The deposit is to reserve the date and time and is non-refundable. Simple.

If the magician cancels, the client gets the money back.

If the client cancels, they don't?

:)

Tom

That depends on whats in the contract. What your phone script is doesn't have to articulate every point, but at least get the main idea across.

Great point Tom!

Taking deposits is a perfectly acceptable way of doing business. My no deposit policy is a way to run my business differently. A way to inject my personality into the way I run my business. Not only do I not accept deposits, I will not accept any payment until AFTER the show and only if the customer is completely satisfied. A strategy of, "I trust you, you trust me" Or, "Treat the customer the way you would like to be treated" (And I would like to be trusted).

By the way, I did not learn this strategy from any guru or any business model. This is me! My personality, the way I want to run my business. Admittedly, its not for everyone. But I assure you, it is successful. My cancellation rate is extremely small and have never had a even a close call in being paid.

Let me leave you with this thought: A customer calls you the day before a show and says my child is sick and I have to cancel my party. Keeping in my the Golden Rule (which is what the successful company JCPenney was based on) which is a wiser response:

1. Too bad, I do this for a living and run my business efficiently. You lose your deposit.
2. No problem, I'll send your deposit right back to you and we'll get together another time.

Of course #2 is the answer.

So, my question is, if the smart businessman is going to refund the deposit anyway, why go through all the trouble of demanding the deposit, etc. if you're just going to send it back anyway?

Why do magicians feel the need to explain reasons for business practices? Deposits are taken or your date is not booked.

Is this your opinion or is it an absolute truth?

I require a deposit and a contract for my bday shows and other types of private shows including corporate. It's just $50 to confirm their date and time. For retirement communities and government (schools) I don't require the deposit, but I do require the contract. I never have an issue with this. People view this as normal and will sometimes even ask me how much of a deposit I need before I ever mention it.

I've always taken deposits on everything. PayPal is a great convenient option. They can use credit cards if they like...and they are protected as buyers in the event of anything going wrong with the booking. I get a portion of my money upfront...and often the balance payment with or without a tip comes in PayPal also.

I HAVE offered a 5% discount to clients who pay the full amount upfront...but I don't do this as a rule.

And yes...I've lost a few bookings because I ask for deposits. But I'm not losing any sleep over it. At least I know my time will be covered.

David

I would never send a contract without going over the terms first. After the client is sold on the show, I will say something like, "Great! I will send you a written conformation with all the details we discussed. Please check it for accuracy, then sign and return a copy. Also, I ask for a 50% deposit to secure the date, with the balance payable at the event. Is that acceptable?"

If they have any concerns about the deposit, that's when I want to deal with them. If necessary, I'll explain what happens if either party has to cancel, and try to reassure them. I sometimes soften my cancellation policy to avoid losing the deal over the deposit. If there is still a problem - for example, some organizations simply have a policy not to pay a deposit - I decide on the spot if I am comfortable accepting their terms, and sometimes will waive the deposit. It's all part of the negotiation.

Jim

All right, I have to admit this is an ongoing issue for me, and I'm not sure I'm gonna come up with a perfect, fits-all answer, but thanks to all who have weighed in and offered their thoughts.

Case by case works as well. But having a policy structure to fall back on is a good idea.

For me, this post sumarizes how I would like to procede with this important subject. The reason I really like it, is because it allows me to have a policy that appears to be professional and in line with client expectations, yet it keeps me in control of the negotiotiation process when negotiation becomes necessary. Thanks Jim for sharing your thoughts.

Yeah I never require a deposit for private events - except for weddings as that seems to be the norm for that market.

True, asking for a deposit can be annoying to your client, but for me, a 50% deposit is def. required for a higher paying corp. gig / college gig - most of the time they ask if I require a deposit before I even bring it up. If the event is a last minute (within 14 biz days, sometimes it takes payroll that long to cut a check), I'll just change my deposit to a cancellation fee (client will have to pay 50% of the fee as a deposit for future events)

Side note, I never ask for deposit if it is a repeat client.
I want to make it as painless of a process it is for my fans

I guess I take you're thinking a step further. I want to make it as painless of a process for all of my FUTURE fans too.

I am with Ken. For the markets he works it is hardly necessary and really isn't worth the bother. It could even be detrimental. I do think there is a far stronger case for deposits in the higher paid shows but even here I rarely bother. I take deposits at busy times of the year such as Christmas when a cancellation could be costly because you have turned down other bookings and I also take deposits if I do hypnosis shows for high schools. These shows are often booked by the students themselves who are notoriously unreliable and will change the date or even cancel the show on a very frequent basis so the only way to avoid this problem is to take a deposit.

Apart from the exceptions above I don't find it worth the hassle. A contract or letter of agreement is enough. I find cancellations of shows so rare that I don't see the point. In the decades I have been working I don't think I can remember 5 cancellations at the most apart from the exceptions I stated above.

I too think a contract or letter of agreement is enough for smaller shows. Of course everyone can set their own company policies.

To me, a deposit shouldn't hint that it is ok to cancel an agreement. The agreement/contract is to be paid in 'Full.'

Much will depend on how the client views you and your business. If they identify you as a 'traveling salesman' or a part timer, then you can forget getting a deposit from most.

They think it's easier for you to find them, at their business or home, than it is for them to find you.

Tom