How to Set an Appointment Cancellation Policy: a Full Guide

When clients cancel at the last minute, it can mess up your schedule and end up costing you money. That’s why it’s essential to implement a fair appointment cancellation policy that will reduce cases of refund abuse and make your scheduling more accurate. In this article, we explore what an appointment cancellation policy is, how you can benefit from having one, and how to set up your policy to reduce no-shows.

What is an appointment cancellation policy?

An appointment cancellation policy informs your clients of rules for canceling appointments. These rules apply to clients who book an appointment with you and later want to cancel it for any number of reasons.

There are three appointment cancellation policy types:

Flexible Moderate Strict
  • Allows short-notice cancellations (up to 24 hours before the appointment start time)
  • Maximum cancellation fee is charged when the cancellation window ends
  • If the client books far ahead of time and cancels within three days of the appointment, you provide a full refund
  • If a booking is made close to the appointment date, you may apply stricter rules and charge maximum cancellation fee
  • A strict cancellation window (e.g. 24 hours after booking, or seven days in advance) with a full refund provided upon request
  • After the cancellation deadline, you don’t provide a refund

You can pick any type of cancellation policy depending on your business needs and the losses you suffer due to late cancellations. For example, if you need to start preparing to provide a service far in advance and then your client cancels your meeting, you should charge a cancellation fee that covers the cost of preparation.

Benefits of setting an appointment cancellation policy

Having a cancellation policy in place helps businesses maximize their resources and limit their financial losses. It also protects them from any last-minute no-shows. Let’s see how implementing an appointment cancellation policy can help you.

#1 Fewer client no-shows

The average no-show rate in the US varies across industries. For example, in primary care, depending on the patient’s age and prior no-show history, it’s reported to vary from 5.5% to 50%. Still, there is a general tendency for clients to skip a scheduled meeting when they aren’t aware of the cancellation rules. Providing the option to cancel an appointment and implementing a cancellation policy increases the chances that your clients will notify you of a cancellation instead of simply missing their appointment.

#2 Minimized losses

When your client cancels an appointment close to when it’s scheduled or misses an appointment, they might expect you to provide a refund if you haven’t explained the cancellation terms clearly in your appointment cancellation policy. This leads to monetary losses.

#3 Smarter scheduling

Fewer cancellations close to the appointment time allow you to rely on your schedule. You also have to fill in fewer gaps in your schedule if there are any cancellations at all.

#4 More efficient communication

You can provide your clients with clear explanations of when they can cancel an appointment and whether they are eligible for a refund when they cancel on short notice to reduce unnecessary communications regarding the cancellation process and rules.

#5 Flexibility & mutual respect

An appointment cancellation policy protects both your business’s and your clients’ interests. Following the policy shows mutual respect and consideration for unforeseen circumstances.

Is a 24-hour appointment cancellation policy effective for your type of business?

Most likely, you’ve seen a 24-hour cancellation policy used by many healthcare providers and consultants, and you may wonder if there is a certain cancellation window you are obliged to provide to your clients.

The truth is that you can create your policies, charge cancellation fees, and set service agreements as you wish, as long as they don’t violate the laws of your state and the FTC’s Cooling-Off Rule.

Typical cancellation windows for businesses vary between 24 to 72 hours. Though some businesses use a 24-hour appointment cancellation policy, that’s sometimes not applicable to a company’s business model due to weekends and same-day appointments.

Your appointment cancellation policy should consider that a client might cancel on the weekend and you won’t see that the client has canceled, causing you to experience a loss due to the cancellation even though technically you were notified in time.

On the other side, a strict cancellation policy should still grant your clients a cooling-off period — a specific timeframe within which they will have an opportunity to cancel an appointment if they decide they no longer need a meeting with you. Any no-show fee you apply should be fair and should cover actual losses your business suffers from the late cancellation.

What should you include in your appointment cancellation policy?

When you set up an appointment cancellation policy, naturally, you want to consider all possible cases that might arise when your client wants to cancel a meeting with you. This will help you reduce miscommunications. Most likely, you won’t be able to find a template that fits you perfectly, even though there are plenty of them — and that’s why it’s essential to put effort into creating a policy that works specifically for your business.

Check out the list below to find out what key points you should include in your appointment cancellation policy.

What to include in an appointment cancellation policy

Other legal practices that are widely used by different service provides and are listed in the appointment cancellation policy include:

  • non-refundable deposits required to book an appointment
  • fixed appointment cancellation fees
  • a request to add a credit card to book an appointment (the client gets charged only after the service is provided)

Note that charging 100% of the sum for services that are not yet provided is an illegal practice you should avoid.

On the other hand, to encourage clients to book appointments, you can include:

  • a free appointment as a bonus when your client spends a certain amount of money
  • a free appointment when a client books a paid appointment
  • fees that apply to services booked on the same day
  • a discount when booking a service well in advance

It’s also a good idea to include cases in which it’s fair to waive the cancellation fee:

  • If you’ve made changes to your cancellation policy and a regular client wasn’t aware of the new terms
  • When appointments were booked before the policy was set
  • For cancellations that occur within cancellation windows

These are only some topics you should cover in an appointment cancellation policy.

