Whether you run a DJ business, photo booth business, photography, catering, or any business that provides services for public and private events, chances are, you’ve had to create and change your deposit policy. As a veteran in the mobile DJ business, I’ve often struggled with finding the right deposit amount to charge and creating a policy that works best for our company and our clients. Many companies will charge a percentage of the total amount, such as 10%, 20% and I’ve often seen 50%. In my opinion, the deposit amount doesn’t matter as much as your actual deposit policy.
We only charge a $100 non-refundable deposit to book with us. Why? Well, first, it’s affordable. If someone is spending $2,000 with us, it’s not always easy for them to put down $1,000. Many will argue that well, they’re planning a wedding and it’s not cheap. While this is true, it doesn’t mean you have to charge high deposit rates. We operate our business from a client-centered approach. I’d be okay with losing $100 if I had to cancel my event, but I would not be okay with losing $1,000. We’re booked enough that if we get a cancellation, it is completely okay. We’re also okay keeping that $100 and we’ve never had a client get upset, losing that $100 deposit. (we’ve only had about 2 cancellations in the last few years).
Second, our overall deposit and payment policy is what matters the most. We also allow our clients to make payments towards their balance and if for some reason they cancel, we give them two options. Option one is that they lose their $100 deposit altogether (all non-deposit payments are fully refundable). Option two is that we hold their deposit on file for 12 months. They can reschedule an event with us, or even use that deposit for a friend or family member who schedules an event with us. This is fair and again, we operate with the client’s best interest in mind. If you operate with only your best interest in mind, there will be problems. (Such as the former United Airlines policy that they kick off customers, to give employees priority. We all saw that video, last week and we know how many millions they lost that day).
Overall, you should create the deposit policy that works best for your situation. My advice is to find a balance that works for you and is also good for your clients!
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