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What is the best refund policy for a small business that hosts events?

I am co-owner of a small business that hosts weekend get-aways at local hotels to scrapbookers. Every weekend that we host, we seem to have a customer who at the very last minute can't make it due to a family emergency, acute illness etc. We need advanced notice in order to cancel hotel rooms, meals etc. otherwise we lose the money (still need to pay the hotel/catering). We posted a refund policy, but have lost a customer over this issue. Since we are a new business, we currently don't have the financial cushion to support these incidents, but I am willing to hear suggestions from a 3rd party. Thanks for your time!
Tim Berry answered September 12, 2007
URL: http://www.entrepreneur.com/answer/221120
When I host events, I have a no refund policy as well. If you have to make the go/no go decision, then that should be implemented for your clients as well. There will always be reasons someone will say they can't come. If you have a very upfront "NO REFUNDS" policy, then the client accepts the risk if their schedule changes. Be consistent and be upfront.
Tim Berry is the chairman of Eugene, Ore.-Palo Alto Software, which produces business-planning software,
He founded Bplans.com and wrote The Plan-As-You-Go Business Plan, published by Entrepreneur Press. Berry is also a co-founder of HavePresence.com, a leader in a local angel-investment group and a judge of international business-plan competitions.