Using Deposits the Right Way in Your Salon

21 May 2021

Implementing a deposit system can be difficult for salon owners to manage. This article will discuss a few key tips to making sure your salon deposit system will keep running smoothly.

The hair and beauty industry has seen the use of deposits by salons around the UK sky rocket over the last 12 months during the Covid 19 pandemic.

Deposits have always been a system where salons attempt to implement them, but are never able to fully commit. On the other hand, many salons start taking deposits, but the deposit policy fades out quickly.

Deposits are particularly important when you have online bookings active on your website. As this system can make it easier for clients to quickly book an appointment and forget the time and date scheduled soon afterwards.

Why do salons stay away from taking deposits?

There are many reasons why salons choose not to take deposits in their salon, see some below;

  •  Salon deposits are too difficult to implement,
  • The salons are unsure of how to implement it,
  • The salon team are not behind it and think it is a bad idea,
  • Too many clients would be unhappy with a deposit system,
  • The salon staff are worried about upsetting clients,
  •  No other salons in the area take deposits.

Let us now consider the reverse and think about why many salons are now choosing to take deposits, both for in salon bookings and online.

Why do salons take deposits online?

Salons can take deposits for many reasons, one of the most important being to reduce no shows. No shows can be very costly to any business if they are not monitored and managed correctly. Having appointments booked by a customer that doesn’t turn up, can lose your salon a lot of revenue. This is particularly true in the salon industry as many salon appointments can last over an hour if the customer is booked in for a cut, dye and blow dry.

Cancellations are another area within your hair and beauty salon, that if not tracked and measured, could end up costing you a lot of money.

Deposits can ensure that your customers value your skill and time – as the last 12 months during the pandemic has really given the industry a boost. With stylists skills within in the industry now being far more valued as ‘not just hairdressers’ or ‘not just beauty therapists’. Hair stylists are highly skilled and extensively trained professionals in the hair and beauty industry and as such their time is extremely valuable.

Managing your cash flow can be hard and often many salon owners run their business on a month by month basis, with cash flow sometimes becoming extremely tight. Deposits can really help with overcoming this problem, as it enables you to manage your bills and invoices better. Spreading out your cash flow over the month instead of having a huge amount leaving your bank account in one go.

Deposits are an excellent way to get rid of people that may be unsure about arriving at your salon – having online bookings without deposits can attract people to book an appointment with you when they are not fully committed to that specific date or time. Deposits can help you completely filter out any of these dud appointments so you only have clients on your books that will be able to arrive at the salon.

How can you implement deposits and use them the right way in your salon?

We know your clients come first and they are an integral part to your business. Without your clients you have no business, just like without your staff your business would not function.

Implementing a lasting deposit system in your salon can come down to just a few things:

  • Have a clear system in place that everyone in your salon understands, without this you cannot ensure consistency with any new system that is implemented.
  • Educate your clients. If your customers become unhappy with the change in policy you have put in place, such as paying a deposit for a future booking, it is likely because they do not understand the reasons behind your decision.

If you explain your reasoning for this change in your salon rules, as well as the impact it has when people do not turn up for a 2 to 3-hour appointment, it can have a big knock on effect.

When making changes it is extremely difficult to implement them for select clients only. While some of your loyal clients may never miss an appointment, the system needs to be kept fair and it’s down to the salon staff to make sure everyone follows the salon rules and receives the same level of service.

What do you do before you implement deposits in your salon?

Be clear on your reasoning to make sure your team fully understand why you are making the decision to take deposits for each appointment. Having your team ‘buy in’ to your idea is crucial at this stage. You will need your staff on your side so that the deposit system works and you see it through to being the ‘norm’ in your salon.

To explain your decision, have a team meeting with your staff to get their thoughts and opinions on asking for a deposit from each client. Make sure to explore each point they raise and use it as a team building and brain storming activity.

Using salon software to store your deposits

Salon software can play a huge part in taking deposits for future appointments. To ensure a smooth process for this change in policy and an amazing client experience, using salon software to help you manage the system can make taking deposits far more efficient. When using this software each deposit is stored on the clients record card, with full audio available to break down the deposit payments and redemptions.

Paper and digital receipts are also a useful tool for implementing deposits and can be given to customers when they are requested using a printed receipt or even a receipt sent directly via email.

A full audit can be provided by the software, showing all deposit payments as well as used and outstanding balances on client’s accounts.

Keep it simple

When deciding on your deposit amount, you need to make sure you keep it simple so everyone can understand why the value is what it is. Decide on either asking for a percentage or a fixed value for the service and then stick to your decision. If you were to have both percentage and value for seperate services, you could start to confuse clients about what they are actually paying for with their deposit.

Think about whether you want deposits taken for all services or selected services. Some salons will only have a deposit option for services that take 1 hour or longer. Other salons will choose to have a deposit placed on all services regardless, as this keeps the system easy to follow for both your clients, your team and yourself.

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