Deposits and charging for consultations.

Coming from the NHS, many practitioners feel awkward with conversations about money, particularly conversations around deposits and charging for consultations.

The route you take with your business regarding protecting yourself from late cancels and no shows is dependent on a number of factors, from how established your business is, your own personal ethical stance, to the logistics and legalities of collecting and keeping deposits.

Typically, a practitioner will introduce a deposit policy once they have been subjected to a number of late cancels and no-show, which leave them with unexpectedly empty slots, with too little time to fill.

As with most things in business, there are some guiding principles, but there is no ‘one size fits all' answer. To determine whether charging deposits is right for your business, let’s dig a little deeper into what deposits are.

What’s a deposit?

A deposit is part payment of the total cost of the treatment.

The purpose of a deposit is to protect the practitioner against no-shows and late cancels and cover the cost of any losses.

Your policy needs to be fair and reasonable and needs to be communicated clearly.

• How much is the deposit?

• Is the deposit refundable or non-refundable?

• Is it charged at point of booking, or a set prior of time prior to the appointment?

• What results in the deposit being held?

Why charge a deposit?

There are many great reasons to introduce deposits:

1. Deposits are a screening tool

By charging a deposit, you are adding a layer of friction.

Typically, businesses work to reduce friction at all points in a customers journey, but it could be argued that by charging a deposit, you are attracting only high intent customers. Those who are committed. Those who are open to the advice and recommendations you might give. Additionally, if a patient is happy to pay a deposit, it is likely that they are happy to pay for the treatment.

2. Deposits are a positioning tool

By charging for your time, there is an upfront, perceived value to your knowledge and time. You are positioning yourself as an expert.

3. Deposits protect your time

If your patient doesn’t show up, or cancels late, you’re getting paid for your time. Not as much as a full treatment, but more than if you didn’t charge a deposit.

4. Deposits help with cash flow

As an independent business, particularly when you’re starting out, cash flow is EVERYTHING. Deposits at point of booking, with payment following the treatment, help you to maintain a steady flow of cash into your business.

Why shouldn’t you charge a deposit?

It seems like charging for deposits is a no brainer! But hold your horses…there are issues with charging deposits.

1. Deposits add friction

Whilst this can be seen a positive, as outlined above, it also reduces the pool of people who might book you, as they will be put off by having to pay a deposit. You have to weigh up attracting a smaller number of higher intent, potentially more affluent patients or attracting a larger number of patients for whom their intent and spending power is variable/unknown.

2. Deposits need a robust policy in place

Legally, many deposit policies don’t actually hold any water. In order for your deposit policy to stand up to scrutiny, it needs to be fair and reasonable.

Generally, a business is only entitled to keep hold of a deposit amount sufficient to cover their actual losses.

For example, if you charge a deposit and the patient cancels the appointment 3 days prior to their appointment, you reasonably have sufficient time to fill their slot, so would be unlikely to be allowed to keep the deposit if challenged.

But, if a patient fails to show up on the day, leaving you insufficient time to fill their slot, you can reasonably keep most of - if not all - of the deposit paid.

3. Deposits can be a faff

There is admin involved in deposit collection. You also need to be prepared for patients to challenge your policy and be prepared to reimburse deposits, if they can argue your policy isn’t fair or reasonable. Additionally, many practitioners allow patients to redeem the deposit against the treatment value. So, you have to have systems and processes in place to properly track and reconcile payments.

4. Deposits have medico-ethical considerations 

This is an issue unique to medical aesthetics, compared to typical beauty treatments. Patients have the right to refuse or choose their treatment, making a rational, informed decisions about their treatment and a practitioner should always act in the best interest of the patient.

Given that a deposit is part-payment towards a treatment, does paying a non-refundable deposit put undue pressure on patients to go ahead with treatments which may/may not be suitable or wanted purely because they don’t wish to lose their deposit?

Only you know what your stance is on this particular point. But it is one you should consider and have clarified your position on.

There is another way

Late cancel fees and no show fees aren’t the same as deposits

Late cancel and no show fees help protect your time in an open, fair and transparent way.  Your patients are not part paying for treatment, they are paying a fee to cover your losses if they late cancel or no-show.

How does is work with GlowdayPRO?

When you going GlowdayPRO, you set your late cancellation and no-show fees as a percentage of the treatment value, or fixed fees.

We make your policy and fees REALLY clear to your patients, informing them at numerous points:

- at point of booking

- in the appointment confirmation email

- in an email reminder 3 days prior to their appointment (before the policy would come into effect)

Your patients have instant access to their patient account, where they can access the details of all of their appointment and can cancel and reschedule themselves.

Implementing your policy is REALLY easy. If a patient fails to show up, or cancels late, you simply click a button. We process the payment for you and pop it into your Stripe account. It couldn’t be easier, it doesn’t require any additional admin from you and we take the awkwardness out of the whole process.

To charge or not to charge?!? That is the question

Whether you choose to introduce a deposit or not, or prefer late cancel and no-show fees is obviously a very personal decision, depending on the needs of your business. By weighing up the pros and cons, you can make and informed decision.