A restaurant in Australia or New Zealand can charge a no show fee, but only where the amount is disclosed before the booking is confirmed and is a genuine estimate of what the empty table costs, not a punishment. Skai Solutions works with venues in both countries, and at a measured Australian no show rate of 1.41% the part operators get wrong is not whether a fee is allowed, it is where the fee is written down.
The two countries look alike and are not. Australia banned unfair contract terms outright on 9 November 2023, so a term can be acted on the day it goes live on your booking page. New Zealand still requires the regulator to win a court declaration first. That difference decides how much a badly worded booking policy can actually cost you.
Nothing in the Australian Consumer Law bans charging for a booking that does not turn up. What it bans is an unfair term in a standard form contract, and your online booking terms are a standard form contract, because the guest can take them or leave them and you offer the same words to everybody.
The ACCC sets out a three part test. A term is unfair if it causes a significant imbalance in the rights of the two sides, and is not reasonably necessary to protect the legitimate interests of the party it benefits, and would cause financial or other harm if it were enforced. All three have to be true. A fee that genuinely covers a table you could not resell protects a legitimate interest, which is why a modest, disclosed fee is defensible and a large, hidden one is not.
The ACCC also lists, as an example of a term that may be unfair, one that penalises one party but not the other for ending the contract. Read that straight: if your policy charges the guest for cancelling late but gives them nothing when you cancel their table late, you have built the exact shape the regulator names.
This is the number almost no hospitality content publishes, and it is the reason to get the wording right rather than copy it off another venue's website.
Since 9 November 2023, proposing, using or relying on an unfair contract term is banned in Australia and penalties apply. For conduct on or after 28 March 2026 the ACCC's published maximum for a company is the greater of A$100,000,000, three times the benefit obtained, or 30% of adjusted turnover during the breach period. For an individual it is A$2,500,000. The ACCC can also issue an infringement notice, currently A$21,840 for a corporation and A$4,368 for an individual, after the penalty unit rose from A$330 to A$364 on 1 July 2026.
No small cafe is going to be hit with a hundred million dollar penalty. The point is the shape of the risk: the ban bites on the term existing and being relied on, not on somebody suffering a loss first. That is a different regime from the one most booking policies were written under.
New Zealand covers the same ground through the Fair Trading Act, and the fairness test reads almost identically: significant imbalance, detriment if relied on, not reasonably necessary to protect legitimate business needs. The machinery underneath it is not the same.
The Commerce Commission has to apply to the court for a declaration that a term is unfair. Only once the court has declared it is it an offence to apply, enforce or rely on that term. So a New Zealand venue gets a step Australia removed in 2023.
The ceilings are also far lower. The Commission's published maximum for a Fair Trading Act breach is NZ$200,000 for an individual and NZ$600,000 for a business, per offence, with infringement notices of NZ$1,000 for certain breaches. Set A$100,000,000 next to NZ$600,000 and you have the honest cross Tasman picture: same test, very different exposure. New Zealand also extended the unfair terms rules to standard form small trade contracts on 16 August 2022, which matters if you take function and catering bookings from other businesses.
Both regulators carve out the same exemption, and it is the most useful sentence on this page. The ACCC says the unfair contract terms law does not apply to terms that set out the upfront price to be paid. The Commerce Commission says terms describing the main subject matter and setting the price are exempt from the fairness test, providing these are clear and displayed prominently.
So a no show fee stated on the booking screen, before the guest confirms, sits closer to a price than to a penalty clause. The same fee buried in terms and conditions nobody opens is a term, it is not transparent, and transparency is one of the things a court weighs. Only a court decides in the end, but the practical instruction is simple.
Size it off what an empty table actually costs, and keep the workings. The Resos No-Show Index 2026, which measured 3,768,761 real reservations rather than surveying anyone, puts the Australian recorded no show rate at 1.41% across 251,804 bookings at 213 Australian restaurants, and the average restaurant in its dataset at about 36 no shows and roughly 117 booked covers lost a year.
It also publishes the number that should set your policy: expected lost covers per booking run 0.154 for parties of ten or more against 0.051 for parties of one or two. Large parties no show less often, 1.15% against 2.63%, but cost about three times more when they do. A flat per booking fee therefore misprices your risk in both directions. A per head fee on parties above a threshold, and nothing below it, matches the measured loss.
Our own worked example, so you can check the inputs. Take a fifty seat dinner service, an average spend of A$55 a head, and a table of eight that does not arrive. The lost revenue is A$440. Your gross margin on that is not A$440, and the recoverable part is the contribution after food cost, so a fee somewhere near a deposit of A$20 a head is arguable as a genuine estimate while A$55 a head is charging for revenue you never earned. Those are our numbers, not a benchmark, and the food cost side is set out on our page about restaurant food cost percentage.
The same index found that 56% of cancellations arrive within 24 hours of the booking or after it has already started, 317,541 out of 566,049, and 7.1% land after the start time. That is the whole problem with a cancellation window in one figure. The guest is trying to reach you on the day, during service, on the phone, at the exact hour nobody can pick it up.
A fee you cannot collect and a cancellation you never heard are the same outcome. If the guest called at 6.40pm to say four had become two and got a ring out, you did not lose the covers to bad behaviour, you lost them to an unanswered line. Our page on restaurant no shows works through the reminder and confirmation side, and the cheapest way to answer the restaurant phone prices the options for the calls themselves, including the free ones.
Answering matters as a cost line too. At the Fair Work casual Level 2 food and beverage rate of A$33.85 an hour, 40 minutes a day of phone time across seven days trading is about A$687 a month, which is more than most venues would ever recover in no show fees. The rates are on our page covering hospitality award rates in Australia.
If your recorded no show rate is at or under the Australian 1.41%, and your bookings are mostly two and four tops, a fee will cost you more in front of house arguments and card declines than it returns. Be honest about which problem you have. If the phone is the leak, fix the phone. If large parties are the leak, take a deposit on large parties only and leave everyone else alone. If nothing is leaking, do not add friction to a booking flow that works.
An AI receptionist is one way to make sure the day of call gets answered, and it is what Skai Solutions sells, so weigh that accordingly. It is not the only way and for a venue whose phone mostly carries supplier calls it is not the right buy.
This page summarises published regulator guidance and is general information, not legal advice. Booking terms are a contract and a lawyer should read yours before you rely on them.
Fifteen minutes, your booking rules, the 6.40pm call that never gets picked up.
Book a Free DemoYes, and it is usually the cleaner option. Holding card details and charging only when the booking is missed is still a contract term, so the same disclosure and transparency rules apply, but the amount is easier to justify because you only charge on the event you told the guest about.
If you cancel, you have not suffered the loss the fee exists to cover, so keeping it is exactly the one sided term the ACCC names as an example of unfairness. Refund it, and say in your policy that you will.
In Australia the unfair contract terms rules cover small business contracts where the other business has fewer than 100 employees or under A$10 million turnover. In New Zealand they were extended to standard form small trade contracts on 16 August 2022. So yes, a corporate Christmas booking is usually covered.
Five days from sign up to live calls with Skai Solutions. You keep your number, calls divert to the agent, and the divert can be on during service only, after hours only, or all the time.
More: what a restaurant phone system costs in Australia, or Skai Solutions pricing.