Reasonable?

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Generic's picture
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We don't take deposits. We get very few cancellations and most are weeks in advance and give me plenty of time to resell. But, there are a few who reserved and cancel last minute and pay the cancellation charge. 

Recently we have had two. One cancelled on a package that clearly says "no cancellation, no changes" and offers a special rate. They cancelled and ask for "consideration". We couldn't resell the room. We'll see if they rebook, but I don't really see a point in any consideration, since I couldn't resell and it was a rate that they knew offered no cancellation. 

The second cancelled within the normal cancellation period. I cancelled at no charge, as per our policy, but told them that when people cancel we retain the right in the future to ask them for a non-refundable deposit on future reservations.

Am I being reasonable with these two? I'm pretty sure I am. What would you have done in my situation?

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Hi Eric!  You asked if you were being reasonable.  YES, very!  I wounder though how difficult it will be keeping up with this.  Do you have a system that will assist you on this or how will this be managed? 

And how will you alert them of this if it is not part of your normal policies that they will be agreeing to when they book (figuring they book online)? 

Generic's picture
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copperhead wrote:

Hi Eric!  You asked if you were being reasonable.  YES, very!  I wounder though how difficult it will be keeping up with this.  Do you have a system that will assist you on this or how will this be managed? 

And how will you alert them of this if it is not part of your normal policies that they will be agreeing to when they book (figuring they book online)? 

I have so few cases of this that I usually keep it in my head and note it under their name on my reservation system. When the reservation sees similar names it shows it to me. 

To be honest, in any of these cases, they haven't ever bothered to reserve a second time.... yet. I assume that since they have been warned in email that they understand that it applies to them. When and if someone does rebook, they will get an email reminder of that policy and ask if they want to pay the deposit (non-refundable) or give up the reservation. I keep all my email correspondence, so I have proof, if needed.

Personally, I think the warning scares them off from doing it a second time. We used to have a guy who would call to reserve all the time and hang up as soon as we asked for the credit card. He did this repeatedly for five years! Not Albert Einstein's cousin!

Madeleine's picture
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Always surprised by guests who don't think we are going to ask or a cc. Had one a few months ago who promised to call back the next day with a card, couldn't use the one they had, it was over limit, yada yada, never called back.

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Joey Camb's picture
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I always say if I don't have a card number or payment in full then you don't have a reservation its that simple.

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Generic's picture
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And never will. 

Joey Camb's picture
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If it counts for anything I think you were being very reasonable as well.

Birdie's picture
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Your original question was whether you were being reasonable. My answer to that is YES! Stick with your decisions, they were well thought out and fair.

Generic's picture
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 Thank you. 

 to the forum!

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Thanks Eric!

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Is taking a deposit a bad thing? I would think with interest rates so low in Canada and the US that the money earned by either party is pretty small so why not just take a deposit to resolve the issue? We find it also helps our cash flow.

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Is taking a deposit a bad thing? I would think with interest rates so low in Canada and the US that the money earned by either party is pretty small so why not just take a deposit to resolve the issue? We find it also helps our cash flow.

Hillbilly's picture
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Just wondering. Why would you not take deposits and leave people the option to cancel? If they have been charged a non refundable deposit, they will not cancel. If they do, they already know they are out the money. I started this about 3 months ago and it is a lot better than before when I was not charging a deposit. If they don't want to pay the deposit, then they are most likely making sure they have an out if they need it. This leaves you scrambling at the last min to try and book the room they just canceled. Also if they have not agreed to your terms by accepting your policies ( Not just by phone conversations but by documentation that you can prove came from them.) Then if they cancel and you charge their card and they dispute it. The credit card company will give the money back to the customer 100% off the time. You might not get a lot of this happening to you now. But with the way the economy is right now if people have a way to get their money back from you they will. If you are bringing in $200.000.00 a year and 10% cancel last min and you can not rebook the room do the math. This was happening to me until I fixed the problem.

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Madeleine's picture
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It's me who gets the 10% cancellations. And, yes, it works out to either a lot of money or a lot of work or both! And we take deposits at reservation starting this year. 7 weeks into the year and we are right on target...10% cancellations already. Unfortunately, those cancels were made on the old policy so we didn't even collect the $25 fee.

