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How to Set the Perfect Deposit Policy for Your Business

A guide to creating deposit and cancellation policies that protect your business while keeping customers happy.

Published on January 10, 2025by Hold My Spot Team3 min read
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Setting the right deposit policy is a balancing act. Too strict, and you might scare away potential customers. Too lenient, and you're back to dealing with no-shows and last-minute cancellations.

Finding the Right Deposit Amount

The "sweet spot" for most service businesses is 25-30% of the full service price. Here's why this works:

  • High enough to create commitment
  • Low enough that it doesn't feel like a barrier
  • Reasonable if the client needs to forfeit it

Examples by Industry

| Service Type | Full Price | Recommended Deposit | |-------------|-----------|-------------------| | Nail Services | $50-100 | $15-30 | | Lash Extensions | $150-200 | $40-50 | | Hair Styling | $80-200 | $25-50 | | Photography Sessions | $200-500 | $50-150 | | Personal Training | $60-100 | $20-30 |

Crafting Your Cancellation Policy

Your cancellation policy should answer these questions:

  1. How much notice is required for a full refund?
  2. What happens with late cancellations?
  3. What's your no-show policy?

The 48-24 Rule

A popular and fair approach:

  • 48+ hours notice: Full refund
  • 24-48 hours notice: 50% refund (or credit)
  • Less than 24 hours / No-show: No refund

Communicating Your Policy

A great policy is useless if clients don't know about it. Make sure your policy is:

  • Displayed on your booking page
  • Included in confirmation emails
  • Mentioned in reminder messages

Example Policy Template

"Your deposit of [amount] secures your appointment time. Full refunds are available if you cancel at least 48 hours in advance. Cancellations with less than 48 hours notice are non-refundable. The deposit will be applied to your service total on the day of your appointment."

Handling Exceptions

Life happens. Sometimes you'll face situations that don't fit neatly into your policy:

  • Medical emergencies - Consider offering a one-time reschedule
  • Repeat clients - Use your judgment with loyal customers
  • First-time clients - A bad experience might lose them forever

The key is to be consistent but compassionate. Document any exceptions so you can refer back to them.

When to Revise Your Policy

Review your policy if you notice:

  • High bounce rate on your booking page (policy might be too strict)
  • Continued no-shows (policy might be too lenient)
  • Customer complaints (policy might be unclear)

Getting Started

The best policy is one that you'll actually enforce. Start simple:

  1. Set a deposit amount (25-30% is safe)
  2. Choose a cancellation window (48 hours is common)
  3. Write it in plain language
  4. Display it clearly

Create your booking link with a built-in policy today.