EP 3.26: How to Create and Enforce a Cancellation Policy That Works

Speaker A: What's up, you guys? I'm, um, your host, Michelle Sonor, and welcome to the Limitless podcast. Today we have another quick hitter episode to talk about, something we all deal with but don't always want to talk about. Cancellation policies and no shows. Whether you've been ghosted last minute or constantly reshuffling your schedule, you know how frustrating and costly it can be. That's why we're diving deep into creating a rock solid cancellation policy that protects your time, sets clear expectations with clients, and keeps your business running smoothly. Let's talk about professionalism and how to enforce policies without losing that personal touch. So grab your notebook and let's get Limitless. Okay, well, first of all, hi, everyone. This is actually the first podcast that I'm recording since having a baby. I'm actually wearing him in a Sally wrap right now. Do you guys just hear that? You hear that cute little squeak? So if you guys hear any squeaking, breathing, crying, anything like that, we're just making it happen for you guys. But I really didn't want to delay this episode any longer because this episode was actually, um, given to me by a listener. They said, hi, I was wondering if you could do a podcast episode on handling no shows, Last minute cancellations, 24 hours/theme day, specifically on how to handle charging the card on file for first time clients. And this is a really important topic because it can be really hard to have these conversations and sometimes uncomfortable. But if we have our systems in place, just like anything else, we're going to be good to go. So let's just dive right into cancellation, um, policies. So why does this matter? Obviously, um, having no shows and last minute cancellations can absolutely hurt your income. Most of the time we are commission based or hourly based. Um, so if we don't have a client, we're not getting paid. So, so it's important that we have these policies in place, um, not only for us, but also too, out of respect for the other clients. Right. If you have a really heavy wait list of clients, we want to make sure that we can be courteous to them as well. So we just want to make sure we have everything outlined, um, and structured within our business so that we can thrive and be successful. And this doesn't have to be an uncomfortable thing. Uh, the biggest piece of this is going to come down to the communication on our cancellation policy. So the first thing I want to start with though is that I am going to walk you through what works for me and what works for my business. Right. But you should make your policy whatever feels right for you and for your business. So if this feels right for you, great copy paste, go ahead and use it. But you have the freedom and the flexibility to make those adjustments. Um, we've been doing this for a few years and it's been working really well and we've seen um, just a greater understanding amongst all of our clients. But there were times when I had made mistakes and so I had to refine that process. And so a cancellation policy, um, there's a few key components, um, to the cancellation policies. So we have the notice period. So the first thing, before you even have a cancellation policy, you must create one, right? So uh, we have uh, 24, a 48 and kind of a 72 hour period period. So you have to determine what the notice period is that feels right for your business. Um, then within those periods we have the structured fee. So maybe there's a flat fee, maybe there's a percentage, um, maybe there's a full charge to it. Maybe you have people pay deposits as well, right? So there's going to be a fee, um, if they're not within that cancellation policy. And then we have the communication on how clients are to notify you, right? Are they supposed to text you? Is there an app that they can go from an email, phone number, etc. Um, maybe you have a one time free pass in your, um, or emergencies or like certain things that you know, the fee doesn't abide by. Some people feel, you know, if the client's sick. Right, like that the cancellation policy doesn't, um, doesn't, what's the right word? Um, mom brain here. Um, the cancellation fee, um, is null and void. There we go. Um, and maybe like I said, there's deposits, um, maybe they prepay, um, things like that, right? So first you have to decide what your cancellation policy is. So I'm going to talk to you guys a little bit about what mine is. And if you want to view this, I will put this in the show notes below. Um, and you can view it on our website. So every single person at my salon, so we have a salon policy that is for myself, all of the commission girls and then the renters have their own policy. Now a lot of them are very universal. Most of us have, have a really similar policy. But sometimes people have some little, you know, little quirks that they decide they want to have in there. And again, if you're a renter, you can do whatever you want to do. So on our website it literally says click here to view the policies and our cancellation policy is that we do require a credit card on file to book