Can Restaurants Keep a Deposit? 2026 Rules, Refunds & How to Collect Online

First, is it a "deposit" or legal "earnest money"?

Many owners use the words interchangeably, but legally they differ — and the difference decides whether you can keep the money when a guest no-shows.

• Earnest money (a civil-code term): once paid, the contract is formed. If the payer (guest) breaches, they generally cannot claim it back (it can be forfeited); if the recipient (restaurant) breaches, it must be returned at double.
• "Deposit" (everyday word): not a strict legal term; in practice it is often treated as earnest money or a prepayment, governed by what both sides agreed in advance.

In plain terms: the "keep the money on a no-show" effect doesn't come from the label — it comes from setting the rule clearly in advance and getting the guest's consent.

Can a restaurant refund a deposit? Three scenarios

• Guest shows up on time: the deposit is usually credited toward the bill (most common).
• Guest cancels before the cutoff: whether and how much you refund depends on the policy you posted in advance (e.g. full refund 48h before, none within 24h).
• No-show / fails to arrive: if clearly disclosed in advance and consented to, it can usually be forfeited per the agreement as compensation.

One key idea: "say it in advance." Forfeiting without prior, prominent disclosure carries the highest dispute risk.

How consumer-protection rules see it — common disputes

From a consumer-protection angle, a restaurant deposit usually needs to:

• Be disclosed prominently, in advance: amount, refundability and forfeit conditions must be visible before the guest pays — not buried afterward.
• Not be manifestly unfair: your standard terms must follow good faith; forfeiting the full amount without notice is more likely to be held invalid.
• Be proportionate: the forfeited amount should match actual loss; an excessive penalty can be reduced.

In practice, writing a clear "Reservation / Deposit Policy" and having guests see and accept it during booking is the best way to cut disputes.

This is general information, not legal advice for your specific case. Situations differ; for significant disputes or reviewing standard-form contracts, consult a qualified lawyer or your local consumer-protection authority.

Legal basis (Taiwan)

The provisions most relevant to restaurant deposits / earnest money are below; actual application depends on the specific case. Refer to the official Laws & Regulations Database for the current text.

• Civil Code Art. 248: where one party receives earnest money from the other, the contract is presumed formed.
• Civil Code Art. 249 (effect of earnest money): on performance it is returned or credited to the payment; if non-performance is attributable to the payer, the earnest money cannot be reclaimed; if attributable to the recipient, it must be returned at double; if attributable to neither party, it is returned.
• Civil Code Art. 252: an excessive agreed penalty may be reduced by the court to a reasonable amount (an over-high forfeit can be cut down).
• Consumer Protection Act Art. 11: standard-form terms must follow the principle of reciprocal equality; ambiguous terms are construed in favor of the consumer.
• Consumer Protection Act Art. 12: standard-form terms that violate good faith and are manifestly unfair to consumers are void.

Note: the "Consumers' Foundation" (中華民國消費者文教基金會) is a private consumer-advocacy NGO; its views are informative but not law itself — the binding authority is the Civil Code and Consumer Protection Act above.

How much deposit should you charge?

• Walk-in tables: none, or a small token (NT$300–500 per head).
• Large tables / private rooms / holiday peaks / collab events: no-show losses are big, so charge more (e.g. NT$1,000–2,000 per head, or 30–50% of the expected check).
• Rule of thumb: high enough that a no-show actually hurts, low enough not to scare off normal guests. Use the no-show loss calculator to size your monthly loss, then back out the amount.

How to collect deposits online and cut no-shows automatically

Collecting deposits by hand (bank transfers, manual reconciliation, tracking refunds yourself) is error-prone and slow. A reservation system that collects deposits online does three things:

• Pay-to-bind: the guest pays the deposit during online booking; the reservation only counts once paid, filtering out casual bookings.
• Policy up front: refundability and forfeit terms show before payment and the guest taps to accept — exactly the "disclose in advance" that consumer law wants.
• Automatic reminders: SMS + Email the day before and day of, further reducing forgotten bookings.

Eatsy is usage-based: from NT$3 per booking, plus NT$5 per booking if you collect a deposit, with no monthly fee and no lock-in and a 7-day no-card trial. No bookings, no charge — ideal for small/independent restaurants with big seasonal swings. Eatsy is built to help cut no-shows and lift arrival rates; actual results vary by restaurant. Guests book via a web form (no app); reminders go by SMS + Email.

Ready to collect deposits online? Start a free 7-day trial (no card, no lock-in) and turn on a deposit policy in minutes. Want to compare first? Read Taiwan reservation systems 2026: 6 compared and inline alternative: Eatsy.

Copy-paste deposit policy template

Swap in your restaurant name and hours, then post it on your booking page, the back of the menu, or your IG pinned post:

[○○ Restaurant — Reservation & Deposit Policy]
1. Large tables / private rooms / holiday periods require a deposit of NT$○○○ per head, fully credited toward your bill on arrival.
2. To cancel, contact us at least ○○ hours before your seating for a full refund; no cancellation within the window or a no-show means the deposit is non-refundable, as compensation for holding the seats.
3. If the restaurant cannot serve for any reason, the deposit is refunded at double or rebooked.
4. Completing the deposit payment constitutes acceptance of these terms.

