Why reservation fees are popping up at Long Island restaurants

Facebook has long been a place for disgruntled diners to complain about subpar service and inferior food, but lately another issue has risen to the top of the grievance heap: restaurants that take credit card information to hold a reservation. 

In this corner: customers who spend a good deal of hard-earned dollars on dining and don’t want to be tied down to a table if life gets in the way. In that corner: restaurants working on slim margins that need to maximize every seat in the dining room. Where's the middle ground?

Frank Graziosi, who owns Venere in Westbury with his father, Angelo, has a greatest-hits list of customers behaving badly. “I recently had a 12-top not show up on a Saturday night,” he recalled. “I called the customer and when they picked up, I could tell they were at another restaurant.”

It was during COVID that Venere began requiring customers to give a credit card when making reservations through the online booking service OpenTable, with the understanding that last-minute cancellations would incur a $20-per-head charge. “When we reopened after the shutdown, we had half the tables. It was a necessity,” he said. Graziosi recently discontinued the policy for parties under 10 people after his OpenTable representative said it was deterring people from making reservations. “Since we stopped taking credit cards, online reservations have tripled.” He's seeing more first-time customers but not, he said, more no-shows.

Sharon Lupia McGovern, of Commack, dines out regularly, but will not book a table at a restaurant that requires a deposit. “I don’t object to it in theory,” she said, “but it’s too risky for me.” Among her regular dinner companions is one person who uses a wheelchair and “we can’t always assume he’ll feel fine.”

One strategy McGovern uses to avoid leaving a deposit is just to show up before peak dining hours. That's how she managed to snag a table at The Farm Italy in Huntington, still white-hot more than a year after it opened. Because it's such a tough reservation, Joel Blitzer, of Smithtown, is happy to put his money where his mouth will be. “I think Long Island restaurants should have started doing this a long time ago,” he said.

Blitzer works in insurance and handles many small businesses, restaurants among them. “I see people commenting about this on Facebook and they have absolutely no idea what it takes to run a business — the cost of labor, utilities, insurance. And some restaurants will change their policies because they are terrified of the online reviews.” 

Even restaurants that stick to their guns online usually have a different policy for phone reservations. For a recent birthday celebration, McGovern wanted to go to Chops in Patchogue, which requires a $25-per-person deposit through OpenTable reservations. But, she said, “I circumvented the policy by calling and pretending I knew nothing.” 

At Prime in Huntington, you’ll only be asked for credit card information if the party is more than six people, said co-owner Michael Bohlsen. While the restaurant's policy states that “no-shows or cancellations less than 3 days in advance will be subject to a charge of $50 per person,” in reality, Prime usually only charges people for no-shows.

“Leaving a credit card number motivates people to cancel and if they do — even the day of — we usually don’t charge them,” said Bohlsen's partner (and brother), Kurt Bohlsen. But the possibility of losing their deposit does make customers less likely to ghost the restaurant. The Bohlsens' records show that over the last 365 days, 2% of people who made reservations by phone did not show up; online no-shows were only 1%.

Practically, though, a late cancellation has the same effect as a no-show. “If you make a reservation on Tuesday and cancel it on Saturday, you ‘occupied’ that table for almost a week and I turned people away all that time,” Graziosi said.

That’s why many restaurants overbook. 2 Spring in Oyster Bay doesn't require a credit card deposit for parties of fewer than six, said chef-owner Jesse Schenker, and the only way to keep the 65-seat dining room full is to overbook. On a recent Saturday night there were about 130 reservations, 90 cancellations and 10 no-shows. “Generally, we see a 20% to 25% cancellation rate in the last 24 hours. So we have to overbook by 20% to 25%,” he said.

This approach doesn’t work at Four, Schenker’s chef’s tasting counter next door, where there are 10 seats and the price, exclusive of drinks, tip and tax, is $275 per person. “Everyone pays in full when they make the reservation,” he said. “If you call outside of 72 hours we’ll offer a change of date. But I tell people to treat it like a concert ticket: If you get COVID you’re not going to call Ticketmaster.” (He also suggests diners get travel insurance.)

“People pay more attention when they think they will have to pay,” is how Roy Kurniawan sums up the issue. At Tiga, the Port Washington sushi bar he owns with Dhani Diastika, “We have very limited space and we were seeing a lot of last-minute cancellations and no-shows.” About three years ago, he instituted a policy through the online booking platform Resy that requires 24-hour notice to cancel a reservation lest the diner incur a $20 per-person charge. Things have improved significantly, but there are still no-shows.

“About half the time, people dispute the charge,” he said. “They’ll tell my manager that if they don’t get their money back, they’ll leave a bad review online." In these cases, Kurniawan said the credit card companies are usually on the customer’s side. “And not only do I have to refund the deposit, I have to pay a second credit-card-processing fee,” he said.

One restaurant that has managed to navigate the issue successfully is Bruce & Son in Greenport. The restaurant began using Resy in the summer of 2020, during COVID, and instituted a $25 per-person fee for no-shows or reservations canceled within 24 hours. “We were faced with an overwhelming number of cancellations and we knew we had to take action to protect our business,” said Kassata Bollman, who owns the breakfast-brunch spot with her husband, Scott Bollman. The move has “evened the playing field,” Kassata said. "I couldn’t tell you the last time we had a no-show.”