The Deposit Dilemma

This topic sprouted because of a bill I am having trouble collecting on. This doesn't happen very often in fact while catering it has happened only once before. But it has caused me to look at my deposit policies.


For accommodation bookings I have always required a credit card number. It’s just good sense. In the occurrence of a bad renter (I’ve never had one) you have the security of being able to charge the customer for damage done. If they do not show up for their reservation you can still charge them and all that stuff. It’s just protecting yourself. For catering I have always resisted taking deposits on a function. My payment terms are net 7 and most people pay their bill on the night of the function or within a couple of days after.

Why have I resisted deposits on catering? All the expenses are due at about the same time as the function (within a week before or after) and I have never wanted to find myself in the situation of owing for the groceries or staff but having spent the funds on something else. Next reason: I never know exactly what the final bill will be until after we have served. So deposits have to be approximate. Next reason: I don’t want to find myself owing the customer because they made deposits and then their numbers were not what they expect. And the final reason is a bit sketchy. It’s kind of a fear thing that has never happened to me but could. Meals are very personal and I never want someone to pay full price for a meal that they are not happy with (also never happened to my knowledge but could in theory). Again I could end up owing the customer.

So what to do to prevent the situation from occurring again is the real question. You never really know when this could happen. The person in question is not one I would have expected to do this. So do I relent and insist on a deposit from everyone? Not really possible. I mean many of my clients are non profits, big corporations, school boards etc. I could just apply it to individuals I guess. Then how much deposit do you take? 10% , 30% 50% . I don’t know. The thought I have had is to take a credit card number like I do with accommodation bookings but the flaw with that is how many people can afford to have $4000 charged to their credit card? If you can’t charge the bill (because it has to be charged after we serve)to the card then you are no further ahead and it may encourage more people to pey via credit card and that only costs me.

Any other ideas how to work this?