Operations

Cancellation Policies: You Need Flexibility

Lexi Tucker
Posted on July 5, 2019

Terry Murtaugh, co-founder of United Private Car in Boston, Mass. says if you have the right clients, they will understand if you have to issue a cancellation fee.

Terry Murtaugh, co-founder of United Private Car in Boston, Mass. says if you have the right clients, they will understand if you have to issue a cancellation fee.

It’s never easy to tell a client they have to pay for something they didn’t end up needing or using. In some circumstances, it can’t be helped. Your staff relies on you for a paycheck, and you need to make a profit.

However, it doesn’t mean you need to be stiff if someone cancels and your vehicle hasn’t even left the office yet. Here, a few operators give their take on how to keep clients happy while also ensuring you don’t lose money.

Cancellation Rundown

Terry Murtaugh, co-founder of United Private Car in Boston, Mass. has a two-hour cancellation policy on sedans and SUVs, and a six-hour cancellation policy on specialty vehicles like Mercedes-Benz Sprinters and the S Class. If the trip is for an affiliate, they reduce the six hours to two. The company relies on affiliates for large vehicles, so those cancellation policies are at their discretion. Minibuses and motorcoaches tend to range from 24-72 hours.

Nate Pippett, co-owner of B-Line Express in Vail, Colo. keeps his cancellations policy consistent with all vehicle types and accounts: Four hours.

Iliyana Zecheva, account manager for K&G Coach Line Inc. in Park Ridge, Ill., works mainly with buses, although her company provides smaller vehicles as well. In the case of motorcoaches, a 20% non-refundable deposit is required upon booking to secure the vehicle(s) for local trips, and the balance must be paid in full seven days before the date of service. They do not refund for cancellations within seven days of service.

For over the road bus trips, a 30% non-refundable deposit is required upon booking to secure the vehicle/s. The rest of the balance is to be paid in full 14 days before the date of service, and there will not be any refunds due to cancellation within 14 days of service.

The company’s contract clearly states it is not responsible for delays or terminations due to acts of God, public enemies, authority of law, quarantine, perils of navigation, riots, strikes, the hazards or danger incident to state of war, accidents, breakdowns, bad road conditions, snowstorms, and other conditions beyond its control.

Any Blowback?

Using a contract with simple language that’s easy and understandable for anyone is the best way to avoid client disputes, Zecheva says. “Our deposits and time frames aren’t confusing, so we really don’t get any complaints. Everything is clearly stated from the beginning.”

Of course, circumstances can change depending on the account, and she says if the company has an established relationship with the client, they try to be a little more lenient.

Iliyana Zecheva, account manager for K&G Coach Line Inc. in Park Ridge, Ill. deals with large vehicles booked sometimes a year or more in advance, so cancellation policies need to be clear.

Iliyana Zecheva, account manager for K&G Coach Line Inc. in Park Ridge, Ill. deals with large vehicles booked sometimes a year or more in advance, so cancellation policies need to be clear.

“Affiliates need to give at least three days’ notice so we can offer it to someone else. We are all in the business and understand how it goes, and the policies we have in place are applicable to a certain extent.” However, it’s hard for a client to come back with “I didn’t know” when the policy is written in black and white with their signature at the bottom.

It’s important to remember larger capacity vehicles such as the one Zecheva’s company runs are not your regular sedan or SUV. It takes longer to prepare them for trips and they are harder to book on a moment’s notice. “Many of the events we provide transportation to and from are preset months or even years ahead of time. It’s unlikely to receive a cancellation, but when they do and if they are last minute, it can cause a larger loss of revenue.”

In the case of the cancellation of a smaller vehicle, Pippett will almost always side with the customer and refund the money if any blowback from a cancellation charge occurs.

“The only time we are sticklers is on the rare occasion where it seems like someone is doing something almost purposeful,” he says.

Being as flexible as possible will help you in times when a client disputes a cancellation charge. “If someone missed the cut-off by minutes, we usually don’t charge the fee,” Murtaugh says. “If it’s hourly, we bill for the two-hour minimum. If it’s not something that happens frequently, we consider waving it. We’d hate to lose a client over something like that and don’t want to take the risk.” 

Naturally, you want to work with the client and do the best you can to keep them happy. Foremost, you have to consier the cost of doing business. “In many cases, a two-hour policy is often more than enough, especially because a lot of the time, at least for local trips, the chauffeur hasn’t even reported to work yet and hasn’t been dispatched. There’s usually other work we can assign them. However, if there are costs incurred or if the chauffeur will miss out on work they planned, we charge a reduced rate to cover chauffeur pay and the like.”

Changing With The Times

Nate Pippett, co-owner of B-Line Express in Vail, Colo. has evolved with the times and listened to what his clients wanted to find something that worked for both parties.

Nate Pippett, co-owner of B-Line Express in Vail, Colo. has evolved with the times and listened to what his clients wanted to find something that worked for both parties.

Originally, Pippett had a 24-hour cancellation policy in effect. He changed it to four hours about a year and a half ago. “The TNCs and an on-demand world have transformed expectations. We had people that wouldn’t book their departure ride with us because they wanted the flexibility to cancel it,” he explains. “We saw that trend, and evolved to adapt to it. It seemed like any time we tried to enforce it, we ended up being the bad guy. It caused customer dissatisfaction and wasn’t worth the hassle. It just frustrated people.” He does note there are scenarios where you cater to the individual and take things on a case-by-case basis as well.

Not much has changed in regards to bus cancellation policies, Zecheva says. “Unfortunately, many people are trying to switch from livery to coach while keeping the livery mindset. Cars and buses are two completely different animals, so it doesn’t quite work that way.” She feels the standard two-hour cancellation policy on smaller cars is usually enough, but each company has to choose what works best for them, clients, and their bottom line.

Murtaugh notes there are many options out there where people have moments to cancel a vehicle, but it hasn’t changed his company’s policies. Typically, the standard luxury transportation user understands the TNC way is not that of this industry.  “We do everything we can to be competitive, but our clients are quite understanding and we rarely, if ever, get kickback.”

 — [email protected]

Related Topics: client feedback, customer service, difficult clients, motorcoach operators, motorcoaches, sedans, Specialty Vehicles, SUVs

Lexi Tucker Senior Editor
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