We are hopeful that the Prime Minister’s roadmap for the country, to be announced during the week commencing 22nd February, will bring some clarity on when weddings might return and the format they might take. If so, it will be a catalyst for couples in making a decision. For some, it may trigger cancellations and postponements. For those who have held off booking, it may give them the confidence they need to confirm their date.
Either way, it’s worth being prepared.
This article looks at:
- Pro-rata polices
- How to approach postponement requests
- Charging for postponements
- If you aren’t available for the new date
- Charging for cancellations
- Our top tips for avoiding disputes
- Maximising on new bookings for this year and beyond
In addition to the article, we thought it would be helpful to share the presentation part of the Zoom call and Q+A session we held for some of our clients to look at the situation we think we will be facing when we re-open and the reason that having a good postponement, cancellation and pro-rata policy is in place is so important.
What is a pro-rata policy?
The video shows the importance of working out what your couples may assume in the way of charges if their wedding can go ahead, but not exactly as planned. It shows that nearly half the 6200 couples surveyed would expect a pro-rata reduction in cost in their venue hire, even though a hire-only contract costs exactly the same to deliver, regardless of numbers.
If you are unable to supply the full service you have been contracted for, as a result of restrictions, the CMA recommend agreeing a pro-rata reduction in cost to avoid the business being in breach of contract. As a business you are required to comply with all government guidance so it is irrelevant whether the restrictions are guidance or law.
Check the wording of your contract to know the potential liabilities, as contracts vary.
If you have specified that you will supply a service that is partially prevented by restrictions, such as supplying an 8 piece band if only 6 are permitted to perform together, it is reasonable to reduce the costs by a nominal amount to account for the part of the service you cannot supply, especially if you have lower costs.
From the experts
However, there will also be situations where you could supply your full service but the couples no longer need it, such as if the wedding is going ahead with lower numbers, and the service you supplied is based partly on numbers, for example linen hire, table arrangements or the size of the wedding cake. In these cases it is reasonable for the couple to expect a reduction in cost as they have been prevented by law from using the service they booked. However, as a business it is obvious that it can't be the pro-rata reduction couples might expect as the original price would have been calculated based on economies of scale. The ideal is simply to recalculate based on what you would have quoted for supplying the smaller size, but the legal requirement to do so will come down to the individual wording of your contract.
It becomes more challenging when the couple chooses not to use part of your service as the wedding is smaller, such as cancelling the second photographer or only using the makeup artist for the bride and not the rest of the bridal party. In these cases that element would usually be treated as cancelled, with any part refunds based on fair T+Cs.
In all situations, the key is to communicate with the couple as early as possible and be transparent with costs. If you can't agree a compromise, they should be given the option to postpone or cancel, in which case reasonable costs incurred to date can be charged.
How to approach postponement requests
In most cases, it is the venue or the couple that makes the decision on a postponement. It is a huge decision and can have significant financial and logistical implications.
Most couples want to be able to use their original suppliers but they don’t always contact them before making the decision to postpone. This may be because they don’t want to hear conflicting advice, it may be that they had limited time to make the decision, or it may simply be that they forgot. It’s frustrating as a supplier, but few couples have been through the process of postponing a wedding before now and they don’t know the etiquette.
Make it as easy as you can for them to check in advance if your availability is limited. If you advertise on Guides for Brides, keep your online calendar up to date (ask John if you need help). If you are a recommended supplier for a venue, send them a link to your calendar.For those yet to postpone, encourage them to listen to our weekly Wednesday Facebook Live updates where we repeatedly remind them of the more helpful way to go about it!
If you aren’t available for their chosen date
When the couple booked you, you agreed to supply a service on or for a specific date. Couples are likely to be in breach of their contract with you if they change their wedding date without mutual consent.
Be transparent with the costs you incur at each stage so they understand the costs of cancellation if you aren’t available.
The costs for cancellation will almost certainly be different depending on whether the wedding could go ahead on the original date, or is “frustrated”.
- Where the contract is frustrated: The CMA supports businesses in charging reasonable costs incurred relating directly to this contract. We’ll come on to what is reasonable later.
- Where the wedding could go ahead but the couple chose to postpone: The couple would be bound by your T+Cs. However, consumer law requires the contract to be fair.
- Where the wedding could go ahead but the venue asked the couple to postpone: The couple would technically still be bound by your T+Cs, however, to preserve your relationship with the venue that might not be the most helpful approach to take, especially as the venue may have been encouraging the couple to postpone in order to have a more “complete” wedding that can include all their suppliers.
Under most contract terms you would not be obliged to accept their new date, even if you are available, as it is a variation to the contract.
Should you charge for postponements?
Most businesses have accepted that some of the costs and time involved in reassuring couples and rearranging their plans - often repeatedly - are an unfortunate effect of Covid. These businesses are being rewarded with positive online reviews for going out of their way to help. Do this “work” during furlough time if you are eligible; it seems reasonable to suggest that it wouldn’t form a normal part of your work, it is offering a service to your clients not your business, and certainly isn’t revenue-generating.
Prior to Covid, dates were the precious commodity. Postponing from a prime date was a lost opportunity and would usually incur a charge. The same hasn’t applied during Covid as there has been little demand for dates.
However there are cases where it could seem reasonable to charge for a postponement.
- Where you have incurred costs that can’t be carried over to the new date it is reasonable to be recompensed. This might include perishable items such as makeup or cake ingredients.
