Secure the sale with proper deposits and contract language

secure the saleYesterday, I was doing some research on a new website, Bridal Brokerage. It is designed to help couples that cancelled their weddings, sell some or all of their contracted services to another couple. In turn, this helps keep the contracted wedding professionals working and getting paid.

Another part of their services  is listing cancellation openings for individual vendors and/or list open dates for venues or vendors… all at a discount from ‘regular price.’

Size of Deposit

In the case of individual cancellations, it was not possible to tell whether couples cancelled ‘for cause’: Fell out of love, family tragedy, military deployment, necessary postponement OR… whether they just walked away from a vendor because they changed their mind, thereby choosing to forfeit the deposit.

It struck me that many of these transactions had insufficiently small deposits. 10-20%. $150, $200, $300… that sort of thing. People do change their minds, but they are less likely to forfeit a 50% deposit on a $2000 purchase, than a 10% deposit on a $2000 purchase.

Lead Time for Cancellations Matters

Setting aside exceptions for “riots, strikes, and acts of god” (which is common contract language), when is your cutoff point? – Defined as the date marking the moment when a customer is obligated for the balance of your agreement, even if they ‘fall out of love’ five days before the wedding or cancel for another reason.

In this scenario, I am talking about protecting YOUR business and its financial well-being. In the wedding industry, it is common to define fees for service (in agreements) based on hours of entertainment performed, number and type of specific flowers or decor delivered, hours of photography or videography, description of the cake, etc.,.

What is not articulated in most agreements is the time you devote during the pre-wedding process, prior to, or after the wedding. So, a last-moment cancellation doesn’t allow you to recapture hours your company has invested, leading up to the wedding. A void that a customer may or may not appreciate or understand.

The Magic Question

You can set the cutoff date at any point you want, but what is reasonable? In my experience, I used Goldilocks and the Three Bears logic. 30 days before the wedding was too short. 90 days before the wedding met too much resistance. 60 days seemed about right.

I explained the clause this way: “When we finalize this agreement and accept your deposit, the initial money is non-refundable for any reason. With the exception of ‘riots, strikes, acts of God’, you are obligated for the balance, and we are obligated to provide our agreed service…. dramatic pause… “So if you are going to fall out of love, please do it at least 61 days before the wedding, so that the balance is no longer due.” – short pause, and then laughter from everyone.

The Real Issue: For you

How late in the game are you able to replace a booking?  There is no absolutely predictable answer. The only fact you can be sure of, is, the longer lead time you have, the better chance of filling an opening. Doing the math on lead times, cancellations, and replacing bookings is nice…. but the sample size is probably not meaningful, enough.

What you should consider is:

Expanding the cutoff-date lead time, as much as is reasonably possible, short of being so aggressive that it causes people to be fearful of your agreement and turn to another vendor… not for expertise, but terms.

And, decide what level of deposit (25%, 33%, 50%) is sufficient to minimize the likelihood a contracted customer might elect to forfeit their deposit and choose another wedding professional for ANY reason.

“It’s not a problem until it’s a problem.” – Andy Ebon

One of my favorite sayings. The best time to revisit your policies is NOW. If a change makes sense, implement it, rather than after the next cancellation or walk-away.

FYI: There is no single right answer. It will vary for different types of businesses and price points. It is simply important to analyze your circumstances and adjust the policies, if necessary, or reaffirm them, if no change is warranted.

Andy Ebon

Andy Ebon
Wedding Marketing Expert
The Wedding Marketing Blog

2 responses to “Secure the sale with proper deposits and contract language

  1. Found out going to arbitration years ago that deposits are legally refundable…retainer fees are not. Terminology is a wonderful thing. Brides today are trying every way they can to beat the system, with finding fault in discounts coupons etc.

  2. Agree with you both, and just revised my policies slightly by increasing my booking fee that is actually no refundable if they change there minds for what ever reason.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s