Restaurant Operations National New York
What Restaurant Operators Wish You Knew About Reservation Fraud
In the past year, the rise of reservation fraud has negatively impacted a segment of restaurants, becoming a buzzy topic of discussion for the industry as the issue continues to grow. Reservations made by bots and unauthorized third-party resellers can often turn into no-shows and late cancellations, resulting in lost revenue for restaurants. Resy data has found that no-show rates for bots and brokers are four times that of the general population of Resy users. Late cancellations, defined as cancellations that occur within 24 hours of the reservation date and time, are two times higher amongst the bot and broker population than regular users1.
Restaurants’ profit margins are razor thin. This means every empty table created by reservation fraud can have a huge impact on these small businesses, many of whom are already struggling to stay afloat in their communities amongst an increasingly challenging landscape for restaurant operators.
The unauthorized resale of reservations has not only affected businesses but has also caused frustration among diners competing with automated bots. This past spring, the New York State Legislature became the first state in the nation to pass legislation, which is now awaiting the governor’s signature to go into effect, intending to combat this problem with the Restaurant Reservation Anti-Piracy Act (S. 9365/A. 10215). Resy publicly supported this bill in collaboration with more than a dozen of their New York City restaurant partners by sending a letter to the bill’s sponsors.
In addition to advocacy efforts, Resy’s Platform Security combats reservation fraud through tools that actively identify platform misuse and fraudulent behaviors that violate the Terms of Service. When misuse is detected, Resy takes measures including deactivating accounts and canceling reservations of users that violate these guidelines. You can learn more at the newly launched Resy Security Center.
To shed light on this issue, three prominent restaurateurs from New York City—Angie Rito and Scott Tacinelli of Don Angie & San Sabino, Faye Chen of Double Chicken Please, and Sean Feeney of Lilia, Misi, Misipasta, Fini Pizza, & Red Hook Tavern— shared their thoughts on reservation fraud, how their businesses have been affected, the steps they’re taking to mitigate negative impacts, and what they wish diners knew about the challenges restaurants face regarding reservation resale and fraud.
(Quotes have been edited for length and clarity.)
How have bots and reservation resale platforms impacted your business?
Angie Rito & Scott Tacinelli (Owners of Don Angie & San Sabino): For a 50-seat restaurant like ours, the impact of bots is significant. Bots grab reservations and then resell them. If they don’t get bought, it leaves us with no-shows at the door and it’s often too late to fill them.
This isn’t just a monetary issue. We’re a very small restaurant and there’s high demand. When guests notice that a table next to them is left empty because of a no-show, they might think that we’re being sketchy about reservations which is untrue. Another way that it’s detrimental to us is that it consumes our managers’ bandwidth, as they go through books daily to try to discern between legitimate and fraudulent bookings.
Faye Chen (Co-Founder of Double Chicken Please): Reservation fraud causes unfair stress on our staff, especially our host who has to deal with fake reservations booked by bots.
Sean Feeney (Co-Founder of Lilia, Misi, Misipasta, Fini Pizza, & Red Hook Tavern): We try to learn about every diner who comes to our restaurants, but with third-party resale platforms, names and phones aren’t correct. It prevents us from delivering the best hospitality possible.
What actions have you taken to help mitigate this?
Rito & Tacinelli: Don Angie benefits from established foot traffic to fill seats, but San Sabino has only been open for about half a year, so we don’t have the same level of visibility, which is challenging, especially during the summer. To increase our visibility into potential bot bookings, Resy is implementing systems to identify profiles other restaurants have flagged or that might look fake.
Chen: We work with Resy to monitor, identify, and cancel reservations made by bots. Recently, we’ve updated our booking policy. We’ve introduced a $2.50 booking fee per person to ensure real people are making the reservations, as bots typically do not have real contact details or valid credit card information. We also check IDs at the door to verify the person who made the reservation matches the name. With bots, we had instances where one account would have multiple reservations in the same week. Now, we don’t allow multiple reservations to be held by a single guest within a specific time period. This has enabled us to see a drop in fraudulent reservations.
Feeney: We are in a fortunate position where our restaurants are in high demand, and we’ve relied on Resy’s partnership to mitigate third-party resale. The Resy Team has been pros since day one with open lines of communication. We have definitely noticed a decrease in reservations made by bots.
Our goal is to create a booking environment that works for everyone—our business and our customers.— Faye Chen, Co-Founder, Double Chicken Please
What else do you wish diners knew about third-party resale platforms?
Rito & Tacinelli: It may seem like a good idea to diners, but unauthorized third-party resale platforms ultimately harm restaurants. Bots have created this problem and are wasting time for diners and staff alike.
Chen: I hope guests will not go through the bots and understand why we don’t honor reservations from these platforms. Our goal is to create a booking environment that works for everyone—our business and our customers. With the introduction of the booking fee, we’re trying to level the playing field.
Feeney: With Resy’s support, we try to understand which reservations are potentially booked through bots so that we can give it away to someone on our Notify list. I believe that’s the fairest way for people to dine at our restaurant. Third-party reservation resale platforms take fees that don’t benefit the restaurant.
With regards to those who want to come visit our locations, we don’t play favorites. Everybody should be welcomed and feel like they’re one of us when they walk into our restaurants.
Resy offers a variety of restaurant-approved options for diners to snag a reservation and visit buzzy spots:
- Face to face interactions can go a long way: guests who stop by early in the night can add their name to a digital waitlist, where hosts can send them a text directly from Resy OS when their table is ready.
- Resy’s Notify feature allows potential diners to add themselves to a waitlist for a future date, and they can receive an automated notification from the Resy app when a spot becomes available.
- Resy’s ongoing editorial series The One Who Keeps the Book aims to demystify the booking process for in-demand tables. By interviewing hosts, maître d’s, and general managers, The One Who Keeps the Book gets the secret tips, tricks and shortcuts for obtaining reservations directly from the source.
Restaurant enthusiasts can use these methods to successfully book in-demand tables without hurting the small businesses that they value.
1. Based on Resy’s reservation data from April 1, 2024 – October 23, 2024.
*Opinions and views in articles shared on Resy OS are presented for the purpose of discussion and commentary on topics of interest in the restaurant industry; they should not be viewed as substitutes for advice given by professionally engaged business consultants and advisors.