your service. So that's first and foremost. Um, if you don't have a card on file, it's very hard to charge that fee. And we require a 48 hour notice in order to cancel or reschedule and then you avoid all fees altogether. Um, so that's really important. Now if your appointment is not canceled or rescheduled prior to 48 hours, then you will be charged 50% of the cost of your scheduled service. If you cancel within 24 hours, you will be charged 75% of your scheduled service. So we kind of have like a tiered system where 50%, if it's from 48 to 24, within 24 hours, it's 75%. And then if it's that day of and or a no show, it's 100% of your service. It also says that your card will not be charged unless you fail to comply with the cancellation policy. So we have a cancellation policy, right. Then we also have a late policy. We know that we operate on a time schedule and of course we are going to do everything in our power to get that client in everything we can. But there are instances in which you can't. Right? And then it's basically the same thing as not having a service. So we have in our policy that in the case of the client being 15 minutes late or more, that they will be considered a no show and will be charged accordingly to the no show policy. Again, if we're able to still do some of the service, we're going to do that. But in some cases, or repeat offenders, things like that, there are times in which we, we cannot do that because it is not fair to be late for our next client. Um, and in that instance, we also do ask clients to call us. So if a client is running a little bit late, we always give them a call like 10 minutes after and just say, hey, are you on your way? How are you? Is everything okay? Um, and we also little sniffle from the baby. And we also ask clients to notify us if they're running late. Then that way we can prep when they call us. I'm like, great. Like there's little things like I can make them a beverage maybe. Um, they're wanting a similar color to what we did last time. We can kind of prep and make sure that they can get everything they're hoping for. So we have a late policy. Of course we have a no show policy. So if you no call no show you'll be charged in full for your service. So whatever they are scheduled for, that is what they are charged for. Um, we have a change of service policy as well. And so a change of service would be like, let's say someone is booked for a four hour color and they come in and they're like, hey, I just want to do a haircut. And obviously that is a large loss of income. It's also a large loss of time. So a haircut might be 45 minutes where they're booked for four hours. So we do ask that they, um, change their service 48 hours in advance or again, there is charges with that. Um, we also have listed on there a children's policy. So this one, this one is tough because of course, like, we love your children, all of those things, but we do have to have guidelines around it for the safety and the relaxation of other clients. So we say, I loved, I love to see you and serve your little ones. Children 10 years and under are welcome to join you at your appointments as long as they are accompanied by an additional adult to provide childcare while you receive your service. This is respect other guests and stylists. So again, if we're servicing that child, obviously, great. But otherwise, if other kids are there, we just need somebody watching them. We have lots of concrete floors, glass, chemicals, all the things like that. So we want to make sure that they're safe. And we also don't want kids screaming because a lot of people come to their services because they're trying to get away from kids. Right. They're trying to have a little bit of relaxation. Okay. So that's really important that you first have everything outlined and legible so that your clients understand what the policy is. But you can't just post that on your website and just hope that they see it. Okay. That's not clear communication. I don't feel that it's fair to charge someone for something that they are not notified of. So you can't just be like, you can't just be that way. Okay. So the important thing, more so maybe even than having the policy, is communicating your policy. Okay. Um, so there's a lot of places that you could display this. Yes, this is available on our website. So if someone were to go to our website and they click my name, they are going to see this, but that's not guaranteed. And it's not guaranteed that they're also going to read it. So we also have it on our booking app. You literally have to swipe a button saying you uh, agree to the policy. Ok. Because you need consent that their card is on file and that you're able to charge it if they do not follow the guidelines of your policy. So we have all new clients book through this, our online booking app, which is very, very easy, so that they're able to view the policy and agree to it. Now, there are a few instances where we'll do it over the phone, but if I do it over the phone, I'm reading to them the policy, making sure they understand it. I'm gathering a card on file and every single client. Okay. You could also have this