The Cost Of Cancellations On Small Businesses

Last minute cancellations are costing small business owners thousands of dollars as no-show clients ignore cancellation policies.

When you’re running a small spa or clinic, every dollar counts. Of course, you expect the usual ebb and flow of income. But nothing stings quite as much as the dollars lost to last minute appointment cancellations.

Tegan Rowe, owner of Bare Beauty Co (and pictured above), recently shared a call out on her Instagram stories asking clients to consider the cost cancellations are having on her small business. Though she remains understanding, she tells us it’s hard to swallow the loss of income.

Cost of Cancellations
A call out on Bare Beauty Co’s Instagram

“Cancellations have had a huge effect on my small business. We understand completely that last minute things come up that are out of clients’ control. But those last-minute cancellations then cause my business a loss of income, having to pay a staff member and also a loss of appointment for a client that was wanting one,” says Tegan.

Tegan and her team at Bare Beauty Co are doing everything right when it comes to preventing last-minute cancellations and client no-shows.

“We have a cancellation policy in place which I personally think is very considerate.

“We send an automatic reminder text 48 hours prior to appointments. It states that we require 12 hours’ notice for any changes or cancellations to appointments.

“It also says failing to do so will result in a $35 fee and until the amount has been paid, clients are unable to make any future appointments.”

Despite her best efforts, Tegan’s unsure how to get the message to really sink in.

“To be honest I feel like I have done all that I can to make clients aware of our policy as it’s sent in a reminder. And, they have to click they have read it before makings appointments online,” shares Tegan.

“We do take a deposit for treatments when booking online and I am considering taking a deposit with all bookings for this reason.

“It’s not something I personally enjoy enforcing. I actually find it hard as clients sometimes feel it’s unfair. But I also don’t think they understand the true effect it has on our business.”

Another affected business owner is Jemma Balczun, owner of home-based clinic Soulflower Studio.

“Some weeks the effects [of cancellations] have been huge. I had a week recently where I lost over $600 due to last minute cancellations,” shares Jemma.

The effects of cancellations led Jemma to introducing a non-refundable $50 deposit on all bookings that she shared with her clients on Instagram. And it seems to be working.

An Instagram post from Soulflower Studio

“Client’s have responded really well so far. It was only introduced a couple of weeks ago and the support I’ve received so far has been very encouraging. And yes it does seem to be reducing the amount of cancellations!”

“I think the post I did on instagram helped people to realise what it’s like on my end when they cancel with very little notice. I contemplated just introducing it without announcing it but I really wanted my followers to understand the impact on small businesses when they cancel. I’d been getting some clients who were booking my time and treating it like an option and then cancelling if something better came up for their day. It was really frustrating.”

As for her advice for other small businesses struggling with the cost of cancellations and considering introducing a deposit system, “Go ahead and do it!” says Jemma.

“I was too nice for too long. This industry is notorious for cancellations and no shows. How can you run a business like that? Some people weren’t respecting my time and business and if I didn’t put it in place I potentially wouldn’t be able to keep offering services.

“I think cancellation policies should be viewed the same way as when you book a workshop or music gig: you pay in advance and if you can’t go then you don’t get a refund.”

What is your cancellation policy and do you feel it’s working? Let us know in the comments.

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