The idea is that you prepay for your meals and get a discount for doing so. But this also means you must anticipate how much you'll eat each day and that you'll be eating at participating Dining plan locations.
The plan consists of a certain number of counter service and table service, drinks, entrees, side dishes, and deserts. And by combining side dishes you can upgrade to entrees, or by combining lesser walk up counter service items you can upgrade to a table service item. Easy right?
However I've often felt that the success of the the Dining Plan depends heavily on both your knowledge of the plan, which is itself intentionally obfuscated, AND the expertise of the intentionally under-trained cashier ringing up your food and applying your credits correctly. I've often stood in line listening to people in front of me either struggling to understand the plan or complaining to cashiers for ringing them up incorrectly.
Bottom line, it's a shell game. And the discount you get upfront is not realized. Their profit is based on food credits going unused. But it's obviously profitable for them given the frequent upsell you will get pitched every time you call Disney.
Give yourself your own discount and bring as much of your own food into the parks, especially water and treats. You'll save money, and time and energy from not standing in line.
Although it's not for us, we do know people who enjoy success with it. So from another point of view, it is possible, if you follow the plan, and eat all your credits, that you will save money with the Disney Dining Plan.
Here's an article from another blog with a detailed analysis.
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