available on social media. I do not necessarily agree with, like, bashing clients and being like, this is my policy and you're not abiding by it, but to simply have it view, you know, able to be viewed on social media, a place where they could book. I think that that is fair, and I think that that is, is a great way. Um, um, you could send out text reminders with your appointment reminders reminding them that there is a fee if they cancel last minute. So how our system works is it sends out an email and a text notification 72 hours in advance. So because our policy is 48 hours, that's 24 hours prior to when they need to notify us. So it's giving them that reminder. Hey. Hey. I just wanted to remind you, you have this appointment. Make sure you cancel it. And, uh, our system will not allow them to cancel themselves. And if it's 48 hours or under. Why? Because we need to charge for that. So if clients want to cancel their appointment or reschedule, they can do it through the link that's sent to them 72 hours prior, but it will not allow them to adjust their appointment, meaning they'll have to reach out to us and reschedule that appointment if it's within 48 hours or less. And then the hardest part, you guys, is enforcing the policy. Okay? Trust me, if you're a client listening to this, the last thing I want to do is charge you for something that you're not fully receiving. I'm agreeing to be there. You're agreeing to be there. I want to do your hair. That is best case scenario. So we don't want to do this. It sucks. However, you do need to stay consistent with enforcing your policy. Otherwise, why do you even have a policy? Right? It's like you waive it for 10 people, they're going to expect for you to waive it again. Now, I'm not saying that there aren't Situations in when you might feel it's appropriate to make an exception. Right. Um, clients that have maybe never done it before and they have a death had that happens. I mean, my God, all these things are crazy. They're going into labor. Right? Um, so I'm not saying that there can't be ways to waiver, but you need to have those ways to waiver also be consistent for you and for your business. Um, and again, like, having an automated system really helps us to be able to reiterate these things and make sure that they're in communication so that when we have to then have that conversation with them, a lot of our clients are already like, hey, I understand you're going to have to charge me. No big deal. Right? And those are the clients. We're like, whew, thank God I didn't even have to have that conversation. But I don't want to breeze over that because you are going to have to have these conversations. So going back to the question that, um, our listener asked us was, so how do you handle these situations? Okay, so someone is scheduled for an appointment at 3 o' clock with me and they, it's 10 minutes past, so the first thing I'm going to do is I'm going to give them a phone call and I'm going to see if they answer because the first thing I want to know is like, hey, are you on your way? Is everything okay? Like, I don't think that you have ill intent to not show up to your appointment. I think you want to be there. Most people want to get their hair done. So I'm first going to call and check in with you. Obviously, if you are just running late, we're going to discuss what we're able to do that day and Cool, no big deal. Um, however, if you don't answer, I usually wait that 15 minutes. Um, and then at that point I'm determining it a no show. Again, this is all things written out in my policy. And then from there I'm going to send them a 4 follow up text message and say, hey, Sarah, I had you booked for a 3 o' clock appointment with me today. Um, I'm so sorry to see that you didn't make it in. I would love to get you rescheduled. Prior to getting you rescheduled, I do need to take care of the cancellation fee which is going to be XYZ per our policy and I will go ahead and use the card that's on file to go ahead and charge us. Please get back to me and let me know when you'd like to reschedule. Um, I'd be able to get you in on this day, this day and that day. Okay. So I'm going to vocalize exactly what they're getting charged because I don't think that that's fair just to charge a card without saying anything. And I'm also going to explain to them the policy. Now, if they're like, wait, I didn't know about the policy. That's not going to be the case at my salon because they've agreed to it. They literally physically had to agree to it with booking online. Now, sometimes there might need to be clarification behind that policy. So I'm always happy to have a conversation with them and say, absolutely, let me clarify this policy for you. Um, and again, sending them what they agreed to. So I have it screenshotted on my phone. I can send them the online booking, show them the policy or from our website. Um, and specifically for first time clients, you know, they, again, if I've done the communication, they're going to know about it. Not everybody is going to be happy with this. Some people will try to fight it. Um, and you know, you just have to be firm in, you know, you