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 We take a deposit both to guarantee the room for the guest's peace of mind and to ensure that they are serious about staying with us.  We have a minimum 2-night deposit or 50% for stays of 5 nights or longer.  Our cancellation-with-$25 service-charge period is 30 days so those who made the reservation in haste usually cancel with enough lead time for us to rebook the room.  With less than 30 days notice we only refund if we can rebook the entire original reservation.  When we first tightened up our cancellation policy I was unsure that it would work, but after having it in place for about 5 years I can say that it works fine.  We rarely get last minute cancellations, and if we do, we are covered pretty well.

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Hillbilly's picture
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I hear you. I think that you will find you have corrected your problem. Are you having your reservation program charge them? If you are, you will be protected with your cancellation policy on disputes. You will weed out these people that are canceling. Let us know if your cancellation numbers start going down. I know ours have a lot.

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Bob wrote:
I hear you. I think that you will find you have corrected your problem. Are you having your reservation program charge them? If you are, you will be protected with your cancellation policy on disputes. You will weed out these people that are canceling. Let us know if your cancellation numbers start going down. I know ours have a lot.

Still at 10% so far this year. Perhaps fewer reservations in advance is what I'll actually end up getting!

Generic's picture
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Bob...

To be honest, we get very few cancellations at all. And most of the cancellations we get are far in advance and we can rebook them, easily. (In other words, the considerate).

It's the people who hold out for the 8th day that are problematic... and those are almost exclusively from our southern neighbour. That is why I decided to warn her that we reserve the right in the future... because from my perspective, she's a flake and doesn't understand or respect my business. 

How do I say this nicely... 1/3rd of my clients are from the this one particular country but almost every single cancellation that I have had in the last year are also from this country. So, how do I not penalize my other 2/3rd of my clients for the bad behaviour on the part of 15 guests all of which come from one particular country. Or do you think I should have a deposit policy that says "no deposit unless you are from ______." That doesn't look good, either.

Hillbilly's picture
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I would just charge everyone a deposit. I would not leave myself open for problems even if it is just a few a year. I think by doing that you will not have those people from that county not book. It will weed out those type of people so to speak. What is your reason for not wanted to charge a deposit?

Generic's picture
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A few reasons...

Some of my guests prefer to pay cash and not use a credit card. Some have Interac (our national debit card system) and borrow a CC to make and guarantee their reservation. 

People feel more at ease when they don't have to put down a deposit. I certainly do, when I travel.

My competition for the most part also doesn't charge a deposit.

It's not an all around problem. It's a limited problem. For the most part it's really not a problem and as I said 95% of my clients are respectful. It's when they aren't that I have a problem.

Look, I'm also not comfortable with processing charges when people aren't here. It's harder when you deal with a lot of International guests. It's just so much easier when they have their chip&pin card here.

Some people also travel with special cards when they travel. I do. I have a debit card denominated in Euro and a credit card denominated in USD. My Aussie/NZ guests often have special debit cards in CAD or USD that they use when they travel.

Madeleine's picture
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We have had a few guests who want to pay cash when they arrive. We don't charge the deposit for them. Generally, if they ask in advance to pay cash, they show up. Don't know why it is that cash-paying guests are more responsible in that regard, but it seems they are.

Check-payers, too.

Some guests have made the rez online and asked if we would refund the deposit when they arrived with cash.

Hillbilly's picture
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We with what you have said you are pretty set on not taking a deposit. Everyone is different with the way they do things. That said, I think by the way you are set up you might have to just live with the problem you are having. There is not really any other way to do it. I had this same problem and now I don't. I can only say what worked for us. If you can live with the way you are doing it now and are happy with it. Then don't change your system. You could always do a trial run and see what happens. You can always go back to the way you have it set up now. You don't have to charge a lot. (maybe $25.00 deposit just to make sure you are receiving a valid card) That would not keep someone from booking with you. If it does, I wouldn't want them to stay with me. Just an idea for you! ........Just remember, times are changing and people are losing their jobs and might cancel last min because they might not have the funds that they thought they were going to have. We are probably all going to experience more cancellations this year.

Generic's picture
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I have considered it, but not ready for it. But I think a policy of requiring a deposit on people who have cancelled in the past should be reasonable, no?

I already booked one of the rooms for some of the days. 

I do offer some rates during certain periods that are prepaid. No cancellations, no refunds, no changes. So, I do make more when they don't prepay.

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Eric Arthur Blair wrote:

I have considered it, but not ready for it. But I think a policy of requiring a deposit on people who have cancelled in the past should be reasonable, no?

Yes, that sounds reasonable. In my case it would have had to have been non-refundable as they kept cancelling 8 days out.

