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Deposits & Cancellation Fees: Are They Backfiring on You?

We’ve all been there. You schedule an appointment to get your hair cut, your teeth cleaned, or your car serviced a few weeks or a month ahead of time. But on the day of the appointment, you’re busy or you simply don’t feel like doing it.

Turn the tables and put yourself in the business owner’s position now. 

When you make time to see a patient or a client, you prepare, and you reserve that time so no other patients or clients can use it. 

But most importantly, you expect the other person to show up or at the very least extend the courtesy of cancelling the appointment. Unfortunately, that doesn’t always happen. And this is how businesses can lose money and a lot of it.

So what is a small business owner to do?

A couple solutions many businesses try involve deposits or some sort or charging a cancellation fee. But what impact does that have on your relationship with your customer base? 

Keep reading to see what the legal implications are, what impact deposits and cancellation fees have on customers, and what other options you have to solve this problem.

Legal Considerations of Appointment Deposits and Cancellation Fees?

GoReminders customer looking at watch.

With GoReminders, give your clients the courtesy of an appointment reminder that will help them avoid cancellation fees.

Whether you own the hair salon, the dental office, or the auto body repair shop, you want to discourage your customers from backing out of those service appointments at the last minute. 

But is it legal to do so?

The law does allow businesses to create their own policies, fees, and service agreements in accordance with specific state laws. Just be sure you’re familiar with those laws and you clearly communicate your policies. Include terms like:

  • Non-refundable deposits to hold an appointment
  • Specific dollar amounts in cancellation fees
  • Specific hour cancellation windows (often 12, 24, or 48 hours in advance)
  • Enter a credit card to hold the appointment (card will not be charged until service is complete)
  • You must put a % down to reserve the service
  • Deposit required for services over a certain amount

Many businesses will take credit card information in advance since it is extremely difficult to charge a cancellation fee after the fact without losing the customer. 

Of course, you can’t charge customers the full price for a service that hasn’t been performed, nor should you.

Impact on Customer Relationships

Happy GoReminders customers

Use GoReminders to customize your reminders and add a touch of personalization your clients will appreciate.

The impact on customer relationships and how much you should concern yourself with that impact will vary depending on the industry and business model with which you work.

If you own that hair salon we mentioned earlier, a cancellation is going to result in an empty chair. That situation will cost you time and money. If you’re an attorney who is making a trip across town to accommodate a client at his or her office, a no-show is going to cost you time and money. 

So you might not want to nurture a relationship with clients who will cancel. In the cases above, the fee makes sense.

But if you’re working in online sales and a no-show means you wait five or ten minutes while you get other billable work done, a cancellation fee doesn’t really make sense.

In either situation, no cancellation fee or deposit has ever helped nurture brand loyalty or deepened a relationship with a client. So weighing the costs against the benefits is always going to be an effective exercise.

Get Ahead of Cancellations

Happy business owner managing appointments on GoReminders app.

GoReminders automated text and email reminders allow you to send the right message at the right time.

Being proactive, rather than reactive, is always your best bet. Not only can you completely avoid the awkward scenario of creating resentment in your customers, you also help them stay on top of their appointments so you can provide them the value they were seeking in the first place.

Any appointment booking app worth its salt will have an automated email and text message reminders feature. With that feature, you can automatically send customized reminders to your customers prior to their appointment. And it’s super easy – you simply set it and forget it.

Automated appointment reminders reduce the risk of no-shows and eliminate the human error of accidentally overlooking a scheduled appointment. 

And of course, there is the revenue boost your business will get when your clients and patients actually show up. Text and email reminders have been proven to eliminate 80% of no-shows and no-calls. For you, that means a significant boost in revenue from 18% to 28% according to some studies.

Start Boosting Revenue Today

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Using GoReminders you will fill empty spots on your calendar and reduce cancellations with ease.

Using automated appointment reminders to eliminate no-shows shouldn’t be complicated. GoReminders is simple and easy to use. Setup takes 30 seconds and your reminders are ready to start sending. Use our Reminder Templates or customize Reminder Templates as you would like. It’s that simple. To register use this link to sign up for a free 14-day trial (credit card not required).

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