Protect your Revenue from No-Shows and Last-Minute Cancellations

In the sports facility industry, last-minute cancellations and no-shows are four letter words.

I’m sure you’re very familiar with the frustration of having an rental or lesson scheduled, only for a client to call in and cancel an hour before it’s supposed to start.

This goes beyond a minor annoyance; it really hurts your business. I did a little study using one of my sports facility clients. From it, I found that they lost 13 percent of their revenue due to last-minute cancellations and no-shows.

That’s an alarming number. However, those losses can be stopped with two simple tools: required upfront payments and a firm refund policy.

Upfront Payments

You need to collect full payment, or at least a significant deposit, at the time your client books a lesson or rental.

When clients pay upfront, the odds already increase that they’ll keep their appointment. They’ve proven that they’re dedicated to coming.

Another huge benefit: upfront payments drastically reduce the amount of time you or your staff has to spend tracking down payments and handling other accounts receivable administrative tasks.

Refund Policy

A firm refund policy is also an essential tool for eliminating no-shows and late cancellations.

Usually, when your clients cancel at the last minute, it’s it’s not because they’re trying to be rude, it’s just human nature. If the consequence doesn’t affect them, then it’s easier to justify cancelling. The refund policy holds them accountable.

I think it’s fair to give full refund as long as the client cancels at least 48 hours prior to the scheduled event. 48 hours gives you an opportunity to try to fill that spot and make up the revenue you would have lost from their cancellation. Plus, ideally, their refund will go back to them as a facility credit, not as cash – which protects your business. (eSoft Planner scheduling software automatically credits any cancellations made within the refund policy’s terms back to the client’s account – then they can use it easily when they check out the next time.)

But if the client cancels in fewer than 48 hours, they should still have to pay the full amount.

Of course, you can always make exceptions. However, be careful not to make too many. Over-riding your refund policy too often will cause clients to write it off – leading you right back to your initial problem of revenue loss.

What are your facility’s policies for deposits and refunds? Leave a comment and let me know.