Charging no-show fees at a US restaurant: what is legal and how to do it right

A party of six books your best table for Saturday night, never shows up, never calls. The table sits empty through your busiest service while you turn away walk-ins. According to a YouGov survey commissioned by OpenTable, 28% of Americans say they did not show up for a reservation in the past year. At some point, most US restaurant owners ask the same question: can I just charge these people?

The short answer is yes, you can. No federal law prohibits a US restaurant from charging a no-show or late-cancellation fee. But the way you charge it matters enormously. Charge a card without clear prior disclosure and agreement, and you are exposed to chargebacks, card network penalties and, in some states, consumer-protection complaints. Do it right, and a no-show fee is both enforceable and surprisingly well accepted by guests.

This guide covers what US law actually says, what the card networks require, how to survive a dispute, and how to choose between fees, deposits, card holds and prepaid reservations. It applies whether you take reservations by phone, through your website, or through a reservation system with a free plan and 0% commission like the one we build at ViteUneTable.

Can a US restaurant legally charge a no-show fee?

Yes. In the United States, a no-show fee is a matter of contract law, which is state law. When a guest books a table after being told "cancellations within 24 hours or no-shows will be charged $25 per guest," they are agreeing to a condition of the reservation. If they break it, you can charge the agreed amount.

Three conditions make that contract stick in practice:

• Disclosure before booking. The guest must see the policy before they complete the reservation, not discover it in a confirmation email after the fact.
• Affirmative agreement. The guest provides a card and completes the booking knowing the terms. An online form where the policy is displayed at the point of booking is far stronger evidence than a phone call where a host may or may not have mentioned it.
• A proportionate amount. Courts and card issuers look skeptically at penalties wildly out of proportion to the harm. A fee that roughly reflects the revenue a lost cover costs you is defensible. A punitive amount is not.

There is no federal statute that caps the amount or bans the practice. The constraints come from three other directions: general deception rules, card network requirements, and state fee-transparency laws. Let's take them one at a time.

What federal law says (and does not say)

The federal rule everyone has heard about, the FTC's Rule on Unfair or Deceptive Fees (16 C.F.R. Part 464), took effect on May 12, 2025. It requires upfront disclosure of the total price, but it covers only live-event tickets and short-term lodging, such as hotels and vacation rentals. Restaurant reservations are not covered.

That does not mean federal law is irrelevant:

• Section 5 of the FTC Act still prohibits deceptive practices generally. Charging a fee a consumer was never told about is a textbook deceptive practice, whatever the industry.
• The Fair Credit Billing Act gives every cardholder the right to dispute charges through their card issuer. The Consumer Financial Protection Bureau explains that a consumer has 60 days after the charge appears on their statement to send a written billing-error notice, and can dispute charges they consider unauthorized.

In other words: the federal government will not stop you from charging a disclosed no-show fee, but it arms your guest with a powerful dispute mechanism if the fee comes as a surprise. Which brings us to the rules that decide most no-show fee disputes in practice: the card networks'.

Card network rules: the real constraint on no-show fees

Almost every no-show fee is a card-not-present transaction: you charge a card that was typed into a form days earlier, with no cardholder standing in front of you. Card-not-present charges carry the highest dispute risk, and the networks compensate with strict disclosure requirements.

Visa's position, stated on the site of Verifi, its dispute-resolution subsidiary, is simple: "Visa will support your policies, provided they are clearly disclosed to cardholders." For online sales, the same guidance says the policy "must be displayed during the final stages of the online transaction or on the checkout screen," meaning at the moment the guest enters their card details, not buried in a linked terms page.

Practically, that means your booking flow should:

1. Show the policy on the same screen where the card is captured. "No-shows and cancellations within 24 hours are charged $25 per guest" right above the card field.
2. Record the agreement. Keep the timestamp, the reservation details and the exact policy text the guest saw. Screenshots of your booking flow, dated, are valuable evidence.
3. Repeat the policy in the confirmation email. Repetition does not replace disclosure at booking, but it strengthens your file and reduces genuine forgetfulness.
4. Charge exactly what you disclosed. If you announced $25 per guest and three people no-showed, charge $75, not a round $100.

If you take reservations by phone and key in card numbers manually, be honest with yourself: you have almost no proof of what was said. A written channel, whether a booking widget or a payment link sent by text or email, protects you far better.

The chargeback problem, and how to survive a dispute

Even a perfectly disclosed fee can be disputed. The guest calls their bank, says "I never authorized this charge," and the bank opens a chargeback. You then have a limited window to respond with evidence.

What wins a no-show fee dispute is documentation:

• the reservation record with the guest's name, date, party size and the card provided;
• proof the cancellation policy was displayed at the time of booking, with its exact wording;
• the confirmation and reminder messages sent to the guest;
• your floor record showing the table was held and the party did not arrive.

What loses disputes: policies that only existed verbally, fees charged weeks after the reservation date, amounts that do not match the disclosed policy, and fees charged even though the guest canceled before your cut-off.

Two honest observations. First, for a $25 fee, some issuers will side with the cardholder no matter what you submit, because small disputes are often written off. Treat occasional lost disputes as a cost of the policy, not a reason to abandon it. Second, excessive chargebacks are not just lost revenue: a merchant account with a high dispute ratio pays higher processing costs and can ultimately be terminated. The goal of a no-show fee is deterrence, not collection. A policy that you rarely have to enforce is working.

