“Signed, Confused in Cakeland” is a regular feature where I answer the small but important questions. Or just the funny questions. Or whatever questions you might have, really, which may not need a full on blog post.
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|This is my dog Teddy. He doesn’t get out of bed unless you pay him a deposit.|
How do you deal with deposits for orders? Do you insist people give you a deposit, and if so – how much? How do you tell people what the policy is without seeming demanding or grabby?
Confused in Cakeland
Hey there Confused in Cakeland,
I’m one of those very trusting people who thinks everyone is nice and nobody would ever shaft me. In the beginning I didn’t take deposits, I just took people at their word that they would pick up their item and pay for it.
It took exactly one person shafting me for me to realise that while I was being nice, I wasn’t being terribly business savvy.
I wrote a post a little while ago all about developing your business policies and practices which will give you a bit more in depth information – you can read it here.
That being said:
1) I always take a deposit. The only exception (which is very rare) is when it’s for a very small order from a client who I have a long term established relationship with.
2) I take a 50% deposit. Even if their order is $20. It’s about my sticking to my stated policies more than absolute dollar value. Plus even at $20 there is still some investment I’ve got to make to get their order completed.
3) At the end of every consultation (in person or via email), I say, “If you’d like to book your order in with us, we appreciate you paying a 50% deposit. We do not consider an order confirmed until the deposit has been received. This can be paid via the following methods: (etc)” It’s rare that someone complains about this, but when they do I just politely explain that the deposit procedure is there to protect both them and me. If they’ve paid a deposit, nobody else gets their spot (they don’t need to know how many or how few spots actually exist.) It’s all about THEM, remember?
4) I decided early on what my refund policy would be – eg they get a full refund if they cancel before a certain date, or what the reasons I might be willing to refund a deposit would be, etc. If you’ve taken a deposit, and you limit your orders and they cancel…that’s an order you did NOT take because you committed to them. You shouldn’t refund it. If they change their mind entirely about what they want (from cake to macarons or something) then just apply the deposit to the new order. When you’re deciding how much deposit to take, also decide what the rules around that deposit are.
5) Publish your deposit policy – in the footer of your emails and on your website. That way most potential customers will not be surprised when you ask for the deposit.
You’ve got to be in it for your customer, but you’ve also got to protect your investment.
Show me the money,