A deposit does two jobs. It turns a maybe into a booking, and it protects you if the customer changes their mind after you have turned other work away. Ask for too much, or make it awkward to pay, and some people drift off to someone who asks for less. Ask for too little, or too late, and you carry all the risk yourself. The aim is a deposit that feels fair and is easy to pay at the moment the customer decides.
How much to ask for
There is no single right figure, but a few things help you choose.
- Your costs before the day. If you buy stock, design artwork or hold equipment for months, the deposit should at least cover what you would lose if they canceled.
- How hard the date is to resell. A Saturday in June booked a year out needs more protection than a Tuesday booked next week.
- The size of the booking. On a small job a deposit can feel fussy, and some businesses simply take full payment when the booking is made.
Some businesses take a fixed sum, others a fraction of the total such as a quarter or a third. A fixed sum is easy to explain. A fraction grows with bigger bookings. Say, as an example, you charge 1,200 for a wedding package. A deposit of 300 is a quarter, small enough to pay on the spot and large enough to cover the work you do before the day.
Take it when they say yes
The moment someone decides to book is the moment they are most willing to pay. Every step between "yes" and the payment is a chance for them to get distracted, compare you with someone else or simply forget. If your process is to send a quote, wait for a reply, send an invoice and then wait for a bank transfer, you will lose bookings that were already won.
Make paying the deposit part of accepting. The customer should be able to read your quote, agree to your terms and pay by card on the same page, from their phone, in a few minutes. Hold the date only once the deposit arrives, and say so clearly, so nobody believes a date is theirs when it is not.
Refundable or non-refundable
Whatever you decide, say it in plain words before they pay. Customers feel cheated when they discover a rule afterwards, and far less so when it was clear from the start.
Many event businesses describe the deposit as a booking fee that secures the date and is not refunded if the customer cancels, because the date was held for them and other inquiries were turned away. Others refund it if the customer cancels well in advance, or let it move to a new date once. A sliding scale is also common: the closer to the event, the less comes back.
The rules on deposits, refunds and cancellation charges differ by country, and sometimes depend on whether your customer is a consumer or a business. In some places what you may keep is tied to what you actually lose. Check the law where you trade, or ask a solicitor, before you settle on wording. Then use the same wording on your website, your quotes and your booking agreement, so there is only ever one version of the rule.
Make it easy to pay
- Accept cards and phone wallets, not only bank transfer.
- Show the deposit, the total and the balance due date together, so nothing comes as a surprise.
- Send a receipt straight away and confirm that the date is now held.
- Keep a way to record cash or bank transfers for customers who prefer them.
Payment plans for the balance
For larger bookings made many months ahead, splitting the balance into instalments makes the total easier to agree to. A couple booking a year out might pay the deposit now, then two or three equal payments, with the last one due a few weeks before the event. Set that final date early enough that you are not chasing money in the week of the event, when you have plenty else to do.
Keep the plan simple. Three equal instalments on the first of the month are easier to remember than five irregular amounts on odd dates.
Reminders that do the chasing
Most late balances are not refusals. People forget. A friendly reminder a few days before each payment is due, with a link to pay, sorts out most of them. A note on the due date and a short, polite one a few days later catch the rest. Writing these by hand gets awkward, especially the third, so set the wording once and let the reminders go out on schedule.
If a balance is still unpaid close to the event, pick up the phone. A conversation solves most problems faster than another email, and your terms should already say what happens when the balance is not paid on time.
For what else belongs in those terms, see what to put in an event booking agreement.
Doing this in Occanovo
In Occanovo the customer accepts your proposal, signs and pays the deposit by card on one page, and the money goes into your own Stripe, Square, PayPal, Mollie or Authorize.Net account. Deposits can be set by product or package, the balance can be split into a payment plan with a reminder before each instalment, and balance reminders are emailed when payment is due. See invoices and payments and proposals and quotes for the detail.