Appointment cancellation policy example

Before you set up an appointment cancellation policy, it’s worth looking at your competitors. Cancellation policies vary for different niches and industries, and getting some insights will benefit you.

You can also look at templates available on the web to better understand the standard practices and structure of a cancellation policy template for appointments.

Check out the template below as an example of such a policy — but keep in mind that you still have to adjust it to make it work for you.

Appointment cancellation policy template

You will have to add the cancellation windows that work for your clients and your business as well as set a cancellation fee that corresponds with your potential business losses.

Download an editable appointment cancellation policy template and adjust it to work for your business!

Tips on reducing short-notice appointment cancellations

Setting an appointment cancellation policy not only makes clients aware of the consequences they will face if they want to cancel an appointment but also highlights their rights to get a refund in certain circumstances. However, having this policy in place isn’t enough to prevent short-notice cancellations. People can forget they have booked an appointment or might not pay attention to the cancellation terms.

Check out the tips below to find out how to help your clients stay on track with booked appointments and improve their experience.

#1 Use appointment confirmations

Sending automated appointment confirmations lets your clients understand they have successfully booked a meeting. You can also remind your clients about the cancellation policy to make them aware they can cancel a meeting in a certain safe window if needed — just ensure that this reminder is subtle so as not to trigger unwanted cancellations

#2 Notify your clients about upcoming appointments in advance

Clients sometimes forget the details of upcoming appointments, especially if a booking is made far in advance. It’s a good idea to remind them about the date and time of the meeting. You can easily automate such notifications with ExpertBox business management software.

Notification about upcoming appointments

As a service provider, you get notified when a new appointment is booked or an existing appointment is rescheduled or canceled. You also receive a notification a day before an appointment and 30 minutes before it. All the notification settings are adjustable both for you and your client. Moreover, you can set cancellation and rescheduling rules, allowing clients to cancel appointments only within a certain timeframe.

#3 Provide a fair cancellation window

The main point of providing a cancellation window is to give clients an opportunity to cancel an appointment they can’t attend. Keep in mind that you won’t improve the client experience by setting an unreasonable cancellation window that forces your clients to pay cancellation fees for nothing. You have to carefully check your cancellation policy and ensure that your clients are not burdened by the rules you have set.

#4 Ensure your clients know appointment cancellation policy terms

People tend to skip the policy terms, so it’s not safe to assume they are aware of their rights to cancel an appointment within a specific timeframe. That’s why it’s important to make sure your appointment cancellation policy wording is extra clear. Also, consider using a booking platform like ExpertBox where you can offer your clients to review and sign the cancellation policy before or after they make a booking.

Booked appointment

Use ExpertBox to reduce cancellations and level up your client booking experience! The first 14 days are free!

#5 Offer a rebooking option

Rebooking is a safe alternative to a cancellation that helps your client find a better time for an appointment. This way, your client will still be able to use your services at a more opportune time and you won’t lose business.

#6 Set a no-show limit

No-show rates depend on different factors, one of which is how loyal clients are to your business.

For new clients, the average no-show rate may be higher than 15%. For regular clients, the no-show rate rarely exceeds 10%.

You can set a no-show limit based on current statistics on no-shows that works for your business and ask clients that exceed the average no-show rate to book your services only with a non-refundable deposit.

#7 Charge a cancellation fee

It’s legal to charge a cancellation fee in the US for many kinds of businesses. However, there are several limitations you have to keep in mind to ensure you don’t abuse this option:

  • Ensure that cancellation charges are limited to a genuine estimate of what your business will directly lose as a result of the cancellation
  • You can’t be compensated twice for the same loss (e.g. by retaining advance payments and imposing a cancellation charge)

Make sure your cancellation fees are reasonable and are directly related to the damage done by a late cancellation or a no-show.

Final thoughts

When you set an appointment cancellation policy and combine it with effective scheduling automation tools, you provide your clients with a better experience, showing them that you care about their needs and want to establish a business relationship based on mutual respect. Setting up an effective appointment cancellation policy shows that you honor your promises and offer your clients flexibility. We hope this article has given you everything you need to create a policy that will work for your business. For more helpful tips on managing appointments, sign up for our newsletter!

  • An appointment cancellation policy informs your clients of your rules for appointment cancellations. These rules apply to clients when they book an appointment with you and then want to cancel it for a number of reasons.
  • Typical cancellation windows for businesses vary between 24 to 72 hours. Though some businesses use a 24-hour appointment cancellation policy, that may not be applicable to all business models due to weekends and/or same-day appointments.

    You can create your policies, charge cancellation fees, and set service agreements as you wish, as long as they don’t violate the laws of your state and the FTC’s Cooling-Off Rule.

  • You should include these key points in your appointment cancellation policy:

    • The timeframe in which a service can be canceled with or without penalty
    • A notice on how cancellations should be communicated to you (text message, email, etc.)
    • A late cancellation penalty charged, when:
      • clients cancel appointments outside of the cancellation period
      • clients don’t show up for appointments
    • Accurate contact information for notifying you of cancellations
    • A place for a signature
  • Feel free to use this editable appointment cancellation policy template, adjusting it to your business needs.

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