When Do You Require A Deposit?

Business By annakat444 Updated 14 Apr 2012 , 2:57am by Apti

annakat444 Posted 9 Apr 2012 , 8:34pm
post #1 of 19

Hi all! I'm a hobby baker and have been doing cakes about 8 months...so still a baby beginner but I'm starting to get a lot of orders! icon_smile.gif I'm working on getting my pricing straight, but another issue I've come up with is when should I require a deposit for a cake and when do I not? Thanks for your feedback! icon_biggrin.gif

18 replies
Dayti Posted 9 Apr 2012 , 8:38pm
post #2 of 19

I get one on every single order - 50% on order, 50% on delivery/pick up or 2 weeks before the event if it is a wedding or corporate order. The ONE time I didn't follow my own rules, it bit me in the butt and the customer didn't show up.

annakat444 Posted 9 Apr 2012 , 8:46pm
post #3 of 19

Thanks! Right now I'm only doing orders for family and friends, but people I don't know are starting to ask me to do cakes for them, so I need to be prepared!

jgifford Posted 9 Apr 2012 , 8:47pm
post #4 of 19

I agree with Dayti - - every order, every time. I require 50% up to $100, and the date is not reserved and it doesn't go on the calendar until I have it. Payment in full is always 2 weeks to 1 month in advance for a wedding cake, at pickup/delivery for everything else.

AZCouture Posted 9 Apr 2012 , 9:01pm
post #5 of 19

Half down to hold date, or entire amount at the time of booking if it's $200 or less.

Stephy42088 Posted 9 Apr 2012 , 10:42pm
post #6 of 19

I don't require it on orders less than $100. a lot of my orders are smaller, no consult, no tasting kind of thing. but when people come in for a tasting and consult or order a larger amount then I require a 25% deposit

AZCouture Posted 9 Apr 2012 , 10:46pm
post #7 of 19

I'm alaways curious about not requiring full payment ahead of time. My minimum order is $150, but if I did do a cake for $100, it would still have some serious time involved, let alone the good ingredients. What would you ever do if you showed up somewhere with the cake....and they never answered the door, or they never came to get it because they never paid you and just bought a sheet cake somewhere?

jason_kraft Posted 9 Apr 2012 , 11:06pm
post #8 of 19

We only require deposits on orders greater than $150. The vast majority of our orders are small party cakes, and in four years of operation with 700+ orders we have only had one customer fail to show up, and we were able to resell that cake to another customer within a week.

AZCouture Posted 9 Apr 2012 , 11:07pm
post #9 of 19

Yeah, I've seen your reply along these lines, but for people who don't stick them in a freezer or scrape words off, what then? I'm talking real customization that wouldn't ever be appropriate for another person?

jason_kraft Posted 9 Apr 2012 , 11:10pm
post #10 of 19
Quote:
Originally Posted by AZCouture

Yeah, I've seen your reply along these lines, but for people who don't stick them in a freezer or scrape words off, what then? I'm talking real customization that wouldn't ever be appropriate for another person?



We have never had an order under $150 that required customization so significant it could not be repurposed relatively easily.

AZCouture Posted 9 Apr 2012 , 11:12pm
post #11 of 19

Sounds good, but I'm sure there are people who do put customizing in that can't be repurposed. That's what I'm wondering about.

jason_kraft Posted 9 Apr 2012 , 11:22pm
post #12 of 19

It's not really a hard and fast rule, there is room for flexibility and handling deposits on a case by case basis if necessary. For example if we had gotten an order for an 8" cake with an elaborate personalized fondant figurine that happened to be priced at, say, $120, I would probably require a deposit for that order.

And if that customer who didn't show up decided to order from us again, we would require full payment of their previous order plus the full amount of their new order up front, regardless of how much the new order was.

Multi-tier cakes even without customization would be tough to resell, but the smallest multi-tier cake we offer (8/6 round) starts at $180.