(Template is for general reference; adjust to your operations and local law.)

Do you need to issue a uniform invoice for a deposit — and for a forfeited one?

Short answer: whether you issue uniform invoices (統一發票, Taiwan's official receipt) is decided by the National Taxation Bureau, not by you or the guest. If you're registered to issue them, you don't issue one when the deposit comes in — you include the deposit in the bill and issue one invoice when the guest pays after the meal. If a guest cancels or no-shows and you keep all or part of the deposit, you issue an invoice for the amount you keep. The part you refund needs no invoice.

General information about Taiwan's rules, not tax advice. The Ministry of Finance and your local National Taxation Bureau have the final word; ask a bookkeeper or accountant about your own case. Last updated: September 2026.

First: does your restaurant have to issue invoices?

• No (exempt): small-scale businesses with monthly sales under NT$200,000, and everyday eateries (soy-milk breakfast shops, noodle shops, buffets, lunch-box shops, snack stalls — a "special nature of business") that the tax bureau has approved as exempt. Not every everyday eatery is exempt; it depends on the bureau's decision. The tax bureau assesses their business tax at 1% (Business Tax Act Art. 13; Ministry of Finance, March 2026).
• Temporarily exempt: chains, franchises, viral hot spots or busy everyday eateries that would otherwise have to issue invoices can stay exempt from 1 January 2026 to 31 December 2028 if they adopt mobile payment or self-order kiosks and are approved.
• Every other restaurant: must issue them (Business Tax Act Art. 32).

Not sure which you are? Enter your business ID in the Ministry of Finance's tax registration lookup and check the "uses uniform invoices" (使用統一發票) field.

If you issue invoices, you issue them unasked

Art. 32 requires the seller to issue the invoice and hand it to the buyer. It is the restaurant's duty, not something the guest has to request — and even if a guest says they don't need it, you still issue it (it can go to their mobile carrier or be donated). So it's best not to write "if you need an invoice, please ask the restaurant" in your deposit or refund policy. The sentence itself isn't what gets penalised — not issuing the invoice is. But it tells guests they only get one if they ask, staff tend to follow it literally, and any single sale left uninvoiced is an unissued invoice under the law.

When to issue: at checkout, not when the deposit arrives

The official timing table attached to the Business Tax Act says ordinary food service issues the invoice "at settlement" (for meals not paid by voucher), and the Ministry of Finance has confirmed that restaurant and banquet booking deposits are invoiced at settlement. One exception: if you sell meal vouchers or prepaid set tickets, the table says to issue the invoice when the voucher is sold. A fully prepaid, strictly non-refundable special seating is close to selling a voucher and may be treated the same way — ask your local tax bureau.

A forfeited deposit needs an invoice too

When a guest cancels or no-shows and you keep the deposit under your stated policy, that money is a penalty you received because of the sale of your dining service. The Ministry of Finance's rule is that penalties received in connection with a sale must be invoiced and reported for business tax.

• Invoice what you keep. Example: NT$1,000 deposit, 50% kept and NT$500 refunded → invoice NT$500.
• The refunded part needs no invoice.
• With no meal and no checkout, issue it when you decide the deposit is kept and not refunded.

What happens if you don't?

Under Business Tax Act Art. 52, an unissued invoice caught before the filing deadline means paying the tax plus a fine of up to 5× the tax, capped at NT$1 million; caught three times within a year, the business can be suspended.

Two clauses to add to the template

5. We issue uniform invoices as required by law: the deposit is included in the bill and invoiced at checkout; any deposit kept because of a cancellation or no-show is invoiced for the amount kept.
6. Refunds are made by bank transfer. If the guest cancels and the transfer is inter-bank, a NT$30 transfer fee is deducted; if we cancel, or the cancellation is due to force majeure, the full amount is refunded with no fee.

Only add clause 5 if your restaurant issues invoices. If you add clause 6, change "full refund" in clause 2 to "refund minus any inter-bank transfer fee" so the two don't contradict each other.

For how registration works and how the tax bureau decides whether you issue invoices, see Opening a restaurant in Taiwan: registration, tax ID and uniform invoices.

Going further: can you forfeit the whole deposit? Five compliant designs

The three sections below were merged from our separate post on forfeiting deposits in September 2026 — it answered the same question as this page, so the old URL now redirects here.

5 compliance-design principles

1. Deposit amount: design by restaurant type

Many assume "there's a statutory percentage cap" — for ordinary restaurant reservations, there isn't. Consumer Protection Act Article 12 regulates only "manifest unfairness" — no specific percentage. In Taiwan today 50%, even 100% prepayment is mainstream. The key isn't how much you charge — it's "the higher the deposit, the more complete the supporting design".