State laws: fee transparency and California's SB 478

States regulate consumer fees more aggressively every year, and California is the clearest example. Its "hidden fees" law, SB 478, in force since July 1, 2024, prohibits advertising a price that does not include all mandatory fees. The good news for cancellation policies comes from the California Attorney General's own guidance: fees that are "contingent on certain later conduct by a consumer" are not mandatory fees and do not need to be baked into advertised prices.

A no-show fee is exactly that: contingent on the guest's later conduct. You do not need to advertise your menu prices as "$32 entrée plus a possible $25 no-show fee." You do need to disclose the fee clearly before the guest agrees to the reservation, which the card networks require anyway.

Note that California treats mandatory restaurant charges (service charges, surcharges added to every check) differently: under the 2024 companion law SB 1524, those must be clearly and conspicuously displayed wherever prices are shown. That is a separate topic from no-show fees, but if you operate in California and add any automatic charge to checks, read the Attorney General's guidance carefully.

Outside California, most states rely on general consumer-protection statutes that prohibit unfair or deceptive practices. The principle is the same everywhere: a disclosed, agreed, proportionate fee is fine; a surprise fee is a complaint waiting to happen. If you operate in a state with its own price-transparency law, check your state attorney general's published guidance before finalizing your policy.

Fees, deposits, card holds or prepaid reservations: which model fits?

A no-show fee charged after the fact is only one of four models American restaurants use. Each trades friction at booking against protection for the restaurant.

As a rule of thumb: card on file for standard bookings at busy restaurants, deposits or holds for large parties and peak dates like Valentine's Day and Mother's Day, prepaid tickets for tasting menus where one empty seat is unrecoverable. We cover the mechanics of the hold model in detail in our guide to credit card holds for restaurant reservations.

Whatever the model, the amount should approximate your real loss per cover, not punish the guest. Charging your average per-cover margin is easy to justify to a bank during a dispute; charging triple your average check is not.

How to set up a no-show fee guests accept

The restaurants that make fees work follow the same playbook:

1. Write a short, specific policy. One or two sentences: the cut-off time, the amount per guest, how to cancel. Our guide to writing a restaurant cancellation policy includes examples you can copy.
2. Disclose it at booking, in the booking flow itself. On the screen where the card is entered, and again in the confirmation email.
3. Make canceling genuinely easy. A one-click cancellation link in every confirmation and reminder. A guest who can cancel in ten seconds frees your table in time to resell it, which is worth more than any fee.
4. Send reminders. A large share of no-shows are simple forgetfulness. A reminder the day before converts would-be no-shows into either confirmed covers or early cancellations.
5. Apply judgment when enforcing. Waive the fee for regulars, for genuine emergencies, for first offenses. A fee you waive graciously builds loyalty; a fee you enforce robotically ends up on Yelp.
6. Track your no-show rate. If it does not drop after you introduce the policy, the problem is elsewhere, usually in confirmation and reminder gaps.

This is exactly the workflow ViteUneTable automates. The free plan, with no time limit and 0% commission, sends automatic booking confirmations and gives every guest a cancellation link. The Standard pack at €29 excl. VAT per month adds automatic email reminders and Reserve with Google, and the Standard + Anti No-Show pack at €49 excl. VAT per month adds credit card holds, so the deterrent is in place before anyone has to charge anything.

Frequently asked questions

Is it legal to charge a no-show fee in the United States?

Yes. No federal law prohibits it, and no state bans it outright. The fee must be clearly disclosed before the guest completes the reservation, the guest must agree to it, and the amount should be proportionate to your actual loss. Charging a card for a fee that was never disclosed is where restaurants get into legal and chargeback trouble.

Does the FTC junk fee rule apply to restaurant no-show fees?

No. The FTC's Rule on Unfair or Deceptive Fees, effective May 12, 2025, applies only to live-event tickets and short-term lodging. Restaurants are outside its scope. General federal and state prohibitions on deceptive practices still apply, so undisclosed fees remain risky everywhere.

Can a guest do a chargeback on a no-show fee?

Yes. Under the Fair Credit Billing Act, a cardholder can dispute a charge within 60 days of it appearing on their statement. You can contest the dispute by providing proof that the policy was disclosed at booking, that the guest agreed to it, and that the no-show actually happened. Good records win most legitimate cases, but expect to lose a few small disputes regardless.

How much should a US restaurant charge for a no-show?

Base it on your real loss per empty cover. Many casual restaurants set a modest per-guest amount, while tasting-menu restaurants often require the full menu price prepaid, because those seats cannot be resold. Whatever the number, it must match what was disclosed at booking, and a fee that roughly mirrors your lost margin is far easier to defend in a dispute than a punitive one.

Is a deposit better than a no-show fee?

A deposit is collected upfront, so there is nothing to charge later and much less dispute risk, but it adds friction at booking and can reduce reservations. A fee on a card kept on file is nearly frictionless but can be disputed. Many restaurants use both: card on file for normal service, deposits for large parties and high-demand dates.

Do no-show fees actually reduce no-shows?

The strongest effect is the deterrent: guests who have entered a card and accepted a policy either show up or cancel in time. Combined with automatic confirmations, reminders and an easy cancellation link, the point of a no-show policy is to fill the table, not to collect fees. If you are charging fees often, revisit your reminders and your cancellation flow.