OMG!!!! So sorry you have to deal with this!! It's SOOO obvious that this poor cake has been through hell!! Look at the top tier... You can see where your crisp edge was flattened in a way too perfect manner... Perhaps when it fell over against the side of it's box??
It's bad enough when we make mistakes and have to eat humble pie and grovel to a customer. But to have a client outright lie and try to scam us... That makes my blood boil! I would send her a nicely worded email but would NOT offer a refund or coupon or credit or ANYTHING!!
Tell her no refund-she picked up the cake and she delivered it herself--when it left your place it was her responsibility to get to her party site in one piece--and she failed to do so...end of the discussion-is what I would say...from now on, have a written contract-that they are responsible of their own cake when they pick a cake up...also put that you ARE NOT responsible for anything etc.
Keep it short and sweet. She's not asking you for a refund of any kind right? Just letting you know she was "disappointed".
I would take a day to think about how you want to respond.
Good luck!
Dear XXXX,
I know you must be very disappointed about your cake, and its very unfortunate that this happened to your cake. However, I stand 110% behind my work, and I do not believe this is an incident of the cake caving in. If you look at the picture of the back of the cake you sent me, you can see that my cake supports are still very much intact. (I use SPS. You can find relevant information about this system here ____.) I'd also like to direct your attention to the back of the top tier where a fondant circle from the bottom tier has been placed. Around that fondant circle you can see a "smushing" of the cake's icing. I'm afraid that the only way the cake sustained this damage is from being dropped or smashed into. This damage is not due to my construction, and again I completely stand behind my work. I'm sorry this happened to your cake, but I must refer to Section ___ of my contract stating that once the cake leaves my kitchen, I cease all responsibility.
Sincerely,
XXXX
When a cake is dropped, it will often explode out......like this one did. 
Rae
It seems to me that you are clearly the victim here and not her. You have pictures to prove that too. Maybe question her and say you noticed all the supports are still upright and the cake lasted a whole night which means it was properly supported. Im not really sure how to approach the situation without blaming her though.
I completely agree with carmijok - I think the child dropped it while the mother had stepped away and did not say anything.
I'm just gonna put this out there Stace... my spandex Superhero costume finally came in. I had to have the neckline lowered a little for maximum cleavage, but it's ready... so if you need the Caked Crusader to step in and throw down with this lady... you know how to reach me. 
Love ya girl, don't let her shake your confidence!
Edited once for typo. 
I'm just gonna put this out there Stace... my spandex Superhero costume finally came in. I had to have the neckline lowered a little for maximum cleavage, but it's ready... so if you need the Caked Crusader to step in and throw down with this lady... you know how to reach me.
Love ya girl, don't let her shake your confidence!Edited once for typo.
LOL!!
That made my day! Do you have a "cake signal" that I can shine in the sky when I need you help?
I'm just gonna put this out there Stace... my spandex Superhero costume finally came in. I had to have the neckline lowered a little for maximum cleavage, but it's ready... so if you need the Caked Crusader to step in and throw down with this lady... you know how to reach me.
Love ya girl, don't let her shake your confidence!Edited once for typo.
Saving this for future reference.............
I have to add a slight dissenting opinion here, based on a question...Was the cake cold when it was handed over to them? If it was room temp it would be pretty easy to have it slide apart if it wasn't on a level surface.
Based on the angle of the cake in the back view photo and the lack of space between the edge of the bottom board and the bottom tier it looks like the whole thing slid, including the top tier. See the crack in the front view at the base of the top tier border? The entire top tier has slid backward, which would indicate that it was being held at an angle for a while. If the cake wasn't cold then it would have been soft, and the pressure would have forced the back part out, which is what it looks like the way that the pieces are falling away from the cake.
If this was me, and I had given the cake to someone without it being cold, and without telling them that it needed to be transported completely flat, I'd give them some kind of a refund. It does look like they mishandled it, but if they were told to put it flat then this might not have happened.
If the cake WAS cold when you gave it to them, then I don't know what to add, because a cold cake would have reduced the risk of sliding.
Also, you should probably use packing tape to attach the bottom tier to the cake board, not buttercream! It probably won't slide if it's taped.
The cake was not cold. but 95% of them aren't, as I've operated as a cottage foods bakery for a long time, and I couldn't sell potentially hazardous foods for years. I've been licensed for about 2 years, but still most people prefer the non-perishable stuff when they order. Which befuzzles me, 'cause I prefer the other. But oh, well....
The bottom tier was buttercreamed to a cardboard which was hot glued to the drum. The top tier's cardboard was hot glued to the SPS.