KoryAK Posted 10 Apr 2012 , 12:03am
post #13 of 19

I have an open shop. We don't require a deposit for smaller (say under $150) orders of the items that we STOCK (like our 2 8" cake flavors, cupcakes, cookies, etc...). Anything that is a custom order, needs at least a 50% deposit to place the order and the rest can be paid on pickup. Wedding cakes are an exception, it's a 30% deposit and remainder due one month before due date.

costumeczar Posted 10 Apr 2012 , 12:15am
post #14 of 19

I require a $100 deposit for everything, and payment in full three weeks in advance. If people have an order that's close to the $100 they usually pay it all at once, but some don't.

QTCakes1 Posted 10 Apr 2012 , 1:39am
post #15 of 19

There is NO cake I have EVER done that could be sold to another person, ever. That is why it's called a CUSTOM cake. It has been made for ONE person, specialized just for them. I am NOT Wal-Mart, nor do I mass produce, and that is why I have a 50% deposit 30 days out to hold date. Any cake ordered within 2 weeks or less, paid in full.

rosech Posted 10 Apr 2012 , 11:33am
post #16 of 19

I learnt my lesson when I did lightning mcqueen cake. After researching and finding tutorials on sculpting AND sculpting the cake, customer calls to say she was going for a funeral. Was going to talk to me when back. I called her that weekend and she said following week. That was it. Added Mcqueen to my repertoire, and a few cms to my waist. Now I require 50% deposit for all cakes, except my workmates and a few regulars.

MimiFix Posted 10 Apr 2012 , 12:22pm
post #17 of 19

When I had a retail bakery, any order that could not be sold if the customer did not pick up, required a deposit. So if the customer ordered a birthday cake with a greeting, they put down a deposit. If a customer ordered a cake we always had in the display case, no deposit. (If they didn't pick up by a specified time, it was sold to another customer.)

Now that I have a home-based bakery again, all orders require a deposit. For whatever reason (and I've read them all on CC) if someone does not leave a deposit, they have nothing invested in picking up. I refuse to go through the angst that I see other home bakers post here.

LisaR64 Posted 14 Apr 2012 , 1:27am
post #18 of 19

I used to get a lot of last minute cancels due to non-pay, so I changed my policy to require a deposit at the time of order, and I haven't had a cancel or no-show since. Best thing I ever did for my own mental health icon_smile.gif

A deposit (even a small one) really separates the real customers from those that are just looking for the "experience" of ordering a custom cake, and gives them an incentive to finish paying because now they too have something to lose.

My work order clearly states whether or not the deposit is refundable, and the conditions (I require all cancels be made person-to-person - no text, email, voice mail, etc.).

I send one reminder for the balance, indicating it must be paid by XXXXXX, or the order will be canceled and the date released for other customer orders, and I follow through. Caking is stressful enough without the hassle of non-pays.

Apti Posted 14 Apr 2012 , 2:57am
post #19 of 19
Quote:
Originally Posted by LisaR64

...my policy to require a deposit at the time of order, and I haven't had a cancel or no-show.

A deposit (even a small one) really separates the real customers from those that are just looking for the "experience" of ordering a custom cake, and gives them an incentive to finish paying because now they too have something to lose.

My work order clearly states whether or not the deposit is refundable, and the conditions (I require all cancels be made person-to-person - no text, email, voice mail, etc.).

I send one reminder for the balance, indicating it must be paid by XXXXXX, or the order will be canceled and the date released for other customer orders, and I follow through.




The statements above by LisaR64 say it all. There is an old, old saying:
Start as you wish to continue.

I'd start by taking a deposit from anyone who is not a family member. Review Business Forum threads from Jan-today and you'll see lots of posts from bakers who have lost friends over an unpaid cake order. You'll see lots of posts from "new bakers" who carry on that "they have called the customer 22 times and sent 14 emails and 7 texts and they still won't get back to me.....Should I still bake the cake????"

Get a deposit. Have a contract. Treat it as a business.

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