Should I Require a Deposit?
Over the next few weeks, I want to talk about how to set up your business to attract the kind of clients you look forward to working with. If you've already done the work and hunkered down on who you'd like to attract, there are a few things that are important to have in place to impress those clients and encourage them to book an appointment with you.
In my experience, quality clients want to know that you run a legitimate and serious business. They don't want to feel a lack of professionalism anywhere in your business, even when booking an appointment online. This brings me to the question of if you should require a deposit from every client in order to book an appointment with you.
As usual, I'm not one to give a hard answer. Instead, I'll share pros and cons to empower you to make an informed decision for your business.
PRO'S
REPEL FLAKES
Flakes looooove to schedule appointments and either cancel last minute or forget they even had an appointment. Most flakes aren't going to pay a deposit to book an appointment with you because they know they're flakes. When they book appointments, they aren't absolutely certain they're going to keep it so they don't normally assume the risk of paying a deposit in advance that they may potentially never get back or use. Clients that pay deposits are normally honest people who are serious about their appointment.
WARD OFF CHEAP PEOPLE
There are cheap people everywhere you go and that's ok. People make the world go around.. But you don't want cheap people as clients because as nice as they are sometimes, they can be a major headache when you're providing a luxury service like eyelash extensions. Cheap people usually don't want to pay a deposit for a service they aren't certain is worth it or that they want. If you charge a deposit high enough, its unlikely you'll have many cheap people booking with you.
CASH FLOW
If you're a new business, having money coming in prior to the appointment is a positive. Nothing wrong with getting a little cash flowing in your business. By collecting deposits in advance, you can make a little extra money before working which you may or may not need to keep your business afloat.
CONS
REFUNDS
Even if you have a cancellation policy in place, sometimes people have to cancel and request a refund. If you refuse to refund, it tarnishes your image and now you have someone who is a walking billboard of why other people shouldn't support your business. (and they're usually the loudest). Not to mention, these days credit card companies and banks side in favor with their clients most of the time so if you have a bunch of charge backs, that doesn't look good on you. Or if you do refund, you have to manage that process on the back end. Not a huge pain depending on the service you're using but if you're issuing refunds a lot, your credit card processor will take notice and you may get penalized for it. Not to
REPEL GOOD CLIENTS
On the flip side of repelling flakes, you may also inadvertently repel really good clients. I'll use myself as an example. I'm the kind of client that's very selective on how I spend money. My family calls me frugal but when I make purchases, I usually spend 3-4 times more than your average person. Take my recent gym membership for example. I could easily go somewhere and pay $10 a month. But instead, I pay $250 a month. Why? Because I know I'm paying for higher standards than a $10 a month place which is more comfortable for me. So I pay for a certain level of piece of mind. I would never pay a deposit in advance. But I'm a loyal client that will pay whatever rate you tell me, even if it's above and beyond the market rate. So something to think about. Some people just won't pay a deposit and could be great clients.
Personally, I don't charge a deposit. But I do take a card to place on file and make it clear in my cancellation policy that without proper warning of a reschedule or cancellation that the card will be charged full price. I also require the client to agree to those terms and conditions electronically before they can book so they can't say they didn't see it.
As a result, if I get a cancellation its normally far enough in advance that I usually have plenty of time to fill it. No one wants to pay full price for a service they didn't get.
Having a system in place where clients agree to my terms and conditions, leaving a card on file and having the ability to act on that policy if needed is super easy if you have the right online booking system. I've used Acuity for years for these features and many more. If you're interested in having an online booking system that's easy to use and that your clients will love, check them out. Use this link so they know I referred you.
I'm interested in hearing from you! Do you charge a deposit? Share how it's working out for you in the comments below.