agreed to this, I agreed to this. And this is, this is the policy that we have in place. I don't think you should be. So, like, sometimes people, when people send text messages about things, they're like, well, per my policy, like, they're so like, stuffy about it. Like, just be a normal person when you're communicating, have a conversation with them, um, and just notifying them that that's going to be charged now. Then you charge the card, um, on file. Great. Send them a receipt, everything's good, they get back to you. Hey. Yes. Oh, my God, I'm so sorry, I forgot. I want to reschedule for this date. Cool. That's best case scenario. Um, obviously that's not always the case as well. Um, so sometimes their card declines. So in that instance, what I do at my salon is I notify them, hey, your card declined. Um, for whatever reason. It can be a lot of different reasons. It's expired, they canceled the card. All the things. Um, so I just say, in order to get you rescheduled, I will need to take care of that payment. Now your good clients are going to say, oh, my God, my card expired. Here you go. I'll venmo you whatever the case may be. But there are going to be some people out there that don't message you back. Okay. And you, in my situation, I take it as a loss. You could absolutely file a claim, all sorts of different things. Um, but then from there they are blocked from booking in our system until those fees are paid. So I'm making a note on their file saying, hey, you know, they, they are owed this fee. They're blocked from online booking until that is rectified. Um, and for me, as a slot owner, it's really important because my staff doesn't get paid, you know, and that means a lot more to me. Like, I want them to have thriving, um, successful businesses. But again, it all comes down to if you guys have mutual communication, so you cannot over communicate with that client, and I would say have this conversation directly. Okay. Don't just be like, oh, I'm going to like, slyly, like put this, like, you know, on my website somewhere. No, you have to be direct and you have to have these conversations. Um, another suggestion is, let's say you don't have a policy in place. One thing that you could do is as all of your clients come in, you, you could have this be a form that's in your salon as well. Or you could have it be a digital form that's sent out. Like my booking system allows me to send out forms. Um, and you could send out a mass thing where people have to, again, read your policy, agree to it. But if you're feeling a little bit nervous about it, I think having a face to face conversation is never bad. It just explains the client and makes it seem more transparent, um, than being just like, like hiding behind a screen. So there's lots of different ways that you can go about this. And as always, I always say this, please reach out to me and ask me if you do have specific questions about specific scenarios, because I know the verbiage can be hard. Um, and again, it's not something that's like so easy to do. It really isn't. But at this point, once my business has had this going for a long time, it's actually been really easy. Um, so again, I'm gonna link our policy in the show notes so you guys can view it. Um, and also our booking website that we use, so you can also view that. Because I just think it's so important to make sure that this, um, is done for your business, whatever, again, whatever feels right for you and your business, that's what you're gonna do. Okay? So don't feel like you need to copy and paste mine. This is just what works for us. Um, and just if you feel authentic about it. It's gonna be good to go. Okay. Wow. Okay, guys. Oh, the baby. He stayed asleep for the entire episode. Killing it. Okay, well, we are gonna have an episode about my whole birthing situation, postpartum, um, becoming a mom, all of that. So you guys, don't worry. That episode is coming next. Um, but for today, that is gonna wrap up just our, um, our episode for today. I hope that this helped you guys, and I hope that it helps you create policies that feel good in your business. And so we're gonna end this episode with, you know, like we always do. At the end of every episode, we do Ask me anything. Where I let my M listeners literally ask me anything, and nothing is off limits. And today's question is, if you could live in any decade, based on the hairstyles alone, which would it be? I would say the seventies. I think of, like, Farrah Faucet. I love that. Like, I mean, it's kind of like what people are loving today, too, but I just love that, like, blowout Plus, I think it would look good on me and my face shape, too. So selfishly, like, I want that hair trend, um, for me, selfishly. So. Thank you guys so much for your questions. If you want to submit a question of your own, just click the Ask me anything link in the description of this podcast. And as always, if this podcast helped or inspired you, I'd be so grateful if you would rate review this episode, send it to a friend, share to your social media, do all the things. Okay, I appreciate that so much. And we'll check you guys on the next one. Xoxo MHM. Tonight,