What can be done, legally, when the customer says he/she doesn't have any money to pay in a restaurant?
In the case of a customer's card being declined or a customer realizing they don't have enough money to pay the bill when it is presented to them, what actionable steps should be taken?
First, how would you handle this as an owner or manager without taking legal action?
Second, if payment is not collected within a reasonable amount of time, then what legal action can you take?
Fortunately, I have not had to face a situation similar to this in my restaurant yet. I would like to be prepare myself and the top management team for an instance where an event like this may occur.
There is what is "right" and what is "smart". What is right is that you should get paid. However, depending on the situation, getting paid is likely to cost you a lot more than you'll recover. If you make a scene (or force the customer to do so), you will create negative impressions for everyone there... i.e., people who might be return customers but now won't be (and will tell their friends why). If you call the police, you will have to take your time to do the paperwork. If you take legal action, you can bet the costs for the lawyer will be more than you recover.
"Smart" is to understand this. Realize that some people really may end up in a pinch... and that sometimes it may be through no fault of their own. (Consider someone whose card is put on hold by the bank while he's dining with you... because the card had been hacked and was being used fraudulently.) Assume this is the case... that people don't have bad intentions... and treat the person respectfully and warmly. Ask for a commitment to pay the next day, and copy down appropriate identification. You can also ask them to thank you for not making a fuss via a positive review on social media. Ask them to pose for a picture too. Then send them on their way, thanking them as you would any other patron.
Then one of two things will happen. They may pay you, which is great. Or they may not... in which case you should circulate their identification with other restaurateurs in the area. (Remember that picture?) They in turn will repay you via tips on others who do not pay. So, either way, you win.
If you try the officious/legal route, you will lose even if you win the case.
Charlie, what a great question.
Let me tell you what I would do.
1. Don't make a fuss about it.
2. Be very professional, and matter of fact, remember you're in the public space and word of mouth / social media can hurt you.
3. Ask for their ID. Drivers licence etc. Check the mobile number by sending a short text while they are with you.
4. Ask for their business card, if they have one.
5. Ask if the dining today is business related.
6. Write out an simple invoice. including date, time clients name and address, and licence number.
7. Itemize what was ordered and the prices.
8. State that the invoice is to be paid within an agreed time.
9. Have the client sign as acceptance of the invoice and the payment conditions.
This way you have generated a legal document of sale / service.
If it's business related make the invoice out to the company, and send a copy directly to the company's accounts department.
Depending on the value, you then have a legal standing to engage and debt collection agency, or any other legal avenue you need to take.
Also you then have a document which you can use as a write off / expense cost.
You only need a simple duplicate or triplicate note book
hope this is helpful.
I think I would agree with Barry Enloe. It's the cost of doing business. My entire career was in hospitality, from the age of 14 to 46, and meals get comp'ed from time to time. Why make a big deal out of it?
If you consider the negativity that can erupt by discussing this matter either at the register or at the table, you're inviting your patrons to eavesdrop. If it is a case of deliberate scamming you, that's one thing. If it is a simple case of "oops, I'm so embarrassed," that's an opportunity to polish your brand.
Make it a reason to celebrate! Congratulate this person with applause and cheers as your 1 millionth customer. Make it a Big Deal~
If you laugh it off rather than stew over losing one meal, the rest of your day will go well instead of miserable.
Help this time by paying for him or her at least for this time!
I have had to face this multiple times and as I have learnt, your Brand Image is the most important one. There needs to be a firm hand on your authority and restaurant terms as well as an inviting environment for guests. The best way to handle this situation is to be warm with the customer and seek a solution that does not make the customer feel like you are a no cash, no service restaurant. An option would be to ask the customer to come into a private room for a conversation on a possible solution. If however the customer refuses and is aggressive, then you have to quickly close his/her business by getting them out of your restaurant in the nicest way possible. Either by using your restaurant security or by gently asking them to leave without paying. Ultimately, your restaurant image needs to be protected for actual paying customers to feel, safe and most important, encouraged for days when they just might be in those shoes of not being able to pay but knowing you would treat them fairly.
I think certain policy shall be maintained with the concentration of two points
The reputation of the restaurant & the financial issues Second Not to the negative side with clients, e,g In case customers is well known for the restaurant management then no action can be taken against him otherwise details, payment.Contact information of any documents can be kept for the payment.
You legally chalk it up to the price of being in the restaurant business. Like having to pay the plumber. You tell your employees to smile and be gracious and tell the customer to have a fantastic day and you hope they come back again (and again. and again.)
Because mostly in the age of debit cards it is an honest mistake. If it happens a second time you know not to serve that person the third time.
Trust your BELLY and then decide how much it is going to cost you to bring any legal action against them and do it yourself----Forget paying a lawyer for a collection of a meal not paid, unless it is a big party then I would get something up front.....Another possibility is say "Cash Only" and make that a rule in your restaurant.... And BTW you will lose some payments due to bad credit most businesses experience that in some form or another....
Per Walter Wise, definitely ask your attorney. But you should take any action balancing the short-term versus long-term financial issues. The basic question is: would you want to have return business from that person?
If someone legitimately messed up and forgot their wallet -- it can happen -- then take the person's information down (cell phone #, etc.) and get them to promise to pay you within 24 hours. Get their license plate number as well since the information they give you could be fake. You can probably tell if someone is feeding you BS or not, but someone could fool you. Handling it in a professional manner may gain you lots of goodwill and good word-of-mouth. The last thing you want is s scene in the restaurant since it will impact a dining-room's worth of impressions.
On the other hand, if someone is clearly trying to rip you off by simply walking out without paying, call the police -- and get their car's license plate #s. It clearly is against the law.
Decades ago, I had someone not pay for a bed I had delivered. I got this sob story about running out of checks -- this was before credit cards were universal. (Yes, there was such a time.) She seemed genuine. She wasn't. Multiple letters, including certified, did nothing. I won in small claims court by default but there's no collection mechanism. Finally, I called the local DA. Turned out she was pulling the same thing on other merchants. She was arrested. Restitution was made by her family. Charges were dropped. And I believe she was then forced to deal with her personal problems.
Seems to me that this is a question to ask your attorney. Different states have different laws so you need to get a professional opinion in your state.