Monday, July 18, 2011

Contract Talk-- Why Deposits Are Non-Refundable

Most bakers I know have a non-refundable deposit in their contracts.

I have a non-refundable retainer fee (not a deposit) written into my contract as well. If a client cancels an event, I can keep the retainer. Depending on the circumstances, I'll usually keep it or return a part of it.

The last time this happened, I told the bride that I would return X amount, and she responded that she wanted more back because I "hadn't done anything" and I shouldn't be able to keep the money.

I understand that train of thought, but the retainer covers a few things. First, if a date is booked, it's made unavailable to other clients. that means that if you book with me then cancel, I've lost other potential business. The retainer covers some of that loss.

I also book most of my business after doing the tasting appointments. Tastings cost time and money to prepare, so the retainer would cover some of that cost.

The retainer also covers the time that I've spent sending emails, answering  phone calls, prepping gumpaste, and doing paperwork related to that cancelled event.

So retainers would cover those costs, probably not even in full, depending on how much is collected.

I always feel bad when someone cancels their wedding, but there's a reason that deposits and retainers aren't refundable.

Do you refund deposits for cancellations? How much of a deposit do you collect in advance? Everyone handles this differently, so it's interesting to see other people's policies.

 Kara Buntin owns A Cake To Remember LLC in Richmond VA, and cake supplies online at www.acaketoremember.com and www.acaketoremember.etsy.com

4 comments:

Canterbury Cakes said...

That's a really helpful explanation as to why you don't return the money. I always think it's got to be one of the most difficult things to justify when the cancellation is early enough that you haven't made the cake yet, but they are all very valid reasons! Thanks for sharing.

Jennifer said...

I have a retainer fee as well, but it is a small amount ($50). I know some do 50%, but often times the brides who book me are booking a year or more in advance and have no idea what they want, so 50% would be hard to calculate.
I have never refunded a retainer fee. Since I only take 3 weddings/weekend, I turn away a LOT of business when someone books my spots. I've only had one MOB ask for it back, and I told her to look at the contract. Never heard from her again.
For the reasons you posted, these are exactly why there are retainers. Doesn't matter if I haven't baked your cake, there is a lot more work that goes into an order than just baking and decorating.

Jamie said...

Mine are non refundable as well, for all the very valid reasons you point out. Except the one who cancelled on me 5 minutes after she paid her deposit. I got rid of that crazy real fast, by mailing her cancelled check to her the next day.

Storybook Bakery said...

Mine's non-refundable as well. And I require 50% down. If it's too far out to get an exact amount, I just go by the base price per person and require half of that.