Reservation Deposits [moved from San Diego board]

[karaethon]

So a certain (to remain unnamed) restaurant in SD has recently asked me to put down a deposit with the reservation that must be paid at least two weeks in advance of the reservation date. There was no mention about cancellation policy, refund, etc.

I remember reading somewhere that this practice is basically illegal since they are charging you and not performing any sort of service, but I do understand that the restaurant would want to make sure you show up. Does anyone have any information as to whether this is allowed/legal, etc.

[babette feasts]

Is this their normal policy for all reservations, or do you have a particularly large party or need a private room?

[josephnl]

Why should this be any different than a hotel or airline reservation requiring a credit card or deposit where it is clearly stated up front that if you are a no show, you are still obligated for a charge. As long as when you make the reservation this is explained, why should anyone reasonably object. The restaurant is reserving a table for you, may well be refusing reservations to other guests, and as far as I'm concerned, if this is explained in advance, you have made an agreement (contract) with the restaurant which they should properly be able to enforce. Now if the restaurant is owned by nice people, and you call early in the day of your reservation to explain that someone is sick, a nice establishment should make some accommodation.

Unfortunately, this has come about because no shows are very common, and even worse, many people make multiple reservations for the same time, and then decide last minute where to go...and don't even have the courtesy to cancel the other reservations. Extremely rude and inconsiderate, but unfortunately a reality.

[mcgrath]

Amen!

[karaethon]

Found another CH thread on search: http://chowhound.chow.com/topics/763760

It looks like there's nothing illegal about the practice, but if you dispute the charges with the credit card company it *seems* to be easy to get the refund from the credit card company

[nocharge]

Momofuku Ko only takes reservations on their own website and makes you accept terms and conditions that include
“i understand that although i may cancel my reservation at any time
if i cancel less than 24 hours in advance of my seating time
or do not attend my reservation i will be charged $150 per person.”
http://www.momofuku.com/restaurants/k...
Don't see why a credit card company would side with the card holder under those circumstances.

Generally speaking, why would a restaurant bother with taking deposits if they were fully refundable no matter what?

[Philly Ray]

“i understand that although i may cancel my reservation at any time
if i cancel less than 24 hours in advance of my seating time
or do not attend my reservation i will be charged $150 per person.”

Even though that is the stated policy, I think most credit card companies will side with a customer since that is where they make more of their money (interest charged vs fees from the merchant). Plus, without an actual signed receipt, it is tough to make a credit card charge stick if you really want to press the matter.

[nocharge]

Don't think credit card companies have the luxury to choose who to side with willy-nilly as long as the restaurant complies with the rules of the merchant agreement.

[Philly Ray]

And one of the rules of the merchant agreement is to be able to provide a signed receipt for a charge. Here is one from VISA...

http://usa.visa.com/merchants/operati...

Have you ever had a dispute with a merchant? I have and my CC company has held the charge until we were able to resolve the issue.

[kpaxonite]

Its a written combined with a verbal agreement; unless the restaurant was already suspected of fraud there is no way the customer would win. If it reasonable to assume the customer knew of the agreement they were making (and why else would they give cc info) the restaurant would win.

A signature doesn't make a contractual agreement any stronger than a verbal one.

[nocharge]

You can do a chargeback, of course, but the merchant agreement provides rules for how a merchant can remedy a chargeback for "services not rendered" by proving that they were.

As for a signed receipt being needed, here is a quote from the previous thread.
"if you otherwise authorize the Account to be charged without presenting the Card or without signing a sales draft (including by mail, telephone,Internet or any other electronic method of communication), the legal effect is the same as if you had presented the Card and signed a sales draft."

[mcgrath]

There's nothing illegal about this practice. No different from putting merchandise on layaway and paying for it piecemeal. This assumes the deposit is applied in full to your eventual bill. If not, then it still might pass legal muster as you are getting something in return; i.e., a confirmed reservation at a restuarant where you've chosen to dine.

However, absent a clear agreement between you and the restaurant that if you 'no show' then the deposit would be refunded, they couldn't legally keep the deposit if you don't show. If there's nothing said about canceling, no showing, or a refund, then you'd be entitled to get the deposit back if you don't show.

Hard to believe, though, any SD eatery could sustain this policy for long without chasing away customers. I'm unaware of any SD restaurants with a French Laundry-like legion of devotees.

[honkman]

Agree. Nothing illegal about it. If you are a "no show" you should get your money back (but you should always ask for their cancellation policy, e.g. how many days etc.) The only problem could be that some restaurants are not willing to give you the money back easily because they know that not many people are aware what's legal or not and are either afraid to ask for the money or don't want to go through the hassle of hiring a lawyer.

Just curious, which restaurant and is it a deposit or they just want your credit card information ?

[danna]

I disagree that you would expect to get your money back. I believe the restaurant plans to keep it if you "no show". No different that a hotel that will charge you the first night's cost (or more) if you don't cancel in time.

Not saying I like the practice, mind you, but I think it's quite legal and unfortunately becoming more common.

[karaethon]

I think that's exactly the crux of the argument. I have no problem with giving a deposit so long as there are clear guidelines surrounding the agreement (i.e. cancellation policy, it is applied towards the meal, refund if no show).

The other issue in general with the deposit is how to give the credit card in a secure manner. I'm aware that this is usually done over the phone, but that's really not a secure method in my opinion especially since you may not want to give that level of personal information to the restaurant.

@honkman - as I stated originally, don't want to say the restaurant name, and they described it as a "deposit." I'm guessing they want my credit card number and to make a charge on the credit card

[kpaxonite]

I order food often and give my cc number to employees..... if there is fraud I dont really care I check my cc balance often online and i would call visa right away and they would deal with it. its not as if you are giving them the 3 numbers on the back....

[escondido123]

When you go to a restaurant you hand your credit card to someone who disappears and then comes back with your bill and your credit card. That is plenty of time for someone to get all the inf, including the number on the back, if they are so inclined.