We’ve all been there: you book out a fair amount of time for a high-ticket service, and you wonder nervously if your client will show up or if their only credit card will go through.
Then there are the clients that don’t show up for their appointments or call/text last minute to cancel. Although emergencies do come up, too many cancellations or no-shows can ruin any business, especially in a service industry like salons.
The High Cost of Cancellations & No-Shows
The reality is that cancellations and no-shows can cost your business dearly. For example, if your salon averages five no-shows a week with a median service ticket of $100, that’s $500 in lost revenue a week (for a 5-day work week), $2167 a month, and $26,000 a year. And that does not include your overhead costs for having those empty chairs and idle staff. Having a solid cancellation policy in place can help you recover some of this lost salon income.
Why Deposits are Important
Requiring a deposit is especially beneficial for high-ticket services like major color corrections and texture or smoothing treatments or ones with upfront costs like hair extensions. If you opt not to take deposits for all clients, at least consider the option for time-consuming services or ones with a higher cost to you and your business.
Whether done for all services or not, deposits can help solidify the value of your team’s time and let your clients know that your salon needs to be compensated for the time booked, whether they show up or not. You’ll find that when there is a financial investment, clients are more likely to respect your time, pricing, and business practices.
Making it Official
Before you start taking deposits, it’s essential to ensure that you have a cancellation policy in place. If you don’t already have a policy for your salon, now is the time to create and implement one.
Whether you are writing a new version or updating an existing one, consider making it a policy to request a deposit from your clients before allowing them to book an appointment. This practice will financially protect your salon and incentivize your clients to show up for their appointments.
To help get you started, here are the steps to create, implement, and enforce a cancellation policy in your salon and start taking deposits for some or all services:
Note: Do your research to confirm what percentage maximum you can charge in your state for a cancellation or no-show. For example, some states do not allow businesses to charge the full price for services not rendered but can charge a percentage of the service or a set fee for cancellations and no-shows.
When you take deposits, clients will be more respectful of your time and less likely to skip out on their appointments. And, as a result, you should see a significant drop in cancellations and no-shows.
So, are you ready to take back control by taking deposits? Set your salon up for success by using Rosy Salon Software’s integrated payment processing. Get started with DEPOSITS, RosyPay‘s new and exclusive feature!
DEPOSITS are only in Rosy for RosyPay customers. Not a Rosy user yet? Begin your free 30-day trial today.