What kind of refund do you suppose is fair? I did not tell DH to tell them to put it flat. I always tell them, but neglected to inform him to do so.
For cake pick ups, I have the customer analyse and have them sign a paper that states how the condition of the cake was at time of pick up. Also provides a statement that we are not liable for damaged cakes that was not delivered by us.
Sorry about that, but it looks like someone hit the brakes too hard
If the entire cake slid backward on the cake board, wouldn't there be some damage to the bottom tier's border or at least some blue greasy mark on the cake board? (I'm speaking about the front view of the cake, the bottom border is still perfect in the after picture and the board is clean)
I think someone bumped the cake either on the dashboard or on the car door when they were either putting it in or taking it out.
I agree if the cake wasn't chilled that there's more chance of it crumbling if it's mishandled.
But, the SPS is still standing and even, so it wasn't a construction mistake.
Edit to add....if your contract states that once the cake leaves your home you're not responsible for any damage caused than I don't think you owe her anything. It's up to you if you want to give her back some sort of refund.
It's a tough call. I guess if you want her as a client than you could offer her something, if not, than don't.
What is the relationship with this client?
That made my day! Do you have a "cake signal" that I can shine in the sky when I need you help?
You know it honey! The Health Commisioner has a giant spotlight with a piece of gumpaste that was cut on a Cricut... ANY time you need me.
The cake was not cold. but 95% of them aren't, as I've operated as a cottage foods bakery for a long time, and I couldn't sell potentially hazardous foods for years. I've been licensed for about 2 years, but still most people prefer the non-perishable stuff when they order. Which befuzzles me, 'cause I prefer the other. But oh, well....
The bottom tier was buttercreamed to a cardboard which was hot glued to the drum. The top tier's cardboard was hot glued to the SPS.
What kind of refund do you suppose is fair? I did not tell DH to tell them to put it flat. I always tell them, but neglected to inform him to do so.
Telling them to hold it flat is a courtesy, but lack of doing it doesn't mean that a refund is owed. The bagger at the grocery store doesn't tell me to be careful with my eggs. At some point common sense has to kick in.
This isn't a case of my taking the side of the cake artist just because she's one of us. She sent off a perfectly executed, perfectly supported cake, and it was handled carelessly and destroyed by the customer. The customer knew there was a cake in the box, it's not like it was a mystery package. Even if I didn't know anything about cakes, I would have held it level. It was two tiers! It wasn't some sheet cake from Costco!
Dear Customer:
Thank you for sending the pictures of the damaged cake. I am as disappointed as you are in its condition! I use a support system that can only be described as "foolproof", and if you look at the photo you sent, you can even see it inside the cake, still upright and supporting the top tier as it should be. It is not possible for a cake using this support system to "cave in on itself". The photos clearly show that the cake is only damaged on one side, and even the top tier has damage on the same side. It looks like the cake was held at an angle, bumped hard, or dropped. If it had "caved in on itself", the top tier would not be damaged in the way it is, with a hard line that clearly shows it was laying against the side of the box.
I hope you were able to make the best of your event, and I would like to offer you 10% off a future order.
Best wishes,
Stacie
Just my thoughts. I would not be giving her any cash back.
Also, you should probably use packing tape to attach the bottom tier to the cake board, not buttercream! It probably won't slide if it's taped.
I didn't know you could use packing tape on cake, and I am not sure if I would want to risk cutting into it and eating it. (Just saying and totally not meant to sound rude-I am fairly new to the whole cake decorating world).
The cake was not cold. but 95% of them aren't, as I've operated as a cottage foods bakery for a long time, and I couldn't sell potentially hazardous foods for years. I've been licensed for about 2 years, but still most people prefer the non-perishable stuff when they order. Which befuzzles me, 'cause I prefer the other. But oh, well....
The bottom tier was buttercreamed to a cardboard which was hot glued to the drum. The top tier's cardboard was hot glued to the SPS.
What kind of refund do you suppose is fair? I did not tell DH to tell them to put it flat. I always tell them, but neglected to inform him to do so.
Oh, okay, it sounded like you had just used buttercream to attach the bottom board to the large cake board. If it was hot glued the board wasn't going to go anywhere.
I might email her back and say that based on the damage and the way that it fell apart, it looks like it was a problem with the way that it was transported, (which it was), but that since you forgot to tell your husband that it should be kept level you can give her some kind of a refund. Then ask her what she thinks is fair. That will put the ball back in her court and get her to make the first move as to how much she wants back.
