Who said running a business is easy? As a small business owner, you wear many hats — creator, customer service rep, marketer, admin… and let’s be honest, the business side isn’t always the fun part.
“Am I allowed to keep a customer’s deposit if they cancel their order or booking?”
It’s a really important topic, especially for those of us who take pre-orders or bookings for balloon décor, event styling, or equipment hire. So let’s take a clear and practical look at how deposits work — what’s fair, what’s legal, and how to protect your business and your customers.
What is a Deposit?
A deposit is a payment made by a customer to secure goods or services for a specific date. It’s usually a portion of the total cost, paid in advance, and acts as a commitment to go ahead with the order or booking.
Once your customer pays a deposit, they’ve entered into a contract with you — whether that’s verbal or (ideally!) in writing. That contract comes with legal rights and responsibilities for both parties.
What Should Your Contract Include?
Here’s what to clearly outline in your Terms and Conditions or booking form:
Deposit amount – either a flat rate or a percentage of the total price
When the deposit (and final balance) is due
Payment schedule – if you offer instalments
Full details of the product/service – including colour, size, materials, delivery/setup specifics
Date of delivery or event
Cancellation and refund policy – including if the deposit is refundable, partially refundable, or non-refundable
Any cancellation charges or fees
Your customer should be given a written copy of these terms (via email or hard copy) and a receipt confirming payment of the deposit.
Terms & Conditions / Booking Form Checklist (sample form)
Customer & Booking Details
Client Name: _______________________________________
Event Date: ______________________
Booking Reference/Job No.: ______________________
Deposit Details
☐ Fixed £__________ ☐ Percentage _______% of £__________ (total cost)
Date Deposit Due: __________________ Balance Due By: __________________
☐ Instalments ☐ Full balance upfront
Payment Details: _____________________________________________________
Product/Service Details
Description: _________________________________________________________
___________________________________________________________________
Colours/Materials/Setup: _______________________________________________
Delivery/Setup Time: __________________________________________________
Cancellation & Refund Policy
☐ Refundable ☐ Partially Refundable ☐ Non-Refundable
If non-refundable, reason: ____________________________________________
Cancellation Fees: __________________________________________________
Confirmation
☐ Client has received Terms and Conditions (email/hard copy)
☐ Client has received a deposit receipt
☐ Client agrees to the terms above
Client Signature: _______________________ Date: __________
Business Rep: _________________________ Date: __________
Is a Deposit Always Non-Refundable?
Not necessarily — and this is where many small business owners can get caught out.
Simply labelling a deposit as “non-refundable” isn’t enough. For it to truly be non-refundable, it must meet certain legal criteria. The Competition and Markets Authority (CMA) in the UK requires that terms must be fair, clear, and proportionate.
A business can retain a deposit only if:
The customer was made fully aware of the non-refundable policy before paying
The deposit amount is reasonable and reflects actual costs incurred or potential loss to the business
The cancellation happens in a way that genuinely causes your business a loss (e.g., too short notice to rebook the date)
Unfair terms — such as “all deposits are non-refundable in all circumstances” — can be challenged and may not be enforceable.
Real-World Example for Balloon Artists
Let’s say you quote £500 for an event, with a £150 non-refundable deposit due at the time of booking. Your Terms and Conditions clearly outline what the deposit covers: planning, admin time, pre-ordering stock, and reserving your time.
The client signs the T&Cs and pays the deposit. Then, two days before the event, they cancel.
You may be able to keep the deposit if:
Your Terms and Conditions were shared and agreed upon in advance
The deposit amount fairly reflects the costs/losses incurred
You can no longer rebook the date or reuse materials
What you can’t do is treat the deposit as a penalty or use it to claim excessive costs you didn’t actually incur.
Top Tips for UK-Based Small Businesses
Always provide written Terms and Conditions
Use clear, simple language and make sure clients tick a box or sign to say they’ve read and agreed.Be transparent at the time of booking
Talk customers through the key points. Don’t bury important info in fine print.Make your deposit policy proportional
Don’t charge a £200 deposit on a £300 job unless you can justify it with actual upfront costs or loss of business if cancelled.Put everything in writing
Emails count — but a proper booking form or contract is better.Avoid blanket “non-refundable” wording
Instead, explain why the deposit is non-refundable (e.g., time, resources, stock ordered).Consult a professional
If you’re unsure, speak to a legal advisor or trade body (like BAPIA) to check your contract wording is up to date and compliant.Keep records
Always document correspondence, signed T&Cs, and any costs incurred so you have a clear record in case of disputes.
In Summary
Taking deposits is a smart and standard practice for balloon professionals and party businesses. But to protect yourself — and avoid falling foul of UK consumer law — you must be clear, fair, and consistent in how you handle them.
If in doubt, get advice. Your terms should be specific to your business, your services, and your market. You’ve worked hard to build your business — it’s okay to protect it, so long as you do it fairly.
Happy Ballooning!
Sue|
Follow me @suebowler
To find out more about BAPIA visit www.BAPIAonline.com
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