In recent times a key topic that is arising on social media is the ever-growing number of client cancellations that businesses are experiencing.

This is of grave concern with several businesses deciding to tighten their Cancellation Policies with some indicating that if they are given six hours or less notice that the full cost of the client’s treatment will be retained.  Unfortunately, this is illegal.

To address this problem, we need to examine two areas:

  • What does the law say about what is contained in a Cancellation Policy?
  • If a business is experiencing an increase in cancellations, what is the underlying problem and why is this happening?

Let’s first look at the legal guidelines under the Australian Consumer Law as to what is permitted to be included in a Cancellation Policy.

With the business owners, cancellations can result in loss of income and time, particularly if they are made at the last minute.

Under the Australian Consumer Law (ACL) your clients have certain rights to cancel a service from you.

It’s a good idea to have a cancellation policy in place to manage these situations and limit your loss, while complying with the law. Written cancellation policies can help prevent ambiguity and serve as proof of what was agreed upon when your customer made a booking for your services. 

You can access one here from APAN as we regularly review the wording to ensure it is complying with ACL laws. 

WHERE SHOULD YOUR CANCELLATION POLICY BE LOCATED?

Many small businesses outline their Cancellation Policies on their websites, have signage about their policy on display in their reception area and provide a link to the policy in any reminder emails texts sent to clients about their appointment.

Your cancellation policy, like all your terms, must be fair. The Australian Consumer Law (ACL) prohibits unfair terms, which are void and unenforceable.

WHEN TO DISCLOSE YOUR CANCELLATION POLICY

If you have a cancellation policy in place, especially one involving cancellation fees, it is your responsibility to bring it to your customer’s attention before they book their service.

If clients book your service when they are aware of your policies, they have entered a contract with you. Contracts can be entered into in a variety of ways, including:

  • signing a document
  • agreeing over the phone
  • clicking an ‘I agree’ button on a web page

It is good practice to have your clients sign acceptance of your terms and conditions before you provide them with any goods and/or services. If they refuse, seek feedback about their concerns.

WHAT TO COVER IN YOUR POLICY

In your Cancellation Policy, you should detail your cancellation process and timeframes and the fees you will charge for a cancellation, if relevant. This could be a fixed cost fee or a percentage of the cost of the cancelled service.

If you are planning on charging a cancellation fee, the law requires that this must be outlined in your terms and conditions and advertised to your clients before they make a booking.

The fee also needs to be reasonable and reflect the actual costs you suffered due to the cancellation.  This is a strict requirement of the law.

For example, if your client could not arrive because they had a car accident or because of extreme weather – in other words, situations that are out of their control, in such incidents, it would not be considered reasonable to charge them a cancellation fee.

If however, they cancel at the last minute you might reasonably charge a cancellation fee which takes into account the reasonable costs associated with booking and preparing for the customer’s arrival, as well as, the potential loss you have incurred.

CAN YOU CHARGE THE FULL FEE OF THE TREATMENT FOR LIMITED-TIME CANCELLATIONS?

Under the law here are some important things to note if you are charging a cancellation fee:

  • you cannot charge a client’s credit card without informing them or giving them the chance to dispute the charge
  • you can’t recoup the full cost of the service they have cancelled.

On social media this week someone indicated that if their client gave them six hours or less notice that the full cost of their treatment will be charged. 

Please note, as seen in the above clause, the business is not permitted to retain the full cost of the treatment. It may be unfair, but it is illegal and if you do so and the client seeks legal advice you may find yourself in a legally compromised position.

WHEN ARE CANCELLATION FEES APPROPRIATE?

According to the law, cancellation fees may be relevant in the following circumstances:

  • You operate an appointment-based service, such as a skin clinic, where clients book individual time slots, to protect you against late cancellations and no-shows.
  • You offer a subscription-based service, such as a monthly membership fee, and your client wants to finish their subscription before the minimum contract term has expired.

WHEN CAN CLIENTS CANCEL AND RECEIVE A REFUND?

ACL stipulates that consumers are entitled to cancel and receive a refund for a service that:

  • Was provided with an unacceptable level of care and skill.  For example, if your client has taken a 10-treatment package and on the 8th treatment they still have not seen an improvement, they have the right to request a full refund, based on their observation that you did not appear to have the due level of care and skill to deliver the treatment result they expected. 
  • They don’t believe that the treatment or product they were given was fit for the purpose it was requested for.
  • Was not delivered within a reasonable time when there is no agreed end date.

However, they can’t request a refund for any services cancelled because they:

  • Changed their mind about having their treated (buyer’s remorse).
  • Insisted on having it provided in a particular way, against the provider’s advice (this one often occurs with cosmetic tattooing).
  • Failed to clearly explain their needs to the provider or changed their mind about the outcome they wanted.
  • A problem with the service was outside the control of the provider, e.g. there was a power failure that interrupted their treatment but was not due to any wrongdoing of the operator. 

OTHER REASONS FOR CANCELLATIONS

Often clients will cancel because of unavoidable situations such as illness or emergencies. With the advent of COVID Long Haul, manifestations of extreme fatigue or brain fog are not uncommon. 

In fact, over 70% of studies now confirm that individuals who have had COVID will experience these and other symptoms and may feel unwell to drive or have the energy to commit to an appointment.

To gain an up-to-date understanding of these manifestations please access the COVID SKIN MANIFESTATIONS AND SOLUTIONS training manual that is now available on the APAN website

This document and video address the very latest evidence-based information on various manifestations and ways that you can provide your clients valuable support that is relevant to our changing world since the pandemic.

What is alarming is that many people experience these symptoms but have no knowledge of why they are experiencing these episodes. 

Isn’t it interesting that cancellations have over doubled since COVID? It pays to investigate this information and provide your clients with support and solutions, maybe you can give them a good reason why it is worthwhile not to cancel their appointment.

These are challenging times, and it may be prudent and use your discretion to waive cancellation fees in certain situations, as these may outweigh the lost revenue you have suffered.

Additionally, it pays to investigate further for underlying causes of these cancellations. 

Who knows, you may uncover ways that you can help resolve some of the contributing factors and create ways that can result in greater trust with your client and goodwill for your business. 

Please explore the COVID SKIN MANIFESTATIONS AND SOLUTIONS document, it will provide you with incredible evidence-based solutions for underlying factors that you may not be aware of.

If you wish to discuss these matters with an industry expert, please phone APAN on 07 55930360 – we would love to help you.