How to Write a Cancellation Policy

When you’re running a business, interruptions to your schedule can be frustrating and sometimes even costly. Getting clients to book appointments is a great feeling - until a number of them don’t show. Cancellations can occur due to illness, traffic, or the client simply forgetting their appointment time. Whatever the reason, it can lead to lost time and profits. It is important to safeguard your business’ schedule and provide clear policies for cancelling an appointment.

One of the easier ways to do this is with a cancellation policy. This document is beneficial because it creates a clear and consistent policy and is used to set expectations for those who schedule an appointment with your business. In this guide, we’ll go over what a cancellation policy should include, why you need one, and some tips to politely enforce your agreement.

What is a cancellation policy?

A cancellation policy is a written agreement between a service provider and their client that clearly defines consequences, typically a fee, if the client cancels the appointment. The fee is either a percentage of the total cost of service or a fixed amount. If you have a waiting list, a late cancellation is costing you money because the booked time slot could’ve been easily filled. Businesses use cancellation policies as an essential tool in recouping lost money from these canceled appointments.

Cancellation policies are meant to be firm but still extremely reasonable. You do not want to put your clients off before you get to work with them, so make sure the rules of your policy aren’t overly complex or unnecessarily strict.

Why does every business need a cancellation policy?

Establishing a cancellation policy adds professionalism to your business, and the policy works both ways. Adding what you and your staff will do if you initiate the cancellation will give new clients reassurance. On the other hand, clients will be incentivized to either make it to their appointment or cancel early enough for you to re-book their scheduled time.

Informing clients that you will charge a fee for appointments canceled after the agreed-upon time frame is a huge deterrent for no shows and clients that run late without communication. Creating an effective cancellation policy isn’t as tricky as you might think. Keep the following recommendations in mind and your policy should be easy to understand and follow.

Writing an effective cancellation policy

1. Be mindful of your tone
2. Define a cancellation time frame
3. Outline penalties for cancelling
4. Post the policy on your website or scheduling software.

Be mindful of your tone

Your wording should be professional but not accusatory. Don’t start by thinking of your policy as a way to dole out punishment. Your goal is for clients to be motivated to keep their appointments, not overwhelmed by the requirements expected of them.

Like any other binding document, use proper capitalization and punctuation. Your policy needs to be written in simple language with clearly laid out instructions.

Define a time frame

Depending on your business and the way you handle scheduling, you will need a certain amount of time to be notified that a client is canceling before the actual appointment day. The most common (and easiest to remember) periods of time are 24 or 48 hours.

In a way, the time frame for cancellation is the basis of your entire policy. If the client alerts you that they won’t make it in the specified time, fees and other consequences will not apply to them. Once that period of time passes, cancelling opens clients up to the penalties detailed in your policy.

Explain penalties for canceling

We never want to talk about cancellation penalties until it becomes a problem. However, it’s important to clearly outline any fee or penalty that results from a cancellation. Your customers will appreciate the transparency. If your business offers prepayment or a reservation fee for booking a time, you may consider only offering partial refunds for late cancellations or no shows.

Avoiding a cancellation fee is the main incentive for clients when reading cancellation policies. Therefore, you need to tell clients exactly what they will be charged and when in the simplest way possible.

Do not forget to detail and clearly communicate how you will enforce your cancellation policy. The policy and fees are generally enough to help manage unnecessary cancellations, and they help cover the lost time and revenue that results from a cancellation. If someone complains about not knowing the policy, be sure to make it more prominent. Another option would be to add a checkbox on the appointment scheduling form to ensure the policy is read and understood.

Post the policy on your website or scheduling software

Once you have a policy written, be sure to post it in a prominent location. This way there are no unpleasant surprises for your customer, and you have communicated reasonable expectations regarding cancellations. If you have an online appointment scheduling tool, you can post the cancellation policy directly on the page or include it in the appointment confirmation email. For general helpfulness, you might want to also communicate how to cancel an appointment when necessary. This ensures your policy is well outlined.

Cancellation policies are extremely useful for sudden or unexpected cancellations. Setting a clear standard means no one is surprised, even if a cancellation results in an unfortunate fee. With TimeTap you can reduce no shows and automate the booking process before it gets to that point. Your booking tool should help you communicate your policies for booking and canceling appointments effectively.

With our waitlist and reminder features, TimeTap helps reduce the impact of preventable cancellations and no shows.