The rules stating how much notice a client must give to cancel, and what they owe if they cancel late or not at all.
A cancellation policy sets the rules of the game before anyone needs them. It answers two questions in advance: how much notice must a client give to cancel cleanly, and what happens if they cancel inside that window? A common version might be “48 hours’ notice for a full refund; cancellations after that forfeit the deposit.”
For sellers, a written cancellation policy is the difference between a calm conversation and an awkward one. Because the terms were agreed up front, enforcing them isn’t personal — it’s just the policy the client already accepted. Without one, every late cancellation becomes a judgment call that costs you either money or goodwill. State it at the point of booking, not buried in a contract nobody reads.
For buyers, read the cancellation policy before you book, not after your plans change. A fair one gives a reasonable notice window and clear consequences; watch for policies that keep large sums for cancellations made well in advance.
Pair it with a rescheduling policy so clients have a lower-friction option than canceling outright, and a no-show fee for the no-notice case. Set it all up fast with a cancellation policy template.