Charge no-show fees and keep customer deposits

These rules apply across the UK. They protect consumers, meaning individuals who book for themselves. A company that books a treatment day for its staff is outside them.

A deposit, a cancellation fee and a no-show fee are all terms in a consumer contract. So is a "no-show fee" sign on your wall. Part 2 of the Consumer Rights Act 2015 tests each of them for fairness. No law sets a percentage or a fixed amount.

Set a deposit or fee that is fair

A deposit or fee is more likely to be fair when:

• the customer sees the term before they book
• the circumstances in which you keep a deposit are clear and narrow, so you have no wide discretion
• the amount reflects what you actually lose, after you try to re-book the slot
• the customer can avoid it by cancelling in time

Work out your loss before you set the amount. Take the income from the slot, subtract the costs you save, then subtract what you recover by re-booking it. Keep the working so you can show it.

A deposit you keep in full will not normally be more than a small percentage of the price. A larger prepayment is more likely to be unfair, because it can amount to a disguised penalty.

These terms are likely to be unfair:

• a fixed sum for any breach, however small your loss
• a deposit kept and a fee charged for the same lost slot, which compensates you twice
• a deposit that is non-refundable whatever the reason
• wording that leaves the amount to your discretion

A term that states a sum representing a genuine pre-estimate of your loss is more likely to be fair. A sliding scale, with a higher charge the later the customer cancels, can also be fair if no stage is punitive and the scale is easy to see.

A charge triggered by the customer breaking the booking terms can also be struck down as a penalty. The rule applies in England, Wales and Scotland. The test is whether the charge is out of all proportion to your legitimate interest in the booking being honoured. A pre-estimate of loss is not the test.

A charge can pass the penalty rule and still be unfair under the Consumer Rights Act 2015, so it must meet both tests.

If you cancel the appointment

When you cancel for your own reasons, refund the deposit in full, even if your terms call it non-refundable.

Tell customers before they book

Show your deposit and cancellation terms at the earliest opportunity: on the booking page, in the confirmation message and on any sign in your premises. State the exact circumstances in which a deposit is not refunded. Ask the customer to agree the terms before they confirm the booking.

Since 6 April 2025, leaving out a cancellation fee, or burying it where the customer is unlikely to see it, can be a misleading omission under the Digital Markets, Competition and Consumers Act 2024.

Online and phone bookings

A salon, restaurant or hotel with an online booking system or a regular phone booking service sells at a distance. The customer can cancel without giving a reason until the cancellation period ends. You refund every payment, including the deposit, even if your terms call it non-refundable.

The period runs from the day of booking, not from the appointment. A customer who does not turn up has not cancelled.

Restaurant and hotel bookings for a fixed date are exempt. The exemption does not name hair, beauty or other personal care services, so allow for the right in your online and phone bookings.

Appointments inside the cancellation period

You must not start a service inside the cancellation period unless the customer has expressly asked you to. When an appointment falls inside the period, ask the customer to request the start and keep the request.

A customer who cancels after that request pays for what you have already done. A customer who cancels pays nothing for the service if you did not give the cancellation information or they did not make the request.

Take and keep card details

A card number taken to secure a booking is personal data. Collect only what you need, tell customers how you use it in your privacy notice, and delete it once the booking is complete and any fee is settled.

A card payment is authorised only if the customer has consented to it, so get their agreement to a later charge as part of your booking terms.

If you get it wrong

Where to get help

Business Companion is the free guidance on Trading Standards law for businesses in England, Scotland and Wales. For a view on your own terms, ask your local council's Trading Standards service.