Importance Of A Contract

Business By vdrsolo Updated 11 May 2008 , 7:16pm by jenncowin

vdrsolo Posted 30 Apr 2008 , 7:34pm
post #1 of 19

I had a bride book last November for a May 31 wedding. Final payment was due today.

She signed the contract, and I require a nonrefundable 25% retainer fee (towards the cost of the cake) to retain the date.

Wedding got called off last night, and the dad called today wanting money back, they had actually payed most of it along the way.

Thank goodness for a contract, I am giving back the money EXCEPT for the retainer fee.

(Just wish he would have waited to call tomorrow, because after the final payment date I have in my contract that it is cancelled and all previous monies are retained).

Too bad though, because I turned down tons of orders for that date!!

I'm curious though....how does everyone else do their wedding cancellation wording when previous payments (other than the retainer) have been made if they cancel before the final payment date?

18 replies
costumeczar Posted 30 Apr 2008 , 8:50pm
post #2 of 19

I have a $100 deposit that is non-refundable. I have an entire section on my contract that spells out refunds, and that and the fee for any damaged deposit items are the only things that I have listed as non-refundable. I also have one sentence in there that states that if the event is cancelled or rescheduled the client is resposnible for the cost of perishable items that have been purchased, in case someone cancels and I've already bought 10 pounds of butter and 5 dozen eggs for their cake!

I've seen contracts that say something along the lines of non-refundable fees covering the baker's inconvenience and cost of lost business that was turned down because the client's event was booked.

In reality, if someone cancels their wedding I tend to return the whole amount that they paid me, becasue I don't feel like I need to add insult to injury. It happens so infrequently, and they're usually so grateful, they send me more business than they would otherwise! My contract says that I don't have to do that, so I could keep the deposit it I wanted to, though.

vdrsolo Posted 1 May 2008 , 12:38am
post #3 of 19

Mine is 25% or the cake price only, not including any equipment deposit or delivery fees.

I actually feel good about keeping the retainer fee because I had so many other opportunities that I had to pass up. I already do have quite a bit of money invested in it but can use towards future orders. For example, one of the tiers was an 11" square....I bought 2 11" Fat Daddio's pans and an 11" SPS plate, but at least those can be used in the future.

costumeczar Posted 1 May 2008 , 4:00pm
post #4 of 19

If I had to buy special equipment I probably would have kept the deposit too. I also would have kept it if I'd already made a bunch of gumpaste or somthing else for the cake. Up until now, though, everyone has cancelled well in advance, so it hasn't been an issue.

I'm going to start another thread for cancellation horror stories, that should be interesting!

vdrsolo Posted 1 May 2008 , 5:28pm
post #5 of 19

I knew there was potential "red flags" when they broke up before their first scheduled consultation, then a week later she rescheduled. That was almost 6 months ago!

indydebi Posted 1 May 2008 , 10:23pm
post #6 of 19

My payment schedule:
20% due to put it on my schedule.
50% of the balance due 3 weeks prior to the event.
final balance due day of the event.

My Terms of Agreement states:
All payments are non-refundable.

I will refund for military deployment and death in immediate family.

I have refunded for weddings that were almost a year out (I have time to rebook the date).

vdrsolo Posted 2 May 2008 , 2:54am
post #7 of 19
Quote:
Originally Posted by indydebi

My payment schedule:
20% due to put it on my schedule.
50% of the balance due 3 weeks prior to the event.
final balance due day of the event.

My Terms of Agreement states:
All payments are non-refundable.

I will refund for military deployment and death in immediate family.

I have refunded for weddings that were almost a year out (I have time to rebook the date).




I have only had one check bounce so far, and it took 3 weeks for it to bounce, this is why I changed my policy to a month ahead. That way, if the check does bounce, I have in my contract that they have 48hrs after notification to pay me in full via cash or money order plus any bank fees I had from the check bouncing.

I have thought about adding something about making all payments non-refundable (my 25% retainer is already nonrefundable), but since I don't require the final balance to be paid until a month before I wasn't sure how I could word that.

indydebi Posted 2 May 2008 , 11:02am
post #8 of 19

One of the main reasons I get the last payment on day-of is to benefit my crew. I've noticed that when a bride pays me in advance, she rarely (never) brings a checkbook to the wedding just to write out a check for a tip for the crew. When I'm paid the day-of, my crew gets $50-$100 each for the night.

vdrsolo Posted 2 May 2008 , 1:49pm
post #9 of 19
Quote:
Originally Posted by indydebi

One of the main reasons I get the last payment on day-of is to benefit my crew. I've noticed that when a bride pays me in advance, she rarely (never) brings a checkbook to the wedding just to write out a check for a tip for the crew. When I'm paid the day-of, my crew gets $50-$100 each for the night.




Your situation is a little different since you do the catering as well, so I can see how it can work towards your advantage (or your crew's...)

Most of my wedding cakes are drop and run, the wedding party is normally at the wedding, so there is no one there to pay me, I like the thought of having it already paid for!

indydebi Posted 3 May 2008 , 1:53am
post #10 of 19
Quote:
Originally Posted by vdrsolo


Most of my wedding cakes are drop and run, the wedding party is normally at the wedding, so there is no one there to pay me, I like the thought of having it already paid for!




