Last-minute cancellations throw a wrench in your day as a service business owner. Not only are you left scrambling to fill the empty spot in your schedule, but you lose income if you can’t fill it.
And that’s where company cancellation policies come in.
Even if you aren’t hit with cancellations regularly, having a formal company cancellation policy in place sets clear expectations with your customers. Plus, it’s the difference between making some profit and none.
But how do you make a company cancellation policy and share it with your clients? Find the answers to those questions and more in this comprehensive guide, including ready-to-use templates and examples.
Why do you need company cancellation policies?
Even though it may not seem important at first, company cancellation policies can actually save you a lot of money in the long run. By creating and implementing one for your business, you have an opportunity to:
1. Hold customers accountable for reserving your time
Your time is valuable. And you need to make money to keep your business afloat. When you have a company cancellation policy in place that includes a penalty for last-minute cancellations, it ensures the customer at least partially compensates you for reserving your time.
2. Discourage customers from cancellations and no shows
Customers who face late cancellation fees for canceling appointments are less likely to cancel. After all, they’d rather get something for their money than nothing.
3. Make more money
Fewer cancellations means a fuller schedule, and a fuller schedule means more profit. And, even if a customer does decide to cancel an appointment, having a cancellation policy in place that includes a cancellation fee guarantees you at least make something, if not the full amount you would have made from the job.
4. Have a more reliable schedule
A full schedule is one of the best things you can have as a service business owner. After all, it means you’ve succeeded in building up a customer base. But cancellations leave you with gaps that are hard to fill, especially when they happen with little notice.
A company cancellation policy often results in a more reliable schedule because it deters customers from changing their minds right before an appointment. And that saves you from wasting time looking for a way to fill their spot in a productive way.
5. Boost your professionalism
Having an effective company cancellation policy in place isn’t just a way to protect your revenue and prevent schedule gaps; it also adds to your reputation as a professional business. Having clear policies in place shows customers that your business is organized and legitimate.
4 company cancellation policy must-haves
The purpose of a company cancellation policy is to limit when, how, and why a client can cancel an appointment or service without penalty.
To clearly communicate this information, every cancellation policy template should include these key elements:
1. A timeframe to cancel a service with or without penalty
How long do you want to give the client to cancel their appointment time without penalty, and when does the penalty kick in? 24 hours in advance to 48-hour notice periods are the most common.
2. A late cancellation penalty
Are you going to charge a standard rebooking fee, a percentage of the cost of the service, or something else? In your cancellation policy, include exactly what your client will have to pay when they do a last minute cancellation, whether it’s a specific fee or a percentage of the job.
3. Contact information for cancellations
How should a client contact you to cancel an appointment? Let them know which contact methods you accept and how to get in touch by including the email address or phone number you want them to use.
4. A place for a signature
Before charging a client cancellation fees, they must accept your policy. Include your company cancellation policy on estimates, quotes, and contracts so a client can review it and acknowledge it with a signature.
Learn from the pros
Watch our video on how to make a cancellation policy, and get expert tips from landscaper Michael Bedell of Bedell Property Management
Company cancellation policy templates
Now that you know why you need one, you may be asking how to write a cancellation policy.
To help you get started, here are three cancellation policy templates you can use based on your service business and the policy that best suits your needs.
1. Short and sweet company cancellation policy template
This basic policy only addresses what happens when a client cancels an appointment. It’s a good policy to use when you’re starting out and aren’t sure what to expect in terms of cancellations and how you handle them.
Cancellation Policy – [Company Name]
Cancellations made [48 hours] or less before an appointment will be subject to a [rebooking fee of $50].
Cancellations made via [email to [email protected]] sooner than [48 hours] before an appointment will be processed without penalty.
2. Simple and straightforward company cancellation policy template
This policy covers more of your bases in terms of what counts as a cancellation, what happens when a customer cancels, and what the next steps are when a service business does.
It’s still clear and easy to understand, but it offers the company even more protection and information to the customer.
Cancellation Policy – [Company Name]
Please be advised that cancellations made up to [48 hours] before a scheduled appointment via [email, text, phone call] will be processed without a penalty.
Cancellations made [48 hours] or less before an appointment will be subject to a charge of [half of the service rate]. This includes appointments where our service provider is unable to access the property, is turned away, or the client is a no-show.
If [Company Name] cancels an appointment with less than [48 hours notice], a new appointment will be scheduled without penalty to the client, subject to availability.
3. Direct and detailed company cancellation policy template
This policy is geared towards explaining why customers can expect to pay a penalty for late cancellations while still leaving some room for the business owner to decide whether they want to charge one.
This policy may fit you if you want to evaluate whether to apply cancellation fees on a case-by-case basis. For example, you may not want to charge one if a customer has an unavoidable emergency.
Cancellation Policy – [Company Name]
Please note that once you have booked an appointment with us it means that we have reserved time in our schedule exclusively for you. If you cancel your appointment less than [24 hours] before it is scheduled to take place, you will be subject to a [penalty/fee/rebooking charge of $__].
To avoid a cancellation fee, please provide cancellation notice at least [24 hours] prior to your appointment.
You can cancel or reschedule an appointment by emailing us at [[email protected]], texting [xxx-xxx-xxxx], or calling our office at [xxx-xxx-xxxx].
Where to put your cancellation policy and when to send it
Company cancellation policies can (and should) be included in a variety of places. The most common being:
- On your website under your terms of service, terms and conditions, or as a separate page
- In your quotes, estimates, and contracts
- On your booking page
You should always send your cancellation policy to a customer before a job takes place. For example, make it available to:
- New clients when you send them an estimate, quote, or contract
- Existing clients when they book a new appointment with you
- Any ongoing clients in a separate email or document if the policy applies to them
Pro tip: Always communicate any changes you make to your cancellation policy so clients aren’t taken off guard with a surprise fee if they cancel outside the cancellation window.
Cancellation policy examples
Here are three real-life examples of service businesses with company cancellation policies and where they put them.
1. MIL-SPEC Landscaping
MIL-SPEC Landscaping includes its appointment cancellation policy as part of its terms and conditions on its company website.
2. Boardwalk Cleaning Co.
Boardwalk Cleaning Co’s cancellation policy is short and sweet and listed on their company’s terms of service web page. They require 24 hour notice to avoid a cancellation fee.
3. Cancellation policy on a quote example
You can also include your cancellation policy in the notes section at the bottom of your service quote. Here’s what that looks like.
How to prevent cancellations
The best way to avoid a missed appointment or cancellations is to get ahead of them. Prevent last minute cancellations by:
- Using an appointment reminder template to send reminder emails or texts to let clients know about an upcoming service call.
- Automating service reminders to keep you top of mind with your customers without having to take on the extra work of doing it yourself.
- Setting up appointment confirmation emails to send to your clients to avoid delays and prevent you from dealing with an empty calendar.
- Collecting a deposit upfront to ensure your customer is invested in completing the job before it starts.
- Offering flexible booking options that make it easy for clients to book appointments when it works best for them.
- Creating a company cancellation policy to deter clients from canceling in the first place.
- Unforeseen circumstances happen. Offering customers a chance to reschedule at the time of cancellation instead of removing the appointment entirely.
By staying on top of cancellations before they become a problem, you’ll benefit from a fuller work schedule and a better bottom line for your service business.
Originally published in June 2023. Last updated on September 4, 2024.