Restaurant Deposit Policies: When to Charge

A no-show costs an Australian restaurant table for four around $280–$400 in lost revenue, plus wasted prep labour. A deposit policy—done right—cuts no-shows by 60–80% without turning away genuine diners. Here's how to set one that works for your venue.

Why deposits matter in Australian hospitality

No-shows aren't just annoying; they're margin killers. In a 100-seat restaurant running two seatings on a Friday night, a single no-show during peak season (Christmas, Melbourne Cup week, ANZAC Day) can cost $500+ when you factor in labour prep, ingredient waste, and lost table turns.

Unlike the US, Australian venues rarely have legal teeth to enforce cancellations—there's no standard "dining contract" culture here. That's why a transparent, upfront deposit policy is your best defence. It signals seriousness to diners and protects your bottom line.

When to use a deposit: the Aussie venue playbook

High-risk booking windows

Not all bookings are equal. Target deposits at times when no-shows spike:

• Public holidays and long weekends: ANZAC Day, Queen's Birthday, Christmas and Boxing Day, New Year's Eve. Expect 15–25% no-show rates on these dates.
• Major events: Melbourne Cup week, Spring Racing Carnival, local festivals, school holidays (July and December in most states).
• Peak dinner service: Friday and Saturday nights, 7–9 p.m. slots. These tables have the highest opportunity cost.
• Large parties (8+ guests): Groups are statistically 3–4× more likely to no-show than couples or small tables.
• Last-minute bookings: Reservations made less than 48 hours out carry higher risk.

Lower-risk windows (skip the deposit)

Don't nickel-and-dime genuine diners. Avoid deposits on:

• Quiet weekday lunches (Tuesday–Thursday).
• Bookings made 2+ weeks in advance (these are 85%+ reliable).
• Regular customers with a history of honouring reservations.

How much to charge: the sweet spot

The deposit should sting enough to deter flaky bookings but not so much it kills conversions. Most Australian venues pitch it at $25–$50 per person for fine dining, $15–$25 for casual, or a flat $100–$150 for large groups.

A smarter tactic: make it a credit, not a fee. Frame it as "$30 per person held against your final bill." This removes friction—diners feel they're not losing money, just pre-committing. You're also more likely to collect it upfront because it's presented as a convenience, not a penalty.

The counter-intuitive tactic most venues miss: tiered deposits by party size

Here's what separates smart operators from the rest: instead of a flat deposit, charge proportionally less for smaller parties and more for larger ones. A couple booking Friday dinner? $20 deposit. A party of 12? $50 per person.

Why? Small parties are inherently reliable (lower no-show risk), and you want to encourage them. Large groups are flaky and have high opportunity cost, so the deposit does real work. You're aligning your deposit strategy with actual risk—and diners accept it because it feels fair.

Implementation: Build this into your online booking system (OpenTable, Dimmi, or Resy). Set deposit rules by date, time, and party size. Most platforms let you automate this.

How to collect: the three-step system

1. Be crystal clear at point of booking

Don't bury the deposit policy in fine print. Say it upfront:

"We're holding a $25-per-person deposit for this Friday dinner service. It's credited against your bill. If you need to cancel, 48 hours' notice gets a full refund."

Clarity kills disputes later.

2. Collect via the booking platform or direct link

Don't ask for bank details over email—it's clunky and kills conversion. Use:

• Integrated payment (OpenTable, Dimmi, Resy all accept deposits now).
• Payment link (Square, Stripe, or your bank's payment gateway). Send it in the confirmation email.
• Phone payment (if they ring to book). Take card details over the phone—it's the fastest route to certainty.

Aim to collect within 24 hours of booking confirmation.

3. Refund on time

If someone cancels with 48+ hours' notice, refund immediately. If they no-show, keep it. Your policy should state: "Cancellations with 48 hours' notice receive a full refund. Cancellations within 48 hours or no-shows forfeit the deposit."