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 I think you have every right to keep the deposits as the packages are stated " no cancellations". You don't get a lot of cancellations so it is obvilously clear. They probably go thorugh life canceling at the last minute for everything and are in the habit of asking for consideration - it probably works sometime. I don't think you should. Stick to your policies.

And to the other email - you are wise to refuse to take the reservation a year out. We had an inn here fogive a last minute cancellation as they rebooked. Then they cancelled outside the cancellation timeframe so incurred no penalty.

RIki

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Generic's picture
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Yeah, that's a known trick, to rebook outside of cancellation in hopes of skipping the charge. The policy (if you allow this) is to say that's not a problem... let me process the cancellation charge, issue them a gift certificate and then rebook them. They can bring the gift certificate with them to pay for part of their stay. And that usually ends that.

Madeleine's picture
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Maybe for the packages or other special deals have it be 'no refunds' as those might be hard to resell. Otherwise, what you're doing is working for you.

We have around 10% cancellations over the course of the year, many of which result in us having to piece together a weekend at the last minute. We HAD a nice 3-night stay and now we have 3 one nighters instead. It's a PITA! That's why we now take deposits.

We've had a guest cancel at the last possible point to not incur a charge 3 out of 4 years. Last time she cancelled she wanted to rebook for this year. So, 53 weeks in advance for me to hold the room for 52 weeks so she could cancel again. I told her she would have to reserve closer to the date this year as I could not hold the room again for so long.

I think that's fair to ME altho she did not think it was fair to her. She's never been charged because she always cancels 8 days before arrival. And I've had to piece a 3-night stay together over a weekend that is usally booked well in advance. I've never gotten the full weekend rebooked.

 

Generic's picture
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Madeleine wrote:

Maybe for the packages or other special deals have it be 'no refunds' as those might be hard to resell. Otherwise, what you're doing is working for you.

We have around 10% cancellations over the course of the year, many of which result in us having to piece together a weekend at the last minute. We HAD a nice 3-night stay and now we have 3 one nighters instead. It's a PITA! That's why we now take deposits.

We've had a guest cancel at the last possible point to not incur a charge 3 out of 4 years. Last time she cancelled she wanted to rebook for this year. So, 53 weeks in advance for me to hold the room for 52 weeks so she could cancel again. I told her she would have to reserve closer to the date this year as I could not hold the room again for so long.

I think that's fair to ME altho she did not think it was fair to her. She's never been charged because she always cancels 8 days before arrival. And I've had to piece a 3-night stay together over a weekend that is usally booked well in advance. I've never gotten the full weekend rebooked.

It was specified as "no cancellation, no changes, no refunds" and I remind them to buy third-party insurance as well. I give them a notice that gives them a 24 hour window to cancel or make changes and then once processed, it's a done deal. They knew that, but still asked for "consideration" in the future. The only time I have open rooms is the winter. I have no deals that I make in the summer.

That's why I warned her that we reserve the right to ask for a deposit. Once someone cancels like that they are more likely to cancel in the future, because they don't seem to value the costs of my holding a room for them. Hey, maybe it's the same one... this guest is a state that borders my province.. but doesn't have a major interstate that goes from my province to this state. (hints)

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Eric Arthur Blair wrote:

 

 

Hey, maybe it's the same one... this guest is a state that borders my province.. but doesn't have a major interstate that goes from my province to this state. (hints)

OK, that narrowed it down to NH or ME. Unless you count 91 going from NH thru VT to PQ. If you do then it's ME. (Not me, ME!)

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Madeleine wrote:

Eric Arthur Blair wrote:

 

 

Hey, maybe it's the same one... this guest is a state that borders my province.. but doesn't have a major interstate that goes from my province to this state. (hints)

OK, that narrowed it down to NH or ME. Unless you count 91 going from NH thru VT to PQ. If you do then it's ME. (Not me, ME!)

91 doesn't come up to the border. In fact, this state doesn't have a major interstate coming from Canada at all. Granite, she could be from anywhere Laughing out loud

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Didn't realize 91 ended in Derby Line. I thought it went right to the border and then changed numbers. Granite, I lived on the other side of the state and have never been to Derby Line.

Generic's picture
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Derby Line / Stanstead / Rock Island  is probably one of the most interesting towns in all of North America. Buildings straddling the border that are in both countries. The water is Canadian, the reservoir is American and pumped by Canadians. 

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We used to joke around back when border security got tight that those poor folks in Derby Line would need a passport to use their own bathroom.

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