I dont' have many drop-n-runs, but I DO like them paid in advance for the same reason. Most of them are, though, and the couple that weren't, they left an envelope for me on the cake table.

vdrsolo Posted 5 May 2008 , 2:24pm
post #11 of 19

I ran into the mother in law this weekend, she was telling me about how much money they lost out with other vendors, etc. I just listened.

Anyway, her last comment was......"I won't pay for anything until the wedding is over next time!!"

Good luck finding vendors!!


Here's what I'm thinking about adding to my contract.....

Right now there is a 25% nonrefundable retainer, this will not change.

If they make any more payments than that prior to my current final payment day (month prior to wedding), I was thinking about having a refund schedule.

For example.....if they paid $400 over the amount of the nonrefundable retainer...

If the wedding is cancelled 90 days prior to wedding, they get 75% back ($300)
If 60 days prior to wedding, 50% back ($200)
If 30 days....25% back ($100)
If less than 30 days....nothing back.

Does that sound confusing??

Of course.....if they are smart, they just don't pay the remainder until the final payment due date.

JenniferMI Posted 5 May 2008 , 7:24pm
post #12 of 19

I get a 200.00 retainer (yes, no little amount here). They need to understand that if they cancel, I not only lose the balance of their cake, I've lost the business I've turned down for that date. I think people make a big mistake when they take a tiny retainer. Business is business. And once I have the retainer, it is not refundable - period. If you say well, 6 months out you can get it back..... how are you going to know if you won't turn down another wedding that far out?

My .02 icon_smile.gif

Jen icon_smile.gif

ShopGrl1128 Posted 5 May 2008 , 9:57pm
post #13 of 19

As of today, this is my cancellation policy:
I request the full payment at least 30 days before the event.


Should you cancel your cake order before or after payments have been made, the $50.00 deposit to hold your date is non-refundable.
Should you cancel your cake order after payment has been made, you will be refunded your money as follows:
90% of the payment will be returned if canceled 45 days or more before the event.
75% of the payments will be returned if canceled 30-44 days before the event.
50% will be returned if canceled 29 days or less prior to event.

vdrsolo Posted 6 May 2008 , 2:50am
post #14 of 19
Quote:
Originally Posted by JenniferMI

I get a 200.00 retainer (yes, no little amount here). They need to understand that if they cancel, I not only lose the balance of their cake, I've lost the business I've turned down for that date. I think people make a big mistake when they take a tiny retainer. Business is business. And once I have the retainer, it is not refundable - period. If you say well, 6 months out you can get it back..... how are you going to know if you won't turn down another wedding that far out?

My .02 icon_smile.gif

Jen icon_smile.gif




That's not a bad idea to have a fixed retainer fee. I may have to change my policy.

This was a $600 cake so I got to keep $150, so it could have been worse, especially since I had to turn down other orders. I had one bride begging me to do her cake but I couldn't....so I sent her to another baker. Usually brides book with me at least 6 months in advance, so even putting a partial refund at 90 days would be cutting it close, most brides book way before then.

indydebi Posted 11 May 2008 , 6:43pm
post #15 of 19

On the FAQ page of my website, I address "Why are deposits non-refundable?" Feel free to use any of this info when talking to brides. Many think it's just a way to keep their money .... they don't understand the business side of turning away other bookings based on their prior committment.

Cakebelle Posted 11 May 2008 , 6:53pm
post #16 of 19

Thanks so much for all this helpful info. I guess I'll have to make some changes on my contract too!

Vicky.

FromScratch Posted 11 May 2008 , 7:04pm
post #17 of 19

I have a 50% of your total cost retainer for wedding cakes The balance is due 30 days before your event date.. if you cancel within 8 weeks of your date you will get 50% of your retainer. If you have a last minute order it must be paid in full to book your date and no monies are refundable.

Tellis12 Posted 11 May 2008 , 7:15pm
post #18 of 19

I think that taking deposits for for a large order (over $100) makes total sense and if I get orders like that, I certainly will!

However, I'm just trying to get my business off the ground and I'm wondering if I should take deposits and have contracts for cakes that are $40 or less, which is what most of my orders thus far are. Does it make people nervous to have to do that? What d you recommend?

jenncowin Posted 11 May 2008 , 7:16pm
post #19 of 19

At the shop I work at, we require a $50 deposit to hold the date. That money also covers the equipment "rental". Full payment of cake is due 1-2 weeks prior to wedding. If we don't have it paid in full prior to delivery date, they don't get a cake. If the wedding is cancelled because they got in a fight and broke up, we keep deposit, any other money paid in is refundable. They get the $50 back when our equipment is returned. If something is missing, broke, etc. we keep a portion, if it's not brought back, we keep it all. I know that this sounds like a very small deposit amount compared to what some places charge, but it's worked for this shop for 35 years. We get a lot of "you did my moms cake(s)". It makes my boss feel old, but it's also a nice compliment because the reputation is there.

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