Problem: Having begun the process of booking a date and time for a new client, you realize she hasn’t sent you the $50 retainer you requested for her event. When you give her a call to check in, she says that her previous face painter, who isn’t available this year, has never required a non-refundable retainer or deposit. It’s obvious to you that she feels this is a sufficient reason to not pay you a retainer, either.
You explain that face painters have different policies, and yours is that in order to save a date for a client, the retainer must be paid. Since no one has ever balked at your request for a retainer before, and virtually no one has ever called off on an event with you, you’re a little puzzled by her initial refusal to pay the $50, especially since it’s such a small amount compared to her event total.
As you probe deeper, you realize that the root of her hesitancy is that her plans are actually up in the air. What she really wants is for you to hold a date for her, but she doesn’t want to commit to that date herself and possibly lose the $50 if she changes her mind. What should you do?
Solution: If it’s your policy to take a retainer to hold a date, and you feel that the source of the client’s hesitancy is that she may change the date of her event, by all means get the retainer. Be pleasant, but be firm. If it’s your company policy, you don’t need to apologize for it or retract it. The whole point of having a retainer is to insure the client won’t leave you without work on a date that you reserved in good faith for her. But if you’re going to use a retainer, consider the purpose behind it, and make sure you also use a contract which is worded carefully to make this meaning clear.
Personally, I have refunded retainers on a couple of occasions, primarily because I valued my customers and I felt the situation was beyond their control and particularly unpleasant for them, like a death in the family or a broken arm for the birthday girl. There is a big difference, however, between choosing to return a booking fee to a good client and a client refusing to pay the retainer in the first place. From a business standpoint, keeping a retainer or booking fee is understandable because you’ve already put in time booking and preparing for the event, and if you’re very close to the date, you may not be able to book an event to take it’s place and so will incur a loss of income.
So what’s the difference between a retainer and a deposit? Not much, actually. A deposit is a payment in advance for services yet to be performed. The problem with a deposit, then, is if you don’t perform the services, you can’t legally take the payment, and it doesn’t matter whether you say it’s non-refundable or not. A retainer is similar to a deposit, although it carries with it the nuance that you are reserving your time for a client. Either way, if you’re not completely clear in your contract as to the purpose of your retainer/deposit, you may end up having to return it if the client presses you on it.
Some artists prefer to use the term “booking fee” rather than deposit or retainer. What makes this a better choice is that it implies the primary purpose of the fee is to pay for the time it takes to set up the event in advance. This includes time spent answering and sending emails, making phone calls, sending quotes, writing contracts, and creating and practicing themed designs to go with the event. Even if the event is canceled, you want some payment to cover the time which you spent preparing for it.
No matter what, it’s best to have a contract with clear language, since it’s a protection for you and the client. At the very least, it will help prevent misunderstanding if the client reads it carefully. Your contract should state not only how much of your fee is non-refundable, but why it’s non-refundable. What does that fee pay for? Also, it’s a good idea to have a clear liquidated damages statement in your contract. For a more in-depth explanation of liquidated damages and things to consider for your own contract, stop by this blog link. Think of liquidated damages as a fancy word for a sensible amount of money which will compensate you reasonably for any losses incurred from having set aside the date and time if the client chooses to cancel.
One final caveat. This blog post is meant to be food for thought so you can prepare for possible problems before they happen, but it is not meant to be legal advice or to take the place of legal advice. The best place to go for legal advice is your attorney, especially because laws are not the same from jurisdiction to jurisdiction. Of course, be as clear as possible in your contract about your retainer/deposit/booking fee and what it covers, but if you’re uncertain of what language to use or what the law is in your area is concerning the refunding of fees, ask your attorney.
Beth MacKinney is the owner of and primary face painter for Face Paint Pizzazz in the NW Chicago suburbs. Stop by Clownantics.com for more of her face painting tutorials, and if you’re on Facebook, join the Facepaint.com Challenge Group to showcase your artwork and have a chance to win a store credit for each week’s challenge theme.