Vagaro provides you with a means of protecting your time, money, and other valuable resources by empowering you to require a deposit or credit card at the time of booking. While this is just one of the capabilities of our Online Shopping Cart feature, requiring deposits is a key ingredient to your business’s success. Ultimately, deciding whether to require deposits or a credit card upon booking depends on your business strategy. In this article, however, we'll explore why opting for deposits over a credit card on file may be more beneficial for you as a business owner.
Deposits Show an Upfront Commitment
Above all, deposits serve as a monetary commitment from your client—collateral of sorts, if you will—indicating their serious intent to engage with your business. A deposit, at its core, is a contract. This is especially important in industries where resources or services are reserved in advance, like a red-light therapy room at your spa, for example. Deposits ensure that you're paid for your time, even if your client doesn't make their booking. Something like that could not only hinder your day-to-day business operations, but also lead to a potentially unhappy client, bringing us to the next advantage of deposits…
Deposits Are Preferred By (Most) Clients
Some customers may be uncomfortable providing their credit card information due to privacy concerns or past experiences. Requesting a deposit allows your clients to make a payment without storing sensitive financial details, which respects their privacy and eliminates any apprehension about saving card information. Deposits aren’t just a more risk-free option for your clients, they can help protect you, too! Here’s how...
Deposits Reduce the Risk of Chargebacks
Deposits help mitigate the risk of chargebacks, instances where the client tries to dispute the charge with their bank. As a business owner, you benefit from the fact that deposits are agreed upon as non-refundable and established in advance. By taking a portion (or all—the preference is yours!) of the payment upfront, you face less of a financial consequence should your client not follow through with their service or try to file a chargeback against your business.
Important:
If you only require a credit card upon booking, you face the risk of clients freezing or cancelling their card prior to receiving their service. That card on file may not have funds available when you try to charge it either.
This shows how advantageous the upfront commitment of deposits is.
While requiring deposits instead of keeping a credit card on file can be a strategic decision for your business, the choice depends on the nature of your business, customer relationships, and other industry practices, but hopefully this information helps you decide.
If you’re a beauty, wellness, or fitness professional and are tired of software that can’t flex, scale, or grow with your business, try a complimentary 30-day trial with Vagaro, the software that backs your success at every step!