Non-refundable retainers have been a wedding industry standard for many years. This blog is detailing why photographers and other wedding vendors charge a non-refundable retainer.
This is to educate vendors and clients as to what the retainer is for, how it works and things to keep in mind when booking vendors.
For the purposes of keeping this blog easy to understand, I am going to be writing as a wedding industry professional because I am a wedding photographer. I’m sharing my thoughts and things I have learned through trial and error, research, and hiring really smart people. I am also going to preserve the intellectual property of those businesses I have hired.
Here are some of the reasons why non-refundable retainers matter and how you can make your payment structure work for you, not against you.
Reserving a Specific Date
For service based businesses, especially those run by solo-preneurs, reserving a date means that they’re now counting on a clients business on a specific date to generate income. The retainer payment should be there to serve a purpose; reserving a specific date.
Percentage retainers have been a standard in the wedding industry, but COVID kind of changed the game on this one. I noticed too that charging a percentage lead to me charging different retainer amounts for different clients based on what package they selected.
Does it seem fair that Client A is booking your $5000 package and they pay $2500 to reserve a prime Saturday date but Client B can book your $3000 package and pay $1500 to reserve that same prime Saturday date?
The short answer is no, that’s not fair. So you have to think of your business policies from a legal perspective. What is fair is that each client, no matter which package they book, pays the same retainer to reserve the date.
Compensation for Work Performed
This is the process we do into our business after implementing the flat fee retainer policy. As we perform work for clients under our contract, we have a schedule of payments. This schedule correlates with the work that perform at different stages of the wedding planning process. This way, the business is being compensated appropriately when we work for the client. This also means that we have earned the income. In the event that a client cancels their wedding, for whatever reason, the business can justify what payments can or cannot be refunded.
Requiring Payment Upfront
Requiring payment up front 100% isn’t typical for wedding photographers. Generally there is the initial payment and the remaining balance is due before the wedding. Some vendors offer payment plans or installments. We have our payments set for the first of the month prior to the wedding. This way all of our payments are made at the same time. And we can better plan for our income coming in at the beginning of each month.
If you choose to allow payment plans, note that additional payments outside of the retainer cannot be considered non-refundable. I am fully aware some contract templates state this, but at least in California, that is not legal. The retainer payment can remain non-refundable, but the additional payments are an advanced payment for services. Unless you detail how much of those payments is for specific services, you may not have a case to defend retaining any monies paid after the initial payment.
Retainer vs. Deposit
This term is a hot button topic in the wedding industry, and with good reason! I notice clients using it in emails to me asking when they can pay their deposit. I always make sure I am using the word retainer in my responses. And I detail in my contract what a retainer is, what it is paying for and what the expectation is for those funds.
Deposit implies that the sum paid might be refundable if the client were to cancel the services for what the deposit was for. Deposits are an advanced payment. So theoretically, if a business collects a deposit for their services, but no services are performed the client may be able to make a case that the money should be returned. Yes, even if the client is the one who requested to cancel.
Retainer implies that the money is to retain the services for what the retainer was payment towards. Depending on how your contract is written and the type of services you offer customers, your retainer may be considered refundable or non-refundable. Here at MHP, we charge non-refundable retainers and detail in our contract exactly what the retainer covers. This ensures that our agreement is solid. We also send an email reminding the couple to review that section of the contract before they sign. The more touch points you have with the client to send reminders and educate them, the better. It is also more likely to hold up in court. We hope we never have to go there with a client. And we still have to protect our business.
We think the word retainer is the key word here.
Regardless of which word you choose to use for your clients first payment, it’s important to outline specifically what the payment is for. Does the payment cover any services performed such as timeline planning meetings, engagement sessions, etc? How is the retainer applied to the total bill?
I hope this blog was helpful in gaining insight into retainers verses deposits. And what will work best for your business. Join my free education community on Facebook HERE!
Disclaimer: This article is not legal advice. We recommend seeking legal advice from a licensed attorney in your state/country for the most accurate information.