Deposit, advance payment or prepayment? How to charge for reservations

Prepayment is the most effective protection against empty tables and unsold VIP booths. But whether you can keep the money when a guest doesn't show up depends on what you call it and what your reservation policy says.

When to take money up front

Most often for larger groups, on peak days (Fridays, Saturdays, holidays, New Year's Eve), for tasting dinners, for ticketed events and for VIP booth reservations at clubs. Prepayment helps on both fronts: guests take their reservation more seriously, and you get the money earlier for purchasing and organization.

Deposit (zadatek)

A deposit is governed by Article 394 of the Polish Civil Code. Unless the parties have agreed otherwise:

• if the guest fails to perform the contract, for example by not showing up, the venue can withdraw from it and keep the deposit;
• if it's the venue that fails to perform the contract, the guest can demand double the amount back;
• if the contract is performed, the deposit is credited toward the bill;
• if the contract is terminated or falls through for reasons that neither party, or both parties, are responsible for, the deposit is returned.

Advance payment (zaliczka)

An advance payment is part of the price paid up front. The law attaches no special consequences to it, so if the contract falls through, the advance payment is, as a rule, refunded. If your reservation policy calls it an “advance payment,” don't count on keeping it when a guest doesn't show up.

Prepayment in practice

In everyday Polish, “przedpłata” (prepayment) usually means an advance payment. What counts, though, is the content of the contract, not the label. If you want the money to be forfeited when a guest doesn't show up, state this clearly in your reservation policy and show it to the guest before they pay.

Do guests have 14 days to withdraw from a reservation?

For contracts concluded online, consumers usually have 14 days to withdraw. However, the Polish Consumer Rights Act excludes this right for catering and for services related to leisure and to entertainment, sports or cultural events if the contract specifies the date or period of the service (Article 38(12)). So, as a rule, a table reservation for a specific evening or a concert ticket for a specific date does not give guests 14 days to cancel. Refunds are decided by your own policy.

How to set your policy, step by step

1. When you require prepayment: from what group size, on which days, for which events.
2. How much you charge: a fixed amount per person or a share of the menu price.
3. How late guests can cancel a reservation free of charge, and what happens after that.
4. Late arrivals: how many minutes you wait before the table is released.
5. How and when you refund the money.
6. Where guests see the policy: in the reservation form, before payment and in the confirmation.

A sample policy to adapt

Adjust the numbers to your venue. Keep the amount reasonable: terms in consumer contracts that impose grossly excessive charges may be deemed unfair.

The most common mistakes

• Calling it an “advance payment” in your policy when the venue wants to keep the money if a guest doesn't show up.
• Rules buried in terms and conditions that the guest doesn't see before paying.
• No information on how late a reservation can be canceled free of charge.
• Different rules over the phone, on the website and on social media.

This article is for information only and is not legal advice. It's worth having a lawyer review your reservation policy and ticket sales terms.