Booksmith › Guides › Deposits
A practical guide for UK service businesses
Deposits are the single most effective no-show cure available to a small business, and the most misunderstood. This guide covers what UK consumer law expects, how much to charge, the wording that makes a policy stick, and a template you can copy tonight. It's practical guidance from running booking systems, not legal advice; for disputes, speak to a solicitor or Trading Standards.
You can take deposits, you can keep them when a customer no-shows or cancels late, and the law mostly asks two things of you: say the terms clearly BEFORE the customer commits, and keep the amount proportionate to what the slot actually cost you. Blanket "all deposits non-refundable in all circumstances" wording is where businesses come unstuck, because consumer-rights rules treat unfair or disproportionate terms as unenforceable.
Common practice across salons, studios and trades is 20–50% of the service price, with a floor that makes it meaningful (a £5 deposit deters nobody). The longer the slot and the harder it is to refill, the higher the justified percentage: a two-hour tattoo sitting or a full set with art warrants far more protection than a fifteen-minute trim. Charge what the empty slot would genuinely cost you, and you'll also be in the right shape if the term is ever challenged.
When the customer no-shows or cancels inside a clearly communicated window, and the deposit reasonably reflects your loss. If you resell the slot, fairness (and goodwill) suggests offering to transfer the deposit to a rebooking. If YOU cancel, the deposit goes back, always, and saying so in your policy is exactly what makes the rest of it credible.
Three ingredients: the amount, the cancellation window, and what happens on each side. State them where the customer books, not buried in a page nobody reads. A term the customer never saw before paying is the definition of one that won't hold up.
"A deposit of [£X / X%] secures your appointment and comes off your bill on the day. Need to change it? Move or cancel up to [24/48] hours ahead and the deposit transfers to your new time, or is refunded if you'd rather. Cancel later than that, or miss the appointment, and the deposit covers the reserved time. If we ever have to cancel on you, your deposit is refunded in full, immediately."
The trick is to let the system say it. When the deposit is a field in the booking flow, paid by card in the same minute as choosing the slot, nobody negotiates and nobody is singled out. That's how Booksmith handles it: per-service deposits through your own Stripe account, the policy shown at booking, the money settling to you. Businesses that switch on deposits for their no-show-prone services typically watch the problem disappear within a fortnight, because the people who never intended to come stop booking.
A deposit is paid up front and needs no chasing; a cancellation fee is an invoice a no-show will never pay. For small businesses the deposit wins on every axis that matters: cash first, argument never.