Wedding Industry Professionals | The Consumer Protection Act
A few weeks ago, one of our colleagues (a wedding photographer) faced the situation that we all dread – a cancellation. Unfortunately, she and the client did not see eye to eye, and said client reached out to Wendy Knowler on East Coast Radio to vent. Luckily, the name of our photographer friend was not mentioned as a few of the facts given were incorrect. However, the conversation began a massive debate among the wedding industry and had us all sweating at the thought that our contracts might well be outdated and not CPA compliant.
The big topic of debate was: Can you charge a non-refundable deposit?
We reached out to attorney Lee Swales from Thomson Wilks Inc. and arranged a presentation to educate our local wedding service providers of their rights and the rights of the consumer as per the Consumer Protection Act (CPA). You can purchase the video of Lee’s presentation HERE at a cost of R150.
The short answer, is no – no you can’t charge a non refundable deposit. But what you can do is charge a cancelation fee that is reasonable and can be justified. In your contract you will need to offer a cancelation clause and guideline of how you are going to determine what you keep. You are entitled to retain some of the deposit, but you MUST be able to objectively justify that cost. For example, a wedding planner may have began the research into a wedding and spent 10 hours researching and meeting with the client and various service providers. A few weeks in, the client decides to sack this wedding planner and demands a full refund. Provided that the planner has a cancellation clause which details how and why they are charging this cancelation fee…she may retain some of that deposit to cover the cost of the work she has already done.
This amount is subjective, but must be reasonable. She must be able to quote her hourly rate and know why she charges this (experience, expertise, costs incurred etc)
Lee explains to us that the golden thread running through the CPA, is that we need a consumer market that is FAIR and REASONABLE. Reasonable seems to be the key word in the CPA.
So what is reasonable?
Weeelllll…there is no standard on what is reasonable in our market, so what is reasonable is entirely up to you. Wendy Knowler mentioned in her article that the photographer withheld an entire deposit while the caterer and the venue refunded in full. I spoke with the venue co-ordinator, and they were able to fill the weekend with another booking, whereas the photographer wasn’t. In that instance, it would be reasonable to refund in full as the CPA states that you cannot benefit from a cancellation, and keeping a deposit AND taking on a new client would result in you earning twice the money. Our dear photographer, however, was left with an open weekend. Presuming she shoots all 4 weekends in a month, that is 25% of her monthly salary…that’s a huge loss!
According to the Consumer Goods and Services Ombudsman In SA, 190 000 marriages happen a year. Of those, between 10-15% are going to be cancelled. If you do 12-15 weddings a year, the stats suggest that you will face 1 cancellation a year. I personally faced 3 last year. 3!!! And because I had an outdated contract which was not CPA compliant I lost roughly R30 000 as a result. This impacted my business hugely. Don’t allow yourself to be in the same position.
We strongly advise against downloading a generic contract from the internet. If you find yourself in a dispute, you may regret not having invested a little money into protecting yourself legally. Through our online store you are able to purchase a Wedding Supplier Agreement which Lee will customise to your business. After making the purchase, you will receive a confirmation email with a link to download a Q&A sheet. Once you have supplied us with very specific information about your business, Lee will draw up a contract and you will have that in your inbox and ready to send to clients within 10 working days.
If you have any questions, please feel free to leave them in the comments below and we will do what we can to answer them.