential solution that seems to be gaining momentum is ‘prepayment’. Pre-paid tickets are the norm when going to the theatre or a gig, so why not for restaurants too? If you’re unable to attend a gig, you sell the tickets on – the same approach could be applied to restaurant tickets.

The Clove Club in London’s Shoreditch became the first UK restaurant to charge customers for their meal before eating it. Since then, other restaurants have adopted the same approach, including household names such as Heston Blumenthal.

So, what are the benefits?

Aside from giving restaurants greater financial security, Sally Whelan, HGEM’s founding director explains “prepayment does have another benefit, and that’s addressing a part of the guest experience that can often fall flat: attracting attention for the bill and waiting for it to be processed. With prepayment, there’s no waiting around when guests are finished, they just leave happy.”

But while prepayment might appeal to many in the industry, can the same be said for diners?

It does raise a number of questions. What if a diner does not enjoy their pre-paid dinner? Will they have to battle with a restaurant to get a refund? Or would having to prepay simply put a diner off booking in the first place?

Lisa Chambers, Operations and HR Director at HGEM, believes that a deposit system could work well. “I would expect to be asked to pay a deposit when making a large booking and so why not change the perception and make it the norm for all bookings?

Lisa continues: “If a restaurant takes my card as deposit and agrees only to charge the card if I don’t show up then everyone wins. The restaurant has a greater commitment to honour the booking and the guest does not have to prepay”

If you’re considering implementing a prepayment scheme and want to capture your guests feedback get in touch with the HGEM team today on 01225 470999 or email enquiries@hgem.com.

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