Deposits: Powerful or Destructive?

From the Desk of Jonathan Lim, Founder & CEO, Oddle

A few weeks ago, I went out for lunch with my wife on a Monday. We decided on a popular pizza place. When I tried to book, I was surprised: the restaurant required a $50 deposit per person.

Two thoughts ran through my head.

First: maybe the restaurant knows something I don’t. Maybe demand is so strong they can afford to put up that barrier.

Second: or maybe they’re completely wrong. After all, it was Monday lunch — a time when most restaurants are far from full.

When I arrived, the restaurant was indeed half empty. Understandably so. It’s a lull period.

That moment made me wonder: are restaurants using deposits strategically, or just applying them blindly? And how much is it really costing them?

So I dug into the stats.

The Numbers Behind Deposits

Let’s assume 1,000 people land on your reservation page.

With deposits, you reduce cancellations slightly. Without deposits, you capture significantly more bookings.

At an average spend of $50 per head, that’s $3,150 in extra revenue for every 1,000 visitors when deposits are removed.

The insight is clear: deposits don’t just protect tables — they also change customer behaviour.

Why Restaurants Reach for Deposits

The instinct to use deposits is natural. No-shows sting. Owners remember them vividly. But psychology often magnifies the problem.

• Loss aversion. One empty table feels more painful than ten full ones feel rewarding.
• Availability heuristic. The rare no-show sticks in memory, while the hundreds of diners who turned up fade into the background.
• Framing. “Reserve a table with ease” feels welcoming. “Reserve with a $50 hold” feels like a penalty — even before the meal begins.

These biases aren’t wrong, but they explain why deposits often get applied too broadly.

Where Deposits Shine — and Where They Backfire

That Monday pizza lunch illustrates the point.

• At full-capacity slots: deposits make sense. If you’re running a Friday dinner or Valentine’s night where demand exceeds supply, deposits secure certainty and reduce last-minute losses.
• At softer slots: deposits backfire. On a half-empty Monday lunch, they scare away potential customers — exactly when you should be making it easy to book.

The same restaurant can face both realities in the same week. That’s why deposits are powerful in some cases, destructive in others.

Mapping Your Calendar

Think about your business in terms of day and daypart:

• Peak slots (~40% of the year): Friday dinners, Saturday dinners, public holiday dinners, and festive nights like Mother’s Day or CNY. Deposits are a powerful lever here.
• Non-peak slots (~60% of the year): Weekday lunches, most weeknights, Saturday lunches, holiday lunches. Deposits here usually reduce demand.

This isn’t about good or bad. It’s about precision.

The Practical Playbook

Here’s the simple exercise I recommend:

1. Check your booking data by day and by daypart.
2. Apply deposits only where you’re already at full capacity.
3. Remove deposits where you’re under capacity.

Think of deposits as a scalpel, not a hammer. The smartest operators know when to apply pressure — and when to release it.

The Bottom Line

Deposits are neither hero nor villain. They are a lever.

• Used correctly, they protect your highest-demand slots.
• Used incorrectly, they choke off demand where you need it most.

Because deposits don’t create demand. Your food, your brand, and your hospitality do.

At Oddle, this is exactly the lens we bring to restaurants. We believe growth comes from understanding the data — knowing when you’re truly at capacity, and when you should open the tap to capture more demand.

That’s why we built Oddle Reserve: not just to take bookings, but to help restaurants engage, capture customer data, and drive repeat visits. It’s part of our obsession with one thing — helping restaurants grow their sales.

When you see the whole picture, deposits become just one lever among many. And used wisely, every lever adds up to stronger revenue.

Imagine a guest walking into your restaurant, browsing the menu, even ordering a drink — then walking out before the main course.

Unthinkable, right?

Yet online, it happens every day.

Whether it’s a delivery order left in the cart or a reservation abandoned halfway, these are guests who have already said yes in their minds — but something at the last step changed it to maybe later.

We’ve seen restaurants win back up to 20% of these missed opportunities just by following up automatically. For some, that’s thousands of dollars a month recovered without spending a cent on ads.

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