Industry ranges by restaurant type:

• Regular dine-in (single-table booking): NT$200–500 per person, or 10–20% of total
• Chef's table / tasting menu / high-ticket reservation-only: 20–50% of total (prep + labor cost justifiable)
• Special events / holiday-limited / collab seatings: 50–100% prepayment is common in Taiwan, provided you have reasonable cancellation policy + reschedule / transfer mechanism

Exception: banquet / catering / 訂席 services are subject to the Ministry of Health's "Mandatory and Prohibited Provisions of Standard-Form Contracts for Banquet & Catering Services" — 20% statutory cap. Doesn't apply to regular restaurant reservations, but worth knowing.

100% prepayment + free cancellation up to 7 days before is safer and more court-defensible than 30% + "no refunds ever". Full legal basis and percentage benchmarks available in the deep-dive guide.

2. Proportional deduction, not "all-or-nothing"

Design cancellation policies as a tier, not a binary. Example:

• 48+ hours before: full refund
• 24–48 hours: 50% deducted
• Within 24 hours / no-show: 100% deducted

This pattern follows the "proportional calculation" spirit of Civil Code Article 249 and is widely upheld by courts.

3. Clear disclosure, not buried small print

The deposit policy must be communicated before the customer commits, and must be "clear":

• Prominently shown during the reservation flow (not footer fine print)
• Requires checkbox consent to complete booking

Transparent disclosure within the booking flow is enough. The Consumer Protection Act test for "manifest unfairness" looks at "whether the customer had a chance to review pre-booking" — the booking page satisfies this.

4. Reserve room for exceptions

Force majeure must be written in: natural disasters (typhoon, earthquake), major traffic incidents, sudden illness (with proof). These refunds look like a loss, but in practice:

• Brand reputation protected
• Consumer-council complaints sharply lower
• Customer remembers "this restaurant is reasonable" → return rate up

Handle case-by-case via mutual discussion. Don't require documentation — demanding a doctor's certificate or police report is too rigid and damages brand goodwill. Suggested wording: "For force majeure events (natural disaster, major traffic incident, sudden illness), reschedule or refund may be applied for, subject to the restaurant's reasonable case-by-case judgment." Keeps flexibility for both sides.

5. Records management: paper-trail every deposit transaction

If the Consumer Protection Council comes knocking, the burden of proof is on you. You must show:

• Customer saw and consented to terms before booking (screenshot / system log)
• Customer's actual breach (no-show timestamp / contact log)
• Your deduction amount is reasonable (food cost / opportunity cost estimate)

Manual LINE deposit collection is the biggest weakness here — no structured records. Once a dispute hits, you have nothing to show. A reservation system's value here is precisely automatic record-keeping.

Usable deposit clause template (reference version)

Generic template for a typical restaurant. Reference version only — have your retained legal counsel review before going live:

Reservation Deposit Policy

1. Reservations require an upfront deposit of NT$200 per person (or 10% of estimated total spend). Fully credited toward the meal upon arrival.

2. Cancellation:

• 48+ hours before meal: full refund
• 24–48 hours: 50% deducted
• Within 24 hours / no-show / arrival 15+ minutes late: deposit deducted up to actual damages (max 100%)

3. Force majeure (natural disaster, major traffic incident, sudden illness): reschedule or refund subject to restaurant's reasonable judgment.

4. Damage calculation: includes pre-purchased ingredients, table opportunity cost, staff scheduling cost. If actual damages are lower than deposit, the difference is refunded.

5. Party-size changes: adjustable for free up to 24 hours before; later changes of more than 1 person counted as partial cancellation per the policy above.

Key: proportional + credit-based + exception-handling + transparent disclosure. Every line covers a point a lawyer would attack.

3 common dispute scenarios + prevention

Scenario A: Customer 5–15 minutes late

Consumer Protection rulings lean against full forfeiture for short delays. Practical approach:

• 0–10 min late: seat normally, deposit credits the bill (no loss)
• 10–30 min late: hold the table but inform customer it may go to waitlist; deposit credits the bill
• 30+ min late: treat as no-show; apply cancellation policy (100% deduct within 24h)

Pair with automated reminders (24h + 2h pre-arrival LINE / SMS) to cut down on lateness disputes.

Scenario B: 6-person booking arrives with 4

"Entire reservation cancelled" loses in court. Reasonable handling:

• 24+ hours notice on party-size change: free adjustment
• Same-day or on-arrival notice: per-head proportional deduction (e.g., NT$1,200 deposit, -2 heads = -NT$400); remaining 4 dine normally

Reasonable flexibility wins return customers; rigid rules don't.

Scenario C: Customer claims traffic, demands full refund

"Traffic" usually doesn't qualify as "force majeure" (unless major public-incident bulletin). Handling:

• Customer contacts pre-arrival: try to hold the table; deposit transferable to next booking or normal seating
• Post-event complaint of "should be fully refunded": cite the policy, provide the screenshot of cancellation rules and customer's prior consent

Structured records save you here.