When should you keep the deposit?

From time to time as working freelance makeup artists and hairstylists we will have clients need to cancel our services.  Hopefully you are working with a contract, or at least Terms and Conditions that your client agrees to when making their booking (and paying a deposit) that cover what their obligations (and yours) are in the event of a cancellation.

Recently I had a makeup artist call me with a question about a cancellation fee. The artist had been booked by the client for a family photo shoot.  The day before the shoot, the artist had received a message from the client saying she needed to cancel her makeup services because the photographer had cancelled the shoot. The makeup artist was unsure what she should do in that situation. The client had asked her to call and the artist wanted some advice before she called the client.  She was understandably upset because she felt like she would be losing out on a booking (and money).

So I asked the artist about her T&Cs and she said to me that her terms were quite clear; that in the event of a cancellation, the deposit is forfeited if the cancellation is within a certain amount of time – in this case the cancellation was within 24 hours, so the artist was completely within her rights to hold the deposit, according to her T&Cs.

The client had not mentioned a refund in her message.   As the artist had been knocking back last minute bookings for that day all week, she was concerned about being out of pocket because of this cancellation.  She was already going to miss out on the balance of payment,  and now she was worried the client was going to ask for her deposit back too.  So, the artist was really unsure about what she should do.

But here’s the thing; it wasn’t the client’s fault that the shoot was cancelled. As I said to the makeup artist, sometimes we need to be a little bit compassionate towards our clients. It’s not her fault that the shoot was cancelled.

And this is not an isolated case.  I see lots of posts in the Facebook groups from artists who have had jobs cancel and there is often a question about what to do – even when there is a contract in place.  Now, not everyone will agree with me here – I know there are some people who advise sticking to your guns, and enforcing your terms and conditions no matter what:  “You have a contract for a reason – stick to it” – I’ve read this several times.  But I believe that you do need to take each case on its merits, and there are times when a little lenience goes a long way.

While I certainly don’t think that she should give a REFUND of the deposit in this case, what I recommended she consider doing is holding onto the client’s deposit and the client can re-book at a time at is mutually convenient to both the client and the makeup artist (and that the client takes things up with the photographer).

Now, why do I suggest this? Why don’t I suggest just refunding, or, sticking to your guns and saying, “I’m sorry my terms and conditions say that there is no refund. If you want to book again, you’ll have to pay a complete fee (including another deposit) all over again.” Well, the reason I suggest this is because I’m looking at the big picture here.

Let’s look at the VALUE of this booking.  It’s a personal services job that’s going probably going to earn the artist between $100 to $250. So the deposit the client has paid was probably only somewhere between $50 and $100.

This is where I believe you really need to look at the big picture. You can have that kind of small picture view; that scarcity mindset where you are thinking of just looking at this one booking, that one deposit, but is holding onto that $50 really worth it?

So if you refuse to refund the deposit to that client, there’s the possibility that she will get really pissed off and leave you a bad review. Now of course you don’t want to feel that you are being held hostage with the threat of bad reviews. I get that, you know, we don’t want to just be worried about that. We can’t feel that we have to refund everybody just in case they give us a bad review. But sometimes it’s actually worth the cost of not getting a bad review for the sake of $50 or whatever the deposit is. Sometimes it’s worth more to your business to compromise.

So what I suggested to this artist, and what I recommend to you, if you’re in a similar situation, is that she shows compassion and that hopefully the client will remember that and will be really happy with that and that it will actually have a positive on flow to her business.

The aim here is not to leave the client with a negative feeling because it’s cost the client more money for something which is totally out of her control; the photographer was cancelling. She’s already annoyed about the photographer cancelling, and if you go ahead and cancel her booking with you, and not refund her deposit or not hold the deposit for a future date, then the client is also going to have a negative feeling about YOU and your business too.

You want to be careful about not compounding her negative mindset and that overflowing onto you. A bad review could potentially do more damage to your business than the $50 or $100 that you’re saving by not giving the client her deposit back or not holding it over for a future date.

So do you see what I mean?

All too often, we forget to look at the big picture. We forget to look at our business as a whole. We forget to look at how much a good review is worth to our business and how much a bad review can cost us as a business. Now I have had clients who have been unhappy with me in the past and honestly, sometimes it is worth that $50 – $100 just to try and placate that client; to try and make them feel a little bit better.

Obviously in this case this artist has done absolutely nothing wrong, but also the client has done nothing wrong, so really neither party should be punished. What I suggested to the makeup artist and what I coached her was just to make it very clear that the deposit is being held for a date that is mutually convenient, so convenient to the two of them.

Now, depending on their schedules, the rebooking might never happen, but at least she is meeting the client halfway, and the client can see that she is making an effort, that she CARES about her.  Remember, people don’t remember what you say or do, they remember how you made them feel. By compromising, you’re showing her you care, you’re not being hard-assed, you’re not being really rigid in your policies. You’re showing her a little bit of compassion, you’re showing her that you’ve got a heart and you’re helping her in what can be a bad situation. Now, the best case scenario from that is that you will be able to rebook her at a time that is convenient to you, you’ll get the balance of payment, and she is going to leave very happy and that she will remember that you went the extra mile to help her out.

I often talk about how we can add value to our clients and how in doing so, we’re really creating or forging a relationship. We’re building that KLT Factor; that Know, Like and Trust factor; and this is what we want; we want to be creating those raving fans in our business and I think this is an excellent opportunity to do exactly that.

So hopefully that has given you a couple of things to think about when it comes to those awkward cancellations that are not the client’s fault and not your fault and what you might want to consider going ahead. Thinking about your terms and conditions, and of course they’re there for a reason, but how at some times it might be worthwhile to be a little bit lenient, show a little bit of compassion and remember to look at the big picture of your business.

What do you think?  Have you had a similar situation?  How did you deal with it and what was the outcome for you and the client?  Let me know in the comments below, or come join the chat on my Facebook Page


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