Can Businesses Charge Appointment Deposits and Cancellation Fees?

Yes, a business can charge you to schedule or cancel an appointment. But the law limits these fees.

Prevent these policies from catching you by surprise. Carefully read a business's appointment scheduling and cancellation policies. If you notice something odd, like a business requiring you to pay before your reservation, you may wonder if they can legally take your money this way.

Why Cancellation and Appointment Fees Exist

Getting your oil change, haircut, or teeth cleaned seemed like a great idea a few weeks ago. But the appointment is today, and you have a schedule conflict. Or you changed your mind and don't want to go.

You may be less likely to skip your appointment if you'd lose a deposit or pay a fee. But if you still do, the business can recover costs through cancellation or extra service fees. Unlike a product return, you might not get a refund for an unused service.

Service providers like auto shops, hair salons, and dentist offices can't make money during the timeframe they reserved for you. Often, the employees of these businesses only earn income when they serve a client. If a customer cancels, charging a fee is their only way to compensate for the loss.

When Can Businesses Legally Charge Fees?

The law allows businesses to create policies, fees, and service agreements as they wish — as long as they don't violate the laws of your state. You can usually find policies and fees in an advertisement disclaimer or the website's fine print.

Before you book an appointment, look for terms such as:

• A non-refundable deposit requirement to hold a time slot
• Specific dollar amounts for cancellation fees
• The ability to book one appointment or spend a certain amount to get one free
• Exact hour cancellation windows (often 24 or 48 hours in advance)
• A requirement to enter a credit card to hold the appointment
• Fees that apply to services you book or products you buy on the same day
• A requirement to put a percentage down (such as 50%) to reserve the service
• A deposit requirement for services over a particular value, such as over $100

These practices are typically legal. They help businesses ensure they can recoup the lost revenue due to no-shows or last-minute cancellations.

Medical Copayments

Medical services are different than most other paid services. Instead of an appointment fee, they usually have copays. These copayments go through insurance. Copays are standard practice in the medical industry and are often unavoidable.

Prepaid Travel Reservations

Some business types require you to prepay for your service. For example, you may pay hundreds of dollars to reserve a hotel room or a flight. Read and follow the business policies to protect your purchase. You might have a short time to cancel and refund your reservation.

Can a Business Ask for My Credit Card Details Ahead of Time?

Yes, a business can require you to give your credit card information before it reserves your appointment. It can also charge your card — within reason. When you schedule appointments, you must agree to the terms of service, including paying any upfront costs.

Otherwise, calling clients to charge cancellation fees could be difficult once they have missed the appointment. Most people won't answer the phone or willingly hand over their credit card information.

Illegal Practices Under Consumer Protection Laws

Generally, businesses can't charge you an unreasonably high fee for services they didn't perform. Usually, a late cancellation or no-show fee can't be as much as the total price you would have paid for the service.

For example, a salon couldn't charge you $300 for a $200 spa treatment you booked. Or the salon can't add another fee if it made a scheduling mistake and wants to move your appointment.

Watch for red flags, such as:

• The business asks you to pay in full before you've seen it in person
• The business owner demands you pay over the phone or online before you can see the facility or talk to the employees
• The cancellation fee is 100% or more of the service cost
• The fee policies are abnormally confusing, or the business refuses to let you read them
• The business charges your card without any notification about how much the reservation fee will be

Scammers might use fees to charge customers illegally. Being cautious can help you protect yourself and your money. Consumers have a right to see the business and have some assurance that it will complete the service in good faith.

Understanding Your State Consumer Protection Laws

Most states have extensive laws on your consumer rights and the specific industry of the service. These are usually called “codes." They list any permanent active law in your state.

The most relevant laws will be under sections called:

• Consumer Protection
• Business Regulations
• Businesses and Professions

It is wise to know your rights as a consumer and question practices that seem illegal to you. This awareness helps keep businesses and employees from getting away with mistreating clients or otherwise acting illegally.

What To Do If a Service Seems Suspicious

Call the business to ask questions about their policy if you need clarification. You can also call your state's licensing agency to question a business practice. You may want to report a suspicious situation to the Better Business Bureau (BBB).

Some businesses don't charge for situations outside your control, like a car accident, family emergency, or extreme weather. You can call to explain your circumstances. The manager or owner might offer a full refund for your missed appointment at their discretion.

Booking online can also have technical issues or automatic form-fill mistakes. Always check for accurate dates, addresses, confirmation emails, and additional policies when booking online.

Hiring an Attorney for Consumer Issues

Small businesses and workers could have the best intentions with their policies but still break a local or state law. Sometimes, all it takes to get your money back is a letter informing the business that its practices are against the law.

But when a business refuses to offer a fair solution, you may want to get legal advice. A consumer law attorney can review your situation and explain whether you have a claim.