You can keep a genuine Christmas party deposit when a group cancels or doesn't turn up, as long as it's a small percentage of the price and you told them clearly at booking when it wouldn't be refunded. Anything bigger, like a fully prepaid menu, you can only keep as far as it covers what the cancellation actually cost you, after you've tried to fill the table again. There's no 14-day cooling-off on a dated party booking. And if it's you who can't open, you refund.
That's the short answer, and it comes from the Competition and Markets Authority's unfair terms guidance, which was reissued on 22 July 2026. What ranks for this question at the moment is a Morning Advertiser piece from 2010 about snow, a few booking-system blogs and pub chains' terms pages. None of them quote the law that decides it. Here it is in plain English, with the sums, a set of booking terms you can copy and the one habit that saves more money than any deposit.
Deposit or prepayment: they're treated differently
This is the bit most pubs blur, and it's the bit that matters if a customer ever pushes back.
- A deposit holds the date. The CMA's 2016 advisory letter to wedding and event venues describes it as "a reservation fee for the services and so are a small percentage of the total price".
- A prepayment is part or all of the price paid early. A full pre-paid Christmas menu is a prepayment, not a deposit, even if your booking form calls it one.
For a deposit, the CMA's guidance (CMA37, paragraph 6.62) says "a genuine deposit may legitimately be kept in full as long as it operates as a binding reservation and the trader makes clear to the consumer at the earliest opportunity that a deposit is required, and the precise circumstances in which it would be non-refundable." The same paragraph adds the limit: "such a deposit will not normally be more than a small percentage of the price. A larger prepayment is more likely to be unfair as it may amount to a disguised penalty."
For a prepayment, paragraph 6.60 says a term making "any substantial prepayment entirely non-refundable, regardless of the circumstances or the amount of costs and losses caused" is more likely to be unfair. What you can keep is what's "reasonably needed to cover either their unavoidable net costs or the net loss of profit resulting directly from the default".
The CMA doesn't put a number on "small percentage". I wouldn't go much past 10% to 15% of the party's total for a deposit you intend to keep in full, and I'd treat anything above that as a prepayment.
What the sums look like on a real booking
Take a party of 20 on the average three-course Christmas menu of £36 a head, which I covered in my Christmas menu pricing guide. That's £720.
| What you took | Amount | If they cancel or don't turn up |
|---|---|---|
| Deposit, £5 a head | £100 (14%) | Keep it, if your terms said so at booking |
| Full prepayment | £720 | Keep only your real loss, refund the rest |
| Real loss, table not resold, food already bought | About £720 | Lost profit plus food you can't use: close to the lot |
| Real loss, table resold to walk-ins at the same menu | Close to £0 | You've lost very little, so you keep very little |
That last line is the one people miss. Paragraph 6.63 says cancellation charges should allow for "any ability of the business to mitigate (reduce) any loss following the cancellation, for instance by finding another customer", and for savings from no longer having to provide the service. If the Saturday before Christmas is full of walk-ins and you fill the table, keeping a full £720 is a windfall the CMA would call unfair. If it's a wet Tuesday and you'd bought the turkey, you've lost most of it.
A sliding scale that holds up
Paragraph 6.64 says "it may be acceptable for a contract to contain a sliding scale of termination or cancellation charges but there must be no circumstances in which they are likely to be disproportionate or punitive." Here's the shape I'd use. The point is that each step tracks a real cost getting closer, not a penalty getting bigger.
| When they cancel | What you keep | Why |
|---|---|---|
| More than 4 weeks before | The deposit only | Plenty of time to rebook the date |
| 2 to 4 weeks before | Deposit, plus anything you've already spent on that party | Crackers, a booked DJ, special orders |
| Under 7 days or a no-show | Up to the full prepayment, minus what you save and what you resell | Food is ordered, staff are rota'd, the date is hard to refill |
Keep a note of what you did to resell a cancelled slot and what you saved. If a customer complains, that note is your answer.
No cooling-off period on party bookings
Customers sometimes quote a "14-day right to cancel". It doesn't apply here. The Consumer Contracts Regulations only cover distance and off-premises contracts in the first place, so a booking made at your bar never had one. And for phone and online bookings, regulation 28(1)(h) excludes "catering or services related to leisure activities, if the contract provides for a specific date". A Christmas party on 12 December is exactly that.
When it's you who can't open
Different story. If a power cut, a flood or a burst main shuts you on the night, the contract can't be performed, and the CMA's guidance (footnote 256) points the same way it does for the customer: you don't get to keep money for a service you didn't provide. Refund or offer another date the customer is happy with.
The weather is the grey area. Back in 2010 the Morning Advertiser asked licensing solicitor Peter Coulson about parties cancelled because of snow, and his answer was: "The contract still exists. If they don't turn up, then they forfeit the deposit." He added, "You can't use the weather as an excuse." That still holds for a small deposit if you were open and serving. For a big prepayment, the 2026 guidance means you're back to keeping your real loss, not the whole lot.
