As a self-employed electrician, you’re occasionally going to have to deal with the unpleasant side of working directly with customers. One of the unavoidable inconveniences of working directly with people is the fact that you will have customers who need to reschedule, want to cancel, or aren’t home when you arrive to do a job. Even when the customer’s reasons are completely valid (which is not always the case), you’ll take a financial hit if you can’t do the job as scheduled and aren’t given enough notice to fill their time slot with another job.
What’s the best way to deal with these types of situations? The most common ways to handle cancellations and rescheduling are a cancellation fee or a non-refundable deposit. There are pros and cons to each, but it is possible to protect yourself and still keep a good customer relationship throughout the process.
Cancellation Fee
A cancellation fee is a straightforward, simple way to cover yourself if a customer ducks out last minute or isn’t home. Require a credit card number up front in order to schedule an appointment, then charge the fee if they cancel without enough notice (24 hours is fairly standard).
Unfortunately, customers might be upset if you charge them the fee, even if you’re completely within your rights. If it’s a new customer, they may never call you again. If it’s a repeat customer, they might feel offended and wonder if they should find someone new to work with. In either case, you can always waive the fee if the reason for cancellation is reasonable. Nobody will complain about a fee if they don’t have to pay it! Consider waiving the fee for a customer you do want to work with when maintaining a good relationship with them is worth more than the amount of your fee.
Sometimes, new customers might not be comfortable giving you their credit card number before you start any work. However, the plus side is that you’re not asking for any money upfront, which would make many people even more uncomfortable.
A customer who’s unwilling to agree to a reasonable cancellation policy might be the kind of customer who’s going to be difficult to get payment from later, so this can also be a good way to screen who you want to work for if you have that luxury.
Non-refundable Deposit
Like a cancellation fee, you can require a non-refundable deposit before you’ll show up to work. This may be a flat fee to hold their reservation that applies to the final bill. You can also charge a percentage of the project total, but many people consider this to be “shady” business, especially if you’re asking for a lot of money before you’ve done any work. It might be helpful to look around at what other home repair businesses in your area are doing to get an idea for what customers expect.
Unfortunately, a deposit doesn’t help you if the customer wants to reschedule at the last minute and you don’t also have a 24-hour rescheduling fee. It does, however, make it less likely that they’ll cancel and go with someone else. If they’re willing to pay you, they’re invested and won’t want to back out.
Deal with It
You can also just deal with customer cancellations by trying to fit in other jobs if you have a last-minute cancellation. You’re losing time and money, but you won’t have to worry about angering customers or asking for any money upfront.
Whatever your cancellation/no-show/rescheduling policy is, you must make it very transparent. Tell customers as you’re scheduling them, highlight it on the contract they sign, and include it at the end of appointment reminders. Customers should be fully aware of how long they have to notify you of a cancellation and how much they’ll be charged if they don’t. Also do your best to remind customers of their appointment via text or a call, especially if you’ve scheduled them more than a few days out. If you’ve done your best to remind them, you’re much less likely to have to deal with cancellations at all.
We’d love to hear from you! What’s your cancellation policy? Do you enforce it?
What’s the best way to deal with these types of situations? The most common ways to handle cancellations and rescheduling are a cancellation fee or a non-refundable deposit. There are pros and cons to each, but it is possible to protect yourself and still keep a good customer relationship throughout the process.
Cancellation Fee
A cancellation fee is a straightforward, simple way to cover yourself if a customer ducks out last minute or isn’t home. Require a credit card number up front in order to schedule an appointment, then charge the fee if they cancel without enough notice (24 hours is fairly standard).
Unfortunately, customers might be upset if you charge them the fee, even if you’re completely within your rights. If it’s a new customer, they may never call you again. If it’s a repeat customer, they might feel offended and wonder if they should find someone new to work with. In either case, you can always waive the fee if the reason for cancellation is reasonable. Nobody will complain about a fee if they don’t have to pay it! Consider waiving the fee for a customer you do want to work with when maintaining a good relationship with them is worth more than the amount of your fee.
Sometimes, new customers might not be comfortable giving you their credit card number before you start any work. However, the plus side is that you’re not asking for any money upfront, which would make many people even more uncomfortable.
A customer who’s unwilling to agree to a reasonable cancellation policy might be the kind of customer who’s going to be difficult to get payment from later, so this can also be a good way to screen who you want to work for if you have that luxury.
Non-refundable Deposit
Like a cancellation fee, you can require a non-refundable deposit before you’ll show up to work. This may be a flat fee to hold their reservation that applies to the final bill. You can also charge a percentage of the project total, but many people consider this to be “shady” business, especially if you’re asking for a lot of money before you’ve done any work. It might be helpful to look around at what other home repair businesses in your area are doing to get an idea for what customers expect.
Unfortunately, a deposit doesn’t help you if the customer wants to reschedule at the last minute and you don’t also have a 24-hour rescheduling fee. It does, however, make it less likely that they’ll cancel and go with someone else. If they’re willing to pay you, they’re invested and won’t want to back out.
Deal with It
You can also just deal with customer cancellations by trying to fit in other jobs if you have a last-minute cancellation. You’re losing time and money, but you won’t have to worry about angering customers or asking for any money upfront.
Whatever your cancellation/no-show/rescheduling policy is, you must make it very transparent. Tell customers as you’re scheduling them, highlight it on the contract they sign, and include it at the end of appointment reminders. Customers should be fully aware of how long they have to notify you of a cancellation and how much they’ll be charged if they don’t. Also do your best to remind customers of their appointment via text or a call, especially if you’ve scheduled them more than a few days out. If you’ve done your best to remind them, you’re much less likely to have to deal with cancellations at all.
We’d love to hear from you! What’s your cancellation policy? Do you enforce it?