4 reasons why a cancellation policy is important and what it should say

As a service provider, it’s inevitable that at times a customer will cancel their reservation. Sometimes it’s unavoidable by the customer such as sickness or family emergency, but other times, it’s poor planning or lack of care on the part of the customer. This can be frustrating as well as costly as it likely means lost revenue for you.

Having a clear cancellation policy in place will help you and your customer. It’s important to have a policy for many reasons, we’ll explain more below.

For Protection A cancellation policy is a way to protect yourself from lost business and revenue. A good policy should have a fee or penalty for cancellation, and enough time built into the cancellation notice so you can re-book the spot.

Demonstrates Commitment When a cancellation policy is in place, and agreed upon by the customer, then it shows a commitment to the booking on the part of the customer. If you customer books a rental and knows that there is a fee for cancellation, it will make it less likely that they will no show for their reservation.

Shows Professionalism Some may think that having a cancellation policy will turn customers away as it may be too harsh or rigid, but in fact, it usually is just the opposite. People will often find that having clear policies and details about booking with you shows professionalism and organization as a business.

Provides Accountability A cancellation policy will hold your customers accountable if they do need to cancel their reservation. When the policy is stated and communicated to the customer, then they are aware of what will happen if they decide to cancel. The policy should be in writing and included on your website and in any correspondence you have with the customer. The WebReserv booking system offers you many options in the setup include your cancellation policy including on the booking widget as well as in emails sent to the customer. Further, a customer must agree to the policy in order to complete the booking.

Now that you know why it’s important to have a policy, what should the policy say? Here are a few key guidelines when creating a policy.

• Establish a time frame for cancellation – “Cancel within 72 hours of your start date”
• Define a consequence if not cancelled within guidelines – “If you cancel less than 72 hours in advance, there is no refund.”
• Keep it simple and easy to understand.
• Clearly state the policy both in writing and verbally to your customers.

Quick Tip! Notice how the above cancellation policy has a no fee, full refund option is the customer cancels within 24 hours of making the reservation? This is a good idea to offer this option as customers are more likely to make the booking if they know they can cancel penalty free within 24 hours. It’s not uncommon that a customer will want to at least book the spot and have some time to confirm with other travelers that the dates and times work.

WebReserv not only allows you to include your policy in the booking process, but it also give you the option to set up the fee for a cancellation, and will charge accordingly if a booking is cancelled.

If you are not a current WebReserv customer, but have been looking feature such as this, reach out to our experts to learn more. You can also TRY US for free for 30 days. We offer an affordable, user friendly booking system.