Deposits - To Charge or Not To Charge?

Deposits and charging for consultations. These are two aspects of owning and running an aesthetics business that make practitioners uncomfortable. Coming from the NHS, many practitioners feel awkward with conversations about money, particularly conversations around deposits and charging for consultations. Read on to dig a little deeper into deposits.

The route you take with your business regarding deposits is dependent on a number of factors, from how established your business is, your own personal ethical stance, to the logistics of collecting deposits and the legalities. 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 principals, 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 is a deposit?

When it comes to aesthetic treatments, a deposit is part payment of the total cost of the treatment upfront, at point of booking. The purpose of a deposit is to protect the practitioner against no-shows and late cancels and cover the cost of any product ordered and paid for for that patients treatment.

Deposits can be refundable or non-refundable, can be for the total cost of the treatment or a portion of. Can be charged at point of booking or can be required a set period of time prior to the appointment date.

What are the reasons to charge deposits?

There are many great reasons to introduce deposits into your business.

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 more affluent and will be less price sensitive.

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.

Deposits protect your time

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

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.

What are the reasons not to charge deposits?

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

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.

Deposits need a robust policy in place

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

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 have sufficient time to fill their slot. Legitimately you can only keep an amount equal to the administrative costs incurred.

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

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. 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.

Deposits have medico-ethical considerations 

Patients have the right to refuse or choose their treatment, making a rational, informed decisions about their treatment and a practitioner should act in the best interest of the patient.

Does paying a non-refundable deposit put undue pressure on patients to go ahead with treatments which 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 matter. But it is one you should consider and have clarified your position on.

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

Whether you choose to introduce a deposit or not, 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.

We believe we have a better solution here at Glowday.

We don’t enable the charging of deposits, as we believe patients shouldn’t feel unduly pressured to go ahead with treatments that may or may not be right for them. Instead, we help protect your time in an open, fair and transparent way.

You set your late cancellation and no-show percentages when you build your Glowday treatment menu. These are percentages, rather than a fixed value, as it allows you to charge a fair amount, should the patient not turn up or cancel within 48 hours of the appointment.

The benefit of this is that if your patient was booked in for a full face rejuvenation and didn’t show, you’re covered for the cost of any products you’ve purchased ahead of the treatment. If they didn’t show for a chemical peel, they are charged proportionally.

We are also REALLY clear about when the charges are triggered. We inform the patient of your late cancel and no-show percentages

  • at point of booking
  • in the appointment confirmation
  • in an email reminder 3 days prior to their appointment

AND they have access to a patient account area, where they can access the details of all of their appointment.

And 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.

And practitioners like it!

"I have mine set at 25% and 30% now. I do like how it's a proportion of what treatment they were in for." Jess
"Had my first no show. Called her, left a message saying hope all OK but a charge would be made but I'd take it off a reschedule. Gave it an hour, then charged it." Shelley
"If I hadn't booked her into my Glowday diary, I'd never have asked her for a payment for a no show." Gemma

If you'd like to find out more about how Glowday can help you manage your no shows and late cancels, drop Jon and email on Jon.Williams@Glowday.com

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