Refunding quickly (same day) builds trust for future bookings and reduces chargebacks.

Managing the grey zone: what if they cancel at 36 hours?

This is where you'll get pushback. Some venues charge a sliding scale:

• 48+ hours: full refund.
• 24–48 hours: 50% refund.
• Under 24 hours or no-show: forfeit.

Alternatively, offer a credit instead of refund. "We can't rebook your table, but we'll credit $25 towards your next visit." This recovers some revenue and keeps them coming back.

The key: decide your policy before you launch deposits, and stick to it. Inconsistency breeds resentment.

Special considerations for Australian venues

GST and the ATO

Deposits are tricky from a tax perspective. If you refund the full amount, it's not income—no GST. If you keep it (no-show), it is income, and you owe GST on it. Chat with your accountant, but most venues treat forfeited deposits as revenue on the date of the no-show.

Consumer law: ACL and your obligations

Under the Australian Consumer Law, your deposit policy must be fair and transparent. Avoid:

• Hidden cancellation clauses.
• Refusing refunds for legitimate reasons (illness, family emergency—use discretion).
• Charging deposits that are clearly punitive rather than protective.

If a diner disputes a forfeited deposit via their bank, you'll need to prove the policy was clearly stated and they agreed to it. Screenshot your confirmation email.

Communicating during peak seasons

Over Christmas, Melbourne Cup week, or other high-demand periods, emphasise the deposit upfront in your booking confirmation and follow-up email. A friendly reminder 48 hours before their reservation also helps (though don't overdo it—one reminder is enough).

Measuring what works

Track these metrics to refine your deposit strategy:

• No-show rate before and after: Aim for a drop from 10–15% to 5% or lower.
• Booking conversion: Did deposits reduce online bookings? By how much? (A small drop is normal; huge drops mean your policy is too aggressive.)
• Deposit collection rate: If you're collecting less than 85% of deposits, your process is broken. Fix the payment link or train staff on phone collection.
• Refund disputes: More than 2–3 per month? Your policy language needs clarity.

Where Calso fits in

Managing deposits manually—collecting payments, tracking refunds, chasing no-shows, handling disputes—eats time. Calso's booking integration automates deposit collection at the point of reservation, flags no-shows in real time, and syncs refunds to your payment processor. Your team spends less time on admin and more time on the floor. It also feeds into demand prediction, so you know which tables are genuinely booked versus risky, helping you manage walk-ins and last-minute changes smarter.

Want early access?

Calso is invite-only for founding venues. If you're ready to automate deposits, no-show management, and the dozen other operational headaches eating your week, join the waitlist at calso.com.au/join. Founding venues get priority onboarding and direct access to the team. Limited spots in your city—don't let your competitor get there first.

FAQs

Can I charge a deposit on all bookings?

Legally, yes. Practically, no. You'll kill conversion on low-risk bookings (quiet weekday lunches, small parties, advance bookings). Be strategic—deposits on high-risk slots, not every reservation.

What if someone refuses to pay the deposit?

That's a signal. If they won't commit $25 upfront, they're likely to no-show. Politely: "We hold deposits to protect our table allocation. Would you like to proceed, or would you prefer to call ahead on the day?" Some will pay; others will self-select out. Both outcomes are good for you.

Can I keep the deposit even if they cancel with a good reason?

You can, but you shouldn't. Illness, family emergency, traffic—use judgment. Keeping deposits in edge cases breeds bad reviews and reputation damage. A $25 refund costs you nothing; a one-star review costs a lot.

Do I need to mention deposits in my booking confirmation email?

Absolutely. State the amount, the refund policy, and the deadline. Screenshot this for your records in case of disputes.

What if my booking platform doesn't support deposits?

Switch to one that does (OpenTable, Dimmi, Resy all support them now). Or use a standalone payment link (Square, Stripe) sent in your confirmation email. The friction isn't worth the risk.