Expert Talk: Softening the Blow of a Cancellation Fee

Founder of his namesake beauty hub in Melbourne’s Toorak, James Vivian is emblematic of a modern, inclusive beauty industry. This week, James unpacks: the cancellation fee.

To cancellation fee or not to cancellation fee…that is the question that seems to plague skincare business to skincare business.

Today I am speaking to those of you, myself included, who made the hard yet good-for-business decision to instigate a cancellation fee.

How much do I charge?

At James Vivian, in order to secure a booking as a client one must make a $50 prepayment. This payment will be taken off the cost of any upcoming service, rolled over to a subsequent booking or in the case where less than 24-hours notice is provided for a cancellation or change of appointment, will turn into a cancellation fee.

For some skincare businesses, booking deposits can start from $50 with some asking for anywhere between 50 to 100 percent of treatment payment upfront. Now no one, neither you or a client, wants to part with $50 + due to not being able to attend an appointment, especially in this climate where inability to attend an appointment is often due to an isolating child or a last minute notification that they are themselves COVID positive.

Does it really matter?

There is a constant internal debate that a business owner experiences between standing firm against cancellation fees and the contradictory feelings that often prevail to ‘let this one go’. For those leaning more to the latter, can I remind you of staff wages, basic running costs and missed revenue from a client who would have turned up for said appointment?

To help soften the blow of a cancellation fee for your next cancelled client, I can suggest the following:

1.     Keep a detailed and up-to-date waitlist for any clients who wish to attend an appointment at a specific date and time. For example, at James Vivian you often cannot secure an appointment at your desired time for four weeks +, or even longer if you are after an after-hours appointment. We have a massive waitlist of clients who wish to come earlier than their booked appointment. We notate:

  • Name
  • Preferred time(s)
  • Unavailable time(s)
  • Current appointment (so that we ensure that we delete this appointment if we secure an earlier one).

More often than not, this process allows us to fill an appointment as soon as a cancelled appointment appears.

2.     When a client calls to cancel/reschedule their appointment within the period of when your cancellation applies, you can say for example: ‘I am so sorry you are unable to make your appointment today. As soon as I get off the phone to you I am going to go straight to our waitlist and try to fill your spot today so that you do not lose your $50 booking deposit. If I can fill this spot, I will be in touch to rebook your appointment with no additional fee or if we cannot fill this appointment we will still find you a new time but we will have to take another booking deposit from you.’

What this says to your client is:

  • I am so sorry you cannot make your appointment today
  • I am going to do all that I can to prevent you from losing your $50 deposit (or more as per your policy)
  • Prepares them for the prospect that they will need to pay a fee to make another appointment without having to make it then and there.

Client loyalty matters

What often makes this entire process more difficult for us as business owners is that our clients are often genuinely unable to attend their appointment; you can hear in their voices. But a loyal, devoted client should ideally let you know that they will pay any required cancellation fee without you having to ask for it because you have educated your clients on your cancellation fee in advance and they are aware of how precious your time, just like theirs is.

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