Crafting a good cancellation policy can be a bit of a tightrope. Too strict, and you might scare customers off before they book. Too lax, and you leave your business open to disastrous last-second cancellations.
A well-crafted policy makes customers feel welcome and safe while protecting your tour and activities business from frivolous cancellations. It can also be part of your defense against chargebacks.
Laws governing cancellation policies aren't usually as complicated as those covering liability or privacy. Still, it's a good idea to be aware of any consumer protection regulations in your region and to know the requirements of your merchant agreement. A cancellation policy that doesn't meet legal requirements won't be much help in a dispute.
When in doubt, always consult a professional.
Keep it simple
Tours and activities get complicated. When you’re trying to manage group sizes, third-party providers, corporate and custom bookings, and availability, cancellations can be especially challenging to handle.
Just as booking software like Rezgo simplifies the administrative side of the cancellation process, a good policy keeps it simple for your customers.
Straightforward terms: The more conditions your policy includes, the less accessible it will be for your customers. Earn their trust by sticking to only what’s necessary. Do you really need four date windows with different refunds for each, or a 20 point list of exceptions? Or will they just cause administrative nightmares?
Plain language: The average American adult reads at a 7th to 8th grade level. Some consumer contracts read at a 17th grade level. Avoid that kind of mismatch by using clear, direct language in your policy. How do you do that? With short sentences, simple words, frequent paragraph breaks, and as little legalese as possible.
Easy requirements: In an ideal word, cancellations could be safely managed over the phone. While many companies do allow this, it’s risky — undocumented cancellations lead to disputes. At the same time, customers will turn to chargebacks when there are too many hoops to jump through to cancel. If you can offer a selection of simple cancellation options like email, fax and post, they’re more likely to follow your procedures.
Consider alternatives
Cancellations don’t need to be a cause for stress and strife between you and your customers. Want to keep your customers happy while protecting yourself? Consider refund protection.
Customers have traditionally had to seek out refund protection policies on their own. Rezgo clients can offer refund protection directly to their customers during checkout. That way, if a customer cancels too late or doesn’t show up, you won’t have to worry — they can take their refund request directly to the insurance provider and leave you out of it.
Tour and activity providers who offer trip protection are also free to make their cancellation policies a little stricter, knowing their customers have convenient alternatives available.
Work out the details
Whether or not you offer ticket protection, you need a cancellation policy that works for you and your customers. Any cancellation policy should answer these three questions:
- How long is the refund window?
- How can a customer reach you to cancel?
- What happens when you cancel a tour or activity?
For example, you may need a 48 or 72 hour cutoff for cancellations, after which point customers can no longer get a refund. Alternately, you might ask for a reasonable cancellation fee of 10% or 20% within the last week before the event.
How do you choose the perfect cutoff and fee structure? A 2011 study found that while specific fee rates had minimal impact on booking behavior, strict cancellation deadlines (higher than 24 hours) were more likely to encourage guests to shop around. With that in mind, a later cutoff may benefit you more than a lower fee.
You also need to clarify what happens when you cancel. Emergencies come up, so it’s bound to happen eventually. Let customers know how they’ll be notified and refunded if the event gets cancelled so they can relax. If your events are weather-dependent, make that clear in your policy, too.
Remember, customers who cancel may still be future guests. The more generous you can be with the terms of your cancellation policy, the more likely they are to return.
Make it official
Once you have the details of your policy hammered out, there’s only one thing left to do: publish it. Your policy shouldn’t be tucked away somewhere for a rainy day — it needs to get out into the world. A published, easy-to-find cancellation policy is an important part of your defense against chargebacks, too.
With a simple, fair cancellation policy, ticket protection, and a bit of consideration, your customers can book with confidence — and you’ll be ready to protect yourself when disputes arise.
Written By | Nissa Campbell
