By Ashley Smith and Sarah Fasolo (SALT's Salon Business Consultants)
Having a firm, clear cancellation policy is important for anyone who works in a service-based industry—and that goes for hairstylists and salon owners as much as it goes for plumbers and electricians. These policies act as an insurance policy for your business and your staff, helping to safeguard your time and scare off bad clients. (Who needs them, anyway?)
Don’t have a cancellation policy yet? Creating and implementing one should be a top priority! Below, we talk about the importance of cancellation policies, walk you through the process of creating one, and talk about the few times it might make sense to break your own rules.
Do you really need a cancellation policy?
The short answer is: YES! Whether you’re an independent stylist who manages your own book, or you’re a salon owner who manages appointments for your employees, you need a cancellation policy. It’s the only way that you can make sure that you’re not wasting your time and energy.
A commission-based stylist is typically only paid for the services that they provide to clients. Without a cancellation policy, there is no way to protect you or your staff from last minute cancellations. And those last-minute cancellations really do affect a stylist’s income. Because of their very nature—they’re last minute—you typically won’t have enough time left to fill the slot. That leaves your girls out of their commission for that time slot, which can be a substantial ding to their paycheck.
Now just imagine: What would happen if every single appointment you had scheduled one day cancelled? It’d be a catastrophe. And yeah, sure, that’s not exactly very likely to happen. But as a worst-case scenario, doesn’t it feel good to know that you’re protected?
Think of it this way: You as stylists are service providers, providing services to the general public. Your paycheck is determined by the amount of services that you perform in a given period of time. If you don’t perform a service, then you don’t get a paycheck. This is why we refer to a cancellation policy as an insurance policy: You’re protecting your time and your money.
If you’re still not sure that you need a cancellation policy, ask yourself: How important is your time to you? How much is an hour of your time worth? And how much of that time are you willing to waste or throw away because of others who don’t value your time as much as you do?
How to Create a Cancellation Policy for Your Salon
Ultimately, your cancellation policy can (and should) be tailored to fit the needs of your unique business and clientele.
That being said, your policy should communicate a few main pieces of information to your clients:
- How long before an appointment can an appointment be cancelled? How long does it typically take you to fill an open slot in your book? A day? Two days? A week? A month? Are you in a location that receives enough foot traffic that you know you can get a replacement appointment so long as you have an hour’s notice? You want to give your clients the opportunity to cancel or reschedule if they absolutely have to, but you also need to protect your business. In determining how long before an appointment you’ll allow a client to cancel worry free, be sure you understand how much time you will need to find a replacement.
- How much is the cancellation fee? Cancellation fees often fall in one of two formats. Either it is a flat fee that is designed to recoup at least a portion of what the stylist is forgoing due to the cancellation, or it might be a percentage of the amount you charge for the service. The number/percentage should be something that you’re comfortable with. Ideally, it should be high enough that only serious clients are going to make a reservation, while also being high enough to protect your stylists.
- How many chances does a client get? If a client or guest keeps canceling their appointments, you might want to rethink whether or not you should accept their next booking request. Come up with a threshold (Three cancellations? Five cancellations?) and after a particular client crosses it, it might be time to turn them away.
At SALT, our cancellation policy requires that all clients have a credit card held on file before any appointment is actually reserved. This way, if a client doesn’t show up for their appointment but also doesn’t cancel in a reasonable amount of time, we can simply charge the cancellation fee to the card, no questions asked. An alternative way of thinking about it might be to take a deposit prior to the booking, which would be applied to the service (so long as the client shows up) or otherwise be forfeited in the event of a cancellation.
Another way of thinking about this might be to only hold a credit card or take a deposit for specific services that your salon offers. For example, if you run a full-service salon but are looking to streamline your services or want to become more of a specialty salon, taking deposits can be a great way of making sure that you are only attracting serious inquiries for those services.
Again, at SALT we are a creative color focused salon. Because of this, we don’t need to streamline our services, and a credit card must be saved on file for each and every appointment that is reserved.
Exceptions to the Rule
We take all of our policies very seriously. After all, they are policies for a reason. That being said, there are certain situations where we make exceptions.
One common exception is when there is inclement or serious weather which might pose a danger or threat to ourselves or our clients. We of course never want our guests to put themselves in danger over something like a hair appointment. In these cases, we will often work proactively to reschedule appointments on our own end to ensure the safety of both our guests and our stylists.
Other scenarios might need to be evaluated on a case-by-case basis. For example, if you have a regular client call and tell you that she is having car troubles or a family emergency or is simply incredibly sick and can’t make her appointment, then you might want to consider going against your cancellation policy and making an exception.
The reason is that this is someone who is extremely loyal, and who never cancels, and who you want to retain as a client. Helping them now in their time of need might cost you a bit in lost revenue, but will be more than made up for over the lifetime of the relationship.
One thing to keep in mind is that we are in an industry where customer service is everything. Making that little exception for this regular client may financially hurt that stylist in the short term but help in the long term because this regular client will refer all of her friends to you because you went that extra mile for her.
Want to learn more about how you create policies that protect your time and profits? Sign up for our Salon Consulting Program, with Society Manager Ashley and SALT's Marketing Manager Sarah. These calls are customized specifically to your business situation! Learn all about creating a healthy and vibrant salon culture, performing a pre-screening consultation video, cancellation policies, and more!