Customer Cancelled Booking - Pay or Not?

Fen1

If you are having regular cancellations, I would ask why.
Are you having bad feedback on the grapevine? Brits are really reluctant at giving face-to-face negative criticism. It is often because they are worried of the reaction of the other side. The service sector in the UK is notorious for not taking criticism well and not putting the customer first. I am categorically not saying this is you, but unfortunately, so many people are afraid to criticize because of this attitude. It is easier to grapevine or anonymously post than deal with a potentially hostile person. Unfortunately, this means that opportunity is not given to have problems solved.

Are your contracts so flimsy that people feel they can drop you without much penalty? Do you come across as amateurs in some way, so customers don't feel that they are contracted to a professional agreement?

It might be worthwhile talking to a neutral advisor, not a friend, not a family member. If you are e.g a wedding caterer, talk to the venues, florists, entertainment etc and take on board what they are saying. They will know things that you may not.

motorguy

POPPYOSCAR wrote: »

You cannot run your business worrying about people being wary of losing money.


You say that it happens frequently so you have to put up with it or face possible aggravation of protracted legal action.


I think you need to change your business model or be prepared for the above.

+1

I would have thought £100 deposit at the time of booking, 50% 30 days before.

motorguy

assj wrote: »

So would you make them pay or not?


I'd say that we have this once per month, we have around 30 customers per month roughly.

I would think you're fairly stuffed unless you want to go down a protected legal route.

Better to have 50% of the fee, and perhaps face having a customer asking for some or all of that back, than trying to get money after they've cancelled.

Marktheshark

That the issue, you can not charge a penalty for breach of contract.
Only provable losses, be careful with debt collectors as well as if you cause harassment over a non provable debt you are responsible as the debt firm are your agents.

Revise the contract is the best bet.
Items that are not refundable under consumer contract regulations are perishable items or custom made non off the shelf items.
You could revise the deposit to include part payment for perishable goods such as ordered food.

As it stands the deposit is seen as a recoverable estimate of loss due to non performance as an expressed term and the judge is likely to award you the right to keep the £10.
Get it wrong with these debt collectors and a harassment claim could shut you down.
You have a poor business plan that allows customers to cancel and lose £10.

[Deleted User]

Thanks for the feedback. We don't have any problem with the business service, the issue is we have marketed to some budget clients via Facebook recently - well as you know what's booked via Facebook is normally amateur. We also offer payment plans, upgrade options etc - increases our sales so we do it where possible.


However we have 1 or 2 customers per month that do this, it's low compared to the customers we have. I still don't feel happy about the situation, maybe I'm greedy and it isn't a lot of money.


In the past our clients have paid with collections and solicitors, because in reality they cannot afford to seek advice or to use sites. Now that sounds bad, but I want to stress that we are not trying to be unfair, we have lost business and I now understand the rules regarding claims of this nature.


Bottom line for us is simply that we don't have as much money in the bank as we expected, and that's a problem for our business.


If I change the deposit structure, then I'll probably loose 50% of the customers we get. Equally I don't want to do that and in reality it would be best to loose the ones that just don't pay.


Trying to explain my point, maybe I'm still wrong, I have added some new info to the mix now so maybe that changes things I don't know.

custardy

assj wrote: »

Thanks for your feedback, we always ask for £10 because so many people have lost money because of thieving companies so to speak and so people are vary wary of making payments, especially for weddings.


We don't want bad publicity, but equally we have been left out of pocket, our staff are paid for the work they do, and they also now have no work.


I suppose I was hoping everyone would say charge them and make them pay, but of course that's what I want to hear.

In which case (IMO) you need to pursue your terms.

[Deleted User]

Thanks I'm considering asking for payment (well I have already) and then reminding, sending to collections and stopping at letter before claim. The debt collectors are quite reasonable really - which I know some people don't agree with, but we can access the calls etc and they don't call more than a couple of times per week.

paddyrg

If you have a lot of customers, then testimonials that people can follow up on Facebook will be more reassuring than a £10 deposit. Offering a £10 deposit is rather asking for clients who can't/won't pay.

How about rejigging things a little - set the terms that 50% by 30 days before, but offer a savings scheme for a tenner a week/whatever to help them get there. And offer a discount if 100% is paid 30 days before.

Then, if they do cancel, you can deduct provable losses (wages paid, raw ingredients, direct costs) before returning the balance. If they don't reach 50% in time, they are more likely to be problem clients anyway, so you can cancel their order with refund if they can't meet the payment schedule long before you commit large direct costs.

antrobus

Marktheshark wrote: »

That the issue, you can not charge a penalty for breach of contract.....

Yes, but you can include a liquidated damages clause. It has to be a genuine pre-estimate of loss, otherwise it will be regarded as a penalty clause, and invalid. Ultimately, it would be down to a court to decide which was which.

Marktheshark wrote: »

...You have a poor business plan that allows customers to cancel and lose £10.

That, I believe, is the source of the OP's problem. £10 is not enough.

skintpaul

For a large event, I would have expected a bigger deposit (£? per person?), if only to cover any food that might have been wasted..

Positive- staff now free, for other bookings!