How To Deal with Refunds
Refunding is one of the main causes of disputes between B&B owners and their guests. When it comes to refunds, there is one key point to remember – be clear on your policy!
It is crucial that every bed and breakfast owner makes their terms and conditions and policy on refunds as clear as possible. Legally, you cannot state in your terms and conditions that you do not issue refunds. But you can use clauses to protect you from guests making unfair claims and protect your business:
- Include a visible page on your website where your policy is laid out
- Include details of it on booking confirmation emails and discuss it over the phone with every phone booking
- It’s really important that a confirmation email with full terms and conditions is sent out for every booking, as this creates a legally binding contract which serves the interests of both you and your customer
- Keep all members of staff informed so everyone is comfortable taking action when confronted with a situation
Of course, no matter how clear your policies are, refund requests will still occasionally arise. These can generally be divided into two categories.
1. Issuing a refund on cancellation of a booking
Most B&Bs request a deposit from guests on booking. You might state that this is non-refundable, or you might allow a grace period during which time the guest can have this fully refunded if they decide to cancel. The important thing is to ensure that the customer is fully informed and that the refundable cancellation period is clearly defined, if there is one.
How strictly you choose to enforce these policies is up to you. If, for example, someone calls the day before they are due to arrive to say they have had a bereavement and need to cancel, you might decide to refund their deposit. If you don’t want to issue a full refund, you could offer one on the condition that you are able to re-let the room, or to bill them for this visit and offer a free stay at a later date.
Ultimately, it is your decision, so use your judgement to assess individual situations and decide whether or not to issue a refund. By cancelling their booking, this customer has broken their agreement with you and as a B&B owner you are not legally obligated to return the deposit.
2. Issuing a refund due to a complaint
In an ideal world, every customer would leave your bed and breakfast feeling satisfied with their experience and already planning their next visit. Unfortunately, there are occasions where this is not the case. If a customer confronts you saying they are unhappy with their stay and would like a refund, remember the 5 do’s of good customer service.
Remain calm, listen, discuss the issue with them and empathise. You might decide that you do owe them something, but not a full refund. Perhaps they were happy with the room, but felt the food was disappointing. In this case, you could offer them a voucher offering money off a future stay, or a night’s free stay during a quiet period.
If their request is entirely unreasonable, things can get tricky. You may have the right to refuse any compensation, but taking such a hard line can have consequences. With online review sites increasing in popularity, it is vital to have as many happy customers as you can. But remember, you can’t please everyone all of the time.
Booking agencies
If you receive bookings via a third party booking agency, you should ensure that their website and booking confirmation directs the guests to your cancellation and refunds policy. This is important because, if a situation arises, the booking agency will refer the customer straight to you. Their terms and conditions usually free them of any responsibility from refunds or cancellations once a booking has been made.
So, when it comes to refunds, having a clear cut policy really can help. It is easier to refuse a refund when you know that you are sticking to a policy that your guests were made aware of at the time of booking. Just remember that customer service is key, so remain courteous and professional at all times. An amicable solution is the best result for both parties. If it ends badly, you can wave goodbye to not only their repeat custom, but any possibility of a good online review or recommendation, both of which are important in attracting future bookings.
Cover image @BenHussman
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Category: B&B Management
You should also be aware that many 3rd party sites consider a cancellation of 1 night ie 3 nights becomes 2 a modification and not a cancellation – therefore be very carfull in how you word your policies.