Technology

Order cancellations cost the typical restaurant up to 3% of digital sales, new data show

A study from the tech supplier Otter found that the usual causes are a delivery taking too long or a kitchen being unable to keep up with incoming orders.
Digital customers tend to cancel when they feel a delivery is taking too long. | Photo: Shutterstock

Between 1.5% and 3% of a restaurant’s digital sales are lost per week because of orders being cancelled by customers or staff, usually as a result of deliveries taking too long or the kitchen being overwhelmed by incoming volume, according to data from the tech supplier Otter.

The cancellation rate fluctuates widely over the course of a typical business day, the company found in analyzing the online transactions it processes. As much as 6% of digital sales can be lost between 10 p.m. and 4 a.m., Otter found, though it did not offer an explanation of why cancellations jump during that timeframe.

Most of the canceled business comes during the peak hours of 5 to 8:59 p.m., when 32.2% of digital orders are placed. Nearly a third of all cancellations (29.9%) fall within that window, according to Otter.

Yet cancellations remain high through the night, it found. Only 4.2% of a typical restaurant’s digital orders are fielded from 9 to 9:59 p.m., yet 8.2% of the day’s cancellations come during that stretch.

A restaurant’s staff is most likely to drop an order during the last hour the establishment is in operation, apparently because of doubts the meal can be prepared and dispatched before shutdown time. About a third of cancellations come during that final 60 minutes of operation.

The dynamic prompted Otter to recommend that restaurants provide a buffer on order execution so an order that comes in at 9:59 p.m. can still be handled if the place officially closes at 10.

Pizzerias are the most likely victims among conventional restaurants of having an order killed, with a cancellation rate of 2.6%. The usual cause is a customer unwilling to continue waiting for a delivery, Otter said.

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