How big the no-show problem is
The figures most quoted are from Zonal: no-shows cost hospitality "£17.6bn a year in lost sales" (2021), and a 2023 Zonal and CGA by NIQ study found "some 12% of consumers are still not honouring their reservations". There's better news from OpenTable's October 2026 report: no-shows across UK restaurants fell 6% year on year, and it put the cost of a no-show for a table of two at £55.70. Its diners said they'd be willing to pay an average refundable deposit or card hold of £35 a person, and 44% said a small deposit or card hold would encourage them to show up. That's restaurants, not pubs, and OpenTable bookers, not your regulars. But it says customers expect deposits at Christmas, so don't be shy about asking.
Booking terms you can copy
The CMA says the deposit terms have to be clear and given "at the earliest opportunity". So put these on the booking form, the confirmation text or email, and say them out loud when someone books at the bar:
- A deposit of £5 a person holds your date. It's not refundable if you cancel or don't arrive, unless we cancel.
- Final numbers and pre-orders by [date, 7 days before].
- If you've paid in full and cancel within 7 days, we'll refund what we can after taking off what we've spent and anything we can't recover. We'll always try to rebook your table first.
- If fewer people come than you confirmed, we'll charge the confirmed number for food already prepared.
- If we have to close, you get your money back in full or a new date, your choice.
Short, fair and it matches the guidance. Point 4 needs care: charge only for food you'd actually prepared and can't use, not for every empty chair.
The habit that saves more than any deposit
Ring the organiser 72 hours before. Not an email, a call. "Still 20 of you on Friday? Any dietary changes?" It's the cheapest no-show insurance there is, and it gives you three days to fill the gap if numbers drop.
And keep a waiting list for every December Friday and Saturday. A card behind the bar, name and number, how many. When a table drops out, you ring the list. It's how the "mitigate your loss" rule stops being a legal problem and turns back into a full pub. On the busiest nights you may lose almost nothing, which is the best outcome for everyone.
If you're doing the sums on whether a quiet night's party is worth taking at all, my guides on opening on quiet nights and opening on Christmas Day have the break-even figures.
My take
Take a small deposit on every Christmas party, always. Write down when you keep it and tell people when they book. If you take full prepayment, treat it as their money until they've had the meal, and only keep what the cancellation really cost you. That's the law, and it's also how you keep the regular who booked the work do coming back in January.
Common questions
Can a pub keep a Christmas party deposit if the group cancels?
Yes, if it's a genuine deposit, a small percentage of the price, and you told them clearly at booking when it wouldn't be refunded. CMA guidance says such a deposit "may legitimately be kept in full".
Can I keep a full prepayment for a no-show?
Only as much as covers your real loss: the profit you lost plus costs you couldn't avoid, after taking off what you saved and anything you made by reselling the table. Keeping the whole sum regardless is likely to be an unfair term.
Do customers have a 14-day right to cancel a Christmas party booking?
No. Bookings made in person never had one, and for online or phone bookings the Consumer Contracts Regulations exclude catering for a specific date.
How much should a Christmas party deposit be?
The CMA says a deposit should normally be a small percentage of the price. £5 to £10 a head on a £36 menu is about 14% to 28%; I'd keep a fully non-refundable deposit at the lower end and treat bigger sums as a prepayment.
What if the pub has to close on the night?
Refund the customer or offer a date they agree to. You can't keep money for a service you didn't provide.
Sources
- Deposits, prepayments and cancellation charges, paragraphs 6.59 to 6.64 and footnote 256: CMA, Unfair contract terms guidance (CMA37), updated 22 July 2026.
- Deposit as "a reservation fee", advance payments reflecting actual costs: CMA advisory letter on cancellation terms, 2016, and CMA press release, Wedding venues advised to play fair, 2 March 2016.
- Unfair terms not binding, fairness test (s62) and the grey list (Schedule 2 Part 1 paras 4 to 6): Consumer Rights Act 2015, s62 and Schedule 2.
- Regulations 27 and 28(1)(h): Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, Part 3.
- Peter Coulson on snow-hit parties: The Morning Advertiser, 20 December 2010.
- £17.6bn a year lost to no-shows (Zonal): The Morning Advertiser, 21 October 2021. 12% of consumers not honouring reservations: Restaurant Online, 18 October 2023.
- No-shows down 6%, £55.70 per table of two, £35 deposit, 44%: Restaurant Online on the OpenTable Restaurant Impact Report, 6 October 2026.
- £36 average Christmas menu: my Christmas menu pricing guide, with its source linked there.
- The 10% to 15% view, the worked example, the sliding scale, the booking terms, the 72-hour call and the waiting list are mine. I'm a licensee, not a lawyer. The rules above apply across the UK; check anything unusual with a solicitor.