Money Moral Dilemma: Should I refund my friend for the personal training sessions she cancelled?

Tim11111000111

If OP is planning on doing this as a business, then it's pretty basic stuff that they need to have clear terms and conditions that covers things like cancellation.

OP also needs to be aware of the law - particularly the concept of "unfair terms" set out in the Consumer Rights Act 2015. Regardless of what OP's Ts&Cs say, if the terms are "unfair" they are not enforceable. The SMA has published guidance here: https://assets.publishing.service.gov.uk/media/5a7f8b58ed915d74e33f716e/Unfair_Terms_Main_Guidance.pdf

As per the guidance, terms allowing a business to retain full prepayment even when the consumer receives no goods/services are "likely" to be unfair. The caveat is that the business is entitled to retain enough to cover its expected net loss of profit which, for a PT business, might be most of the cost of a session.

In short, regardless of the friendship, if OP didn't make it very clear that the sessions were non-refundable, then OP should probably be giving a refund - and even if it was clear, such a term is on legally shaky ground.

UncleJoes

Any business like yours needs clear terms and conditions that everyone has to be provided with and agree to, even if it's mate's rates. Before taking on clients you need to have thought through your position on cancelling sessions, rearranging sessions and refunds. I appreciate it can be harder with friends, but business is business and your friend needs to understand that, especially as they got mate's rates. If you weren't clear what your position was on cancelling and refunds, then you may not have much of a leg to stand on, mate or not.

As a one-person business you need to keep an eye on cashflow, but you also need to accommodate possible refunds. So avoid putting money from clients you might need to refund into the business in a way you can't get it out.

Ideally you need a slush fund of money. I assume you are putting aside money for tax (corporation and personal if you are a ltd company, personal if you are a sole trader). It can help to put aside a bit more than you need to make sure you can pay your tax bill and to give you some emergency funds.

Somersetshorty

I would stand by your cancellation policy and thay way you are doing everything the right way. Often the simple way is the best way.

primrose_penguin

This really depends on how much you value their friendship. Personally I think she has a cheek, I would not treat a friend like that especially as she asked for a discount for the 8 sessions and you generously gave them to her at half price, she knows you have started a new business and should be supporting you, not asking for refunds especially as you gave her a special deal, I am sure she would not have got any refund or a reduction anywhere else. However to keep the peace I would give her back the money for the 3 half price sessions, as someone else has said she could bad mouth you to other potential customers, but I would also make clear it is a one off, not something you would normally do. Hopefully you can fill her sessions with full paying customers so you are not out of pocket. Good luck in your new business.

Nosyrosiedo

What is your cancellation policy? If it is no refund, then you have to decide if £100 or so is worth ruining a friendship for.

if there isn’t one, then make one and learn from this experience.

as for mates rates - don’t 

natsnara

I have read some of the comments and can appreciate all the perspectives.
Lets be fair, a friend should not have asked for a refund, particularly in light of them understanding that this is a new business and to get established is a task in its own right.
 
I agree with the statements around getting your terms and conditions in order, I think some comments have been harsh, however it would be fair to say that you do need to firm up your business plan, terms and conditions, whether this be for friends or generic customers.  

The likelihood was that you were trying to get your business off the ground, using the experience of training your friend to promote your business with being new, whilst also supporting them with a financial incentive, as well as improved fitness and well-being.  You both won, you got some exposure, she got a reduction in cost (one that I do hope you factored in to being able to afford, that is another consideration you need to make as a business).  

It does sound that your friend has lost interest, lets be fair she managed to attend the previous five sessions but not the last three.  I would try to accommodate some home training sessions where possible or like others have said, extend the life of the offer.

You have to bare in mind that had this been a general customer, they would have not asked for a refund, equally you would not have honoured it as it would form part of the contract you have been them and you from the outset, which should be no different here in legal terms.  However, it becomes a moral compass issue, as what value do you place on your friendship?  Or has your friend has already demonstrated the value by asking you in the first place? 

This is down to you and your values as to how you wish to progress, however it is a lesson learnt and clear expectations and boundaries should always be set from the outset, whether a friend or not.  What would I do?  I would be torn like you, although in fairness, my friends would not be asking.  Based on that, I therefore wouldn't be refunding in all honesty.  Your have a livelihood.  If she was to be slanderous then this goes back to the question above, around how she already clearly undervalues the friendship.   

It is a hard place to be, shouldn't mix business with pleasure / friendships.  You have learnt a hard lesson, I am sure you will do what is right for you, and hopefully come to some common ground.  

Finally, what you do once you have been paid is up to you, if you have reinvested this back into the business then fair play, because to me that clearly demonstrates that once paid, once committed that this is non-refundable.  That to me sums it up.  The only consideration is, what would you do in this scenario if you couldn't facilitate a session?  You need to consider this, and also consider under what circumstance refunds would be considered, if any all.

I wish you every success with your business, personal training is a luxury to most so I do hope you get the footfall and the success you desire to see.   Always remember not to offer anyone a financial incentive that you can not afford, it is a bit like not lending someone money that you cannot afford to get back.  

All the best 

deeveedi

As a retired hairdresser I had many occasions when friends were asking for hair cuts, etc.  I soon discovered that true friends offered to pay the full amount for my work, after previously giving gifts to make up for the amount they would have paid. This didn't make sense as the gifts were often things I didn't want or need, especially when I was just setting up a self employed business. Plus it meant they didn't mind getting booked in at busy periods like Christmas - as they were like any other customer!  I would give the money back in the case above, but in future treat all people the same - friend or not!  Plus don't spend what you haven't earned yet, as someone else pointed out.

mlz1413

Lots of advice already given.
I'd suggest that you take this as a learning curve. A friend wants a refund of prepaid sessions.  So you know customers are going to do the same thing.

I'd ask your friend what you can do to help her take the last 3 sessions. If that doesn't work give her the money back but offer it in installments so you don't suffer cash flow problems.

I'd also write out your T&Cs.  For example prepaid sessions are non refundable and must be taken within 6 months of being booked.

Or that prepaid sessions maybe cancelled with a minimum of 2 weeks notice for a full refund, under 2 weeks is 75% charge.

Also for general bookings put a clause about cancellations, ie less than 24 hours means full payment is due.  48 hours could be a nominal fee to cover booking costs upto 50%.

Mistral001

Give her the money back.  Learn and move on.  When I say learn, I mean learn that you will continually get problems like this if you have friends or family members as clients.  Learn how to politely refuse to take friends and family members on as clients.  It is difficult to do, but it can be done. 

This is a pure service that you are providing, and people will treat you as if you are providing nothing more than your time.  In reality, you have overheads such as insurance, training, electricity etc. to pay, but that is not the way friends and family will think of it.  If you were a plumber, a mechanic or a printer, you would have materials and other obvious costs that clients, including friends and family member clients, would be aware of and thus would treat you differently.

PS. I ran a pure service business for over 25 years, and I learned this lesson in about year ten.  The person I worked for before I went out on my own had a strict policy of not working for friends or family members.  I wish I had implemented that policy in year one of my business.