Deposits and cancellation policies: what to charge and how

What a policy is for

A cancellation policy is not a way to make money from clients who change their plans. Its job is to protect the time you set aside, to give clients a fair warning, and to make the rules the same for everyone. Most clients will never trigger it. The ones who do should not be surprised.

Without a policy, the cost of a late cancellation falls entirely on you. With a policy that is too strict, you risk losing new clients who hesitate to book with a business they do not know yet. The goal is a middle ground that fits your services, your clients and how quickly you can fill an empty slot.

Before deciding anything, look at your own history. How often do late cancellations and no-shows happen? Which services are affected? How often can you fill a slot that opens the day before? The answers tell you how much protection you actually need.

The tools you can use

There are a few different tools, and they work well in combination:

• A deposit: a portion of the price paid at booking, usually applied to the final bill when the client shows up.
• Full payment at booking: the whole price up front, common for classes, workshops and packages.
• A cancellation fee: a charge if the client cancels after a set deadline or does not show up.
• A cancellation window with no charge: a clear deadline for changes, backed by reminders and a friendly follow-up, with no money involved.

A deposit is often simpler than a fee. The money is already collected, the client knows what is at stake from the start, and you do not have to chase anyone after a missed appointment. A fee collected after the fact can feel like a penalty, and it is harder to recover.

You do not need to use the same tool everywhere. Many businesses ask for a deposit on long services and on first visits, take full payment for classes, and rely on a simple cancellation window for short services that are easy to rebook.

Think about the client experience too. A deposit taken by card at the moment of booking feels like part of reserving the time, the same way a client might pay to hold a table or a seat. A deposit requested later by text or by phone feels like an afterthought, and some clients will simply not reply. If you are going to ask for one, ask at booking.

How to choose an amount

There is no single right amount, but there are useful ways to think about it. Start with what an empty slot costs you: the time, any product or materials you prepared, and the client you may have turned away. The deposit should be large enough to make the booking feel real, and small enough that a new client does not hesitate.

Common approaches include:

• A flat amount for every booking, which is easy to explain and easy to remember.
• A share of the service price, such as a quarter or a half, so longer and more expensive services carry a larger deposit.
• A deposit for new clients only, with regulars booking without one.
• A deposit only for services that are long, costly or hard to fill at short notice.
• Full payment for classes and events, where every spot held is a spot someone else cannot take.

Whatever you choose, make it clear whether the deposit counts toward the final price. Clients are much more comfortable paying a deposit when they know it is part of the bill, not an extra charge.

It also helps to revisit the amount over time. If late cancellations drop and your slots fill reliably, you may be able to lower the deposit or drop it for some services. If a particular service keeps losing slots, a higher deposit or full payment for that service alone may be fairer than a stricter rule for everyone.

Setting the cancellation window

The cancellation window is the deadline after which a client can no longer cancel or reschedule without losing their deposit or paying a fee. Many businesses choose 24 hours. Some choose 48 hours or more for long services, special preparation or busy seasons. Some choose a shorter window for quick services with plenty of demand.

The right window depends on how long you need to offer the slot to someone else. If you have a waitlist of clients who want earlier times, you can often fill a slot with less notice, which means a shorter window may be fair. If filling a slot takes days, a longer window protects you better.

Decide in advance how you will handle exceptions such as illness, family emergencies or bad weather. Many owners waive the policy in genuine emergencies, especially for regular clients. Deciding the rule ahead of time keeps it consistent and keeps you from negotiating each case at the front desk.

Finally, separate cancelling from rescheduling. A client who moves their appointment within your window is not the same as one who cancels. Many businesses allow a reschedule without charge if it is made before the deadline.

Writing the policy so clients read it

A policy only works if clients see it before they commit. Write it in plain words, keep it short and put it in the places clients actually look: on your booking page next to the services it applies to, at the moment of booking before any payment, in the confirmation message and in the reminder.

A clear policy usually answers these questions:

• How much is the deposit, and is it applied to the final price?
• What is the deadline for cancelling or rescheduling without a charge?
• What happens if the client cancels after the deadline or does not show up?
• How can the client cancel or reschedule?
• Who should they contact if something urgent comes up?

A short version might read like this: your deposit holds your appointment and is applied to your service. You can cancel or reschedule up to 24 hours before your appointment. After that, the deposit is not refunded. Adjust the details to your own policy and keep the tone friendly.

If you are introducing a policy for the first time, tell your regular clients before it applies to them. A short message explaining why, usually that late cancellations make it harder to see everyone who needs an appointment, goes a long way. Clients who hear about a change in advance tend to accept it. Clients who find out at checkout tend to remember it.

Local rules and fairness

Rules about deposits, cancellation fees and refunds vary by place and by type of business. Before you charge a fee or keep a deposit, check the consumer protection rules that apply to you, and get advice if you are unsure. This guide describes common practices, not legal requirements.

Whatever the rules, a few habits protect both you and your clients. State the policy clearly at booking, before payment. Apply it the same way to everyone. Keep a record of what the client saw and agreed to. And when a client disputes a charge, listen first: a polite conversation often keeps a client who would otherwise leave for good.

How BookingHub handles payments and deposits

With BookingHub, you can take a payment or a deposit by card when a client books. Each service asks for the full price, a fixed deposit or a percentage of the price, and the rest is paid at the appointment. Payments go to your own Stripe account. BookingHub keeps 1% of each online payment, and Stripe charges its own processing fees. There is nothing else on top.

You set a cancellation cutoff, and clients can cancel or reschedule from their account only before it. You can choose to approve every request or only new clients, sell packages of prepaid sessions and memberships, and offer discount codes. For events, each one can carry its own refund policy.

You can add your own message to the confirmation email, which is a good place to repeat your policy in a sentence or two, and your reminders give clients one more chance to change their plans before the deadline.