Can Businesses Charge Appointment Deposits and Cancellation Fees?

If you're like a lot of people, getting your oil changed, hair cut, or teeth cleaned seems like a great idea a few weeks ahead of time, but then the day of the appointment arrives and you have a schedule conflict or you just don't want to go.

Service providers like auto shops, hair salons, and dentist offices want to prevent you from backing out of your appointments last minute because then they can't make money during the time that they reserved for you. That's why many businesses charge cancellation fees or extra service fees.

To help prevent these policies from catching you by surprise, it's a good idea to read a business's appointment scheduling and cancellation policies carefully. If you notice something odd like a business requiring you to put money down to make a reservation or charging for cancellations, you may start to wonder if they can legally take your money in this way.

When Can Businesses Legally Charge Fees?

The law allows businesses to create their own policies, fees, and service agreements as they wish — as long as they don't violate the laws of your state.

Policies and fees can often be found in marketing text or fine print. When you book an appointment, look for terms such as:

• Non-refundable deposits to hold an appointment
• Specific dollar amounts in cancellation fees
• Free appointment when you spend a certain amount
• Book one appointment to get one free
• Specific hour cancellation windows (often 12, 24, or 48 hours in advance)
• Enter a credit card to hold the appointment (card will not be charged until service is complete)
• Fees that apply to services booked or products purchased on the same day
• You must put 50% down to reserve this service
• Deposit required for services over $100

^{Note: For medical services, co-pays are handled through your insurance policy and are treated differently than a service appointment fee. These are standard practice in the medical industry and often cannot be avoided.}

These practices are legal and are generally in place to ensure that the business doesn't lose money on no-shows or last-minute cancellations. Often, businesses or service employees are not paid unless “someone is in their chair" so charging fees for cancellations are their only way to make up for the loss.

Typically, credit card information is taken ahead of time because it is difficult to call and charge a client the cancellation fee once they have missed the appointment. Most people just won't answer the phone or willingly hand over their credit card information.

Practices That Are Illegal Under Consumer Protection Laws

Generally, businesses cannot charge you the full price for services that were not performed, such as a tire change or a haircut. They may charge a percentage of the service or a set fee for you canceling or being a “no call, no show," but they cannot charge the full amount for services not rendered.

Scams exist that ask for money for a service that is never provided, so being cautious is key to protecting yourself, your identity, your credit card information, and your money.

Be wary of businesses asking you to pay in full before you have seen the business in person. Demanding that you pay over the phone or online before letting you see the facility or talk to the employees is also a red flag. Consumers have a right to see the business and have some assurance that the service will be completed in good faith.

Understanding Your State Consumer Protection Laws​

Most states have extensive laws on your consumer rights and the specific industry you are booking a service appointment in. These are usually called “codes" and list any permanent law currently in place in your state. The most relevant laws will be under sections called:

• Consumer Protection
• Business Regulations
• Businesses and Professions

Steps to Take When You Are Suspicious of a Service​

You can call your state's licensing agency to question a business practice or report a situation to the Better Business Bureau (BBB). Always call the business to ask questions about their policy if something is unclear.

Some businesses do not charge for “situations outside of your control" like a car accident, family emergency, or sick child. It may be the manager or owner's discretion but it is worth a call to explain your circumstances.

There can also be technical issues when booking online, so always check for accurate dates and addresses, confirmation emails, or additional policies when booking online.

Using an Attorney for Consumer Issues​

A consumer law attorney can review your situation and explain if you have a case or not. Businesses and workers can have the best of intentions with their policies but still be breaking a local or state law. Sometimes all it takes is a letter informing the business that their practices are against the law in order for you to get your money back.

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