Almost all limousine services that provide retail charters require a deposit upfront to "guarantee" the service, and almost all require balances to be paid in full before the trip ever starts for weddings, quinceaneras and the like. So, what happens when they call to cancel?
I guess the first thing you should be asking yourself right now is: Did I have the client sign a statement and give them something in writing that says the deposit is non-refundable? If you didn't, you better start writing that check, because you don't have a leg to stand on if they want to haul you into Small Claims Court and ask for their money back.
Now, if you did have them sign such a statement and gave them a copy in writing, the question is, how soft are you? Do you have the face to stand there and tell them that their non-refundable deposit is just that, non-refundable?
It happened to me this morning. A client called and said her husband had fallen down and would not be able to make the wine tour she had booked back in June for her hubby's 30th birthday. While I feel bad that he fell down and broke his leg, my 15-passenger van has been tied up since June and I have an insurance payment and a lease payment. The loss of $865 for this charter is a painful hit. My deposit is only $50 so you're darn-tootin' right I am keeping it and using it towards the overhead of that vehicle. That is the whole purpose of the deposit.
Here is how I take the sting out of it, though. I tell people with similar circumstances that a non-refundable deposit means just that — NON-refundable under any circumstances. However, if they want to postpone their trip, I will leave a credit on the books for the next 12 months waiting for them to rebook. If they do not rebook, they will forfeit the deposit. In looking back at the year of 2013, we collected $1,600 in forfeited deposits.
How do you handle these situations?
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