Honestly, if it was me I'd probably just refund her the entire amount if it wasn't refrigerated enough to be firm and I hadn't told her how to transport it. When I let people pick up cakes I carry it out to the car for them and stand there until they get a flat place to put it in, then I put it in their car. I would know that it was mostly their fault, but if I didn't do those two things I'd know that it probably played a role in the problem. IT WOULD CHAP ME TO NO END, have no doubt, but it's a learning experience, boooooo.
I'd also consider putting her on the "no cake for you" list, based on her reaction to your offer for some kind of a refund. She could turn into the best customer you have to refer people to you, or she could be a heinous wench. When you see what her reaction is you'll have to be the judge of that.
Also, you should probably use packing tape to attach the bottom tier to the cake board, not buttercream! It probably won't slide if it's taped.
I didn't know you could use packing tape on cake, and I am not sure if I would want to risk cutting into it and eating it. (Just saying and totally not meant to sound rude-I am fairly new to the whole cake decorating world).
Not on the cake, the tape would be between the board that the cake was sitting on and the large cake drum. 
I have this drafted. Would you look it over before I send it? TIA.
Dear Client,
I am as disappointed as you are in the cakes condition. I use a support system that can only be described as foolproof, and if you look at the picture of the back of the cake, you can see that it is still standing, doing its job. If it had "caved in on itself", the top tier would not be damaged in the way it is, with a hard line that clearly shows it was laying against the side of the box. Incidentally, the large fondant circle with the fish on it was not placed on the top tier when it was decorated, so I'm unsure how that got up there?
Referring you back to our original contract, you initialed the section regarding pickup and delivery that states: "Any client who chooses to do so may pick up their own cake and set it up themselves. However, we are not responsible for anything that happens to the cake once the client takes possession. ________initials"
The damage is clearly transport damage. I am informed that the cake was transported in the lap of one of the vehicle's occupants, which is not quite a level, stable surface. However, as I am interested in my clients being happy with my services, and as my personnel did not specifically tell you not to transport it in an occupant's lap, I hope that you will share with me what you consider to be fair resolution to this matter.
Looking forward to hearing from you,
Sincerely
XXXX
XXX XXXXX Cakes
I'm sorry that happened to all of your hard work! It stinks that the guests didn't get to see it when it was perfect.
Ok. Thanks for all the input. I need to think this over and get back to her today. It is making me sick to my stomach, but I guess I can't ignore it!
I'll let you know what happens.
I am confused. You still sound torn over whether you are to blame here. It seems the cake sleuths here have determined this is not a construction issue.
I wholeheartedly agree with the grocery store bagger/carton of eggs analogy.
It's not your fault you didn't tell your hubby to pass on cake transport instructions. Even if you did tell him and HE forgot...still not your fault according to the majority opinion here. The cake left your kitchen in perfect condition after standing in your kitchen in perfect condition for hours.
She didn't ask for a refund. Are you worried about future business from her or her bad mouthing you to her circle of friends? 
I can understand that. Karma should find her though if she were to blame you for something you didn't cause!
Suggesting the kid had something to do with this is plausible.
I agree with write her a nice letter and give a synopsis of WHY you are suggesting it was a transportation/delivery issue. I highly doubt she expects a detailed analysis of those photos she took! IMO, that would show her that you are the professional and recognize where the problem is.
I'm sorry you are so worked up about this "confrontation" of sorts! I totally understand.
Write out what you want to say and run it by here. I'm sure you'll think of the right way to gently state where the fault lies. Good luck!
ETA: I see you wrote a letter while I was typing...I hope you get some feedback! 
I would leave out this part-
However, as I am interested in my clients being happy with my services, and as my personnel did not specifically tell you not to transport it in an occupant's lap, I hope that you will share with me what you consider to be fair resolution to this matter.
It implies that you did something wrong. I agree with Kelley, that common sense tells you that a cake is fragile. You need to decide what resolution you will give and offer it. If the cake is smashed from going into the dashboard, it could have been damaged even if it had been on the floor if the brakes were slammed hard enough.
Please do not let her suggest what the appropriate refund should be. She might interpret that since she wasn't told to keep it level then she should get a full refund. Absolutely NOT.
I would either offer a half dozen complimentary cake bites or cupcakes with her next order.
NO Stace!!
PLEASE do not ask her what she thinks is reasonable. Take out that whole section after "stable surface" and switch it to the polite equivalent of 'not my problem you miserable witch', and send the rest of the email. It is perfect. I had thought a small gesture like a coupon toward a future order was an ok idea, until I saw the carnage pix that she sent you, which CLEARLY show this was not your fault. (Don't make me send the Caked Crusader after YOU!!) <3
Edited for typos cuz I'm anal...
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