- If the new date is typically sold at a higher price, it isn’t unreasonable to charge the difference. However couples may then expect the same to apply when changing to an off peak date. It is more likely that you will be moving to an off peak date as venues are rarely now offering like-for like.
- If you usually increase your prices annually, it is fair to charge the difference, especially if costs have increased significantly, for example as a result of Brexit.
There may be other situations where additional costs are justified, but be clear and transparent on any additional charges. Sensationalist news headlines have led couples to feel that wedding businesses are treating them unfairly. It is also worth remembering that the alternative to the couple postponing may be to go ahead with their original wedding date, with less guests and suppliers involved.
How to approach cancellations
We’ve written various articles looking at CMA advice and legal advice for wedding suppliers, but it is hard to give hard and fast rules as there simply isn’t a “one size fits all” solution.
Most businesses have taken the approach of charging the couple for actual costs that have been incurred until that point, including a nominal amount for time spent on the admin. It means that you don’t make a profit, but equally you don’t make a loss. You are in the same position as if you’d never met the couple. Meanwhile, the cost to the couple tends to be palatable and both parties can walk away without the risk of dispute or bad feeling.
There is a difference to the couples’ rights if the contract was frustrated, in which case only reasonable costs can be recovered. If the couple are choosing to cancel your normal T+Cs will apply, but only if the T+Cs are fair.
What is a reasonable amount to charge?
You will know the costs that you have incurred for meetings or for purchasing materials. You can’t include any costs incurred before the contract was signed, or your normal business running costs.
It can be helpful to compare them against others within the industry, especially as couples are comparing notes on what they have been charged, so we looked at the costs typically incurred by a range of 470 wedding suppliers, 8 weeks before the wedding.
We are not saying these amounts are right or wrong, but if your own calculations are outside the typical range, it could suggest that your business model is different from others.
When calculating deductions, remember that the original contract would have included an amount for your profit, but it is only costs and not a proportion of potential profit that can be charged.
Typical costs 8 weeks before the wedding:
- Photographers: 10-30%. Typically for administration and site visits. More if there has been an engagement shoot.
- Florists: 0-30%. Flowers are usually ordered under 4 weeks from the wedding and a lot of the planning work takes place during the initial quoting consultation, before the contract is signed. Floral designers tend to have higher costs at an earlier stage, as a result of site visits to measure up for specialist installations such as floral arches.
- Caterers: 0-25%. Most of the direct costs are incurred during the 2 weeks before the wedding.
- Bridalwear: 50-100%. As soon as a gown has been commissioned around 50% of the cost will have been incurred. In many cases the dress has been altered and is ready for collection 8 weeks before the wedding.
- Celebrants: 25-85% as some celebrants design and write a personalised ceremony soon after being appointed. Around 75% of costs is typical, with the remainder of the costs being incurred on the day.
- Planners: 50-75%. For those that offer only a minimal service on the day, up to 90% of costs have been incurred at this stage. Almost all the work involved is in the early planning stages and is specific for each wedding.
- Cakes: 10-50% with 25% being typical, however the type of cake and decorations will dictate how much of the work is carried out in advance. Fruit cakes and sugar flowers are often completed 8+ weeks in advance and specialist ingredients have a short shelf life.
- Hair and Makeup: 20-50% as most have carried out a trial and ordered makeup specific to the wedding by the 8 week point.
- Marquees: 5-50% with most companies correctly recognising that only 5% of costs could be charged as the site visit and quoting are typically carried out pre-contract as part of the tendering process. As a result we have noticed that marquee companies have consistently offered the most flexible and generous postponement and refund policies, despite having perhaps the highest overheads.
Our top tips for avoiding disputes:
- You won’t go wrong by treating your clients as you would want to be treated. If it genuinely feels reasonable to you, it is probably about right.
- Be transparent with your policy. Let couples know when the majority of the work is carried out. If they know before postponing that you have already done 50% of the work, they are more likely to consult with you on your availability when agreeing to a new date in order to avoid a cancellation.
- Ask a business you trust whether your policy seems right. This isn’t one for online forums; we’ve noticed a few businesses “goading” others into unfair policies, perhaps to justify their own decisions. Feel free to use us as a sounding board.
- Minimise costs. It’s understandable to want to use this quiet time to get ahead with current bookings, but where possible, minimise the time and money spent on each contract until you are confident it will go ahead.
- Finally, accept that this situation isn’t fair. Not for you, not for your couples. All anyone can do is minimise losses for both parties. Finding a way to share the loss is preferable to either side holding out and wasting time, money and energy on a court case. We are saying the same to couples in the hope that they are kind and considerate to their suppliers.
New bookings for this year and beyond
Any sort of clarity will trigger new bookings which have been paused since 4th January, after a strong start to the traditional “new enquiry season” from 26th Decmber.
There are a number of couples keen to get married this year, regardless of restrictions. Others may now have the clarity to commit to their booking for 2022 or beyond. A significant number of couples will be abandoning their overseas wedding and rebooking in the UK.
Top tips to maximise on these bookings:
- Be visible. Post regularly on social media and update your online listings, ideally with images and text reflecting the smaller and more outdoor focussed weddings we are likely to see over the next year.
- Be available. Show couples the dates you have available and make sure you are listed on Late Availability pages. If you haven’t already added the Guides for Brides calendar to your website, speak to John today as it takes less than 5 minutes to add it.
- Business as usual. Couples want the assurance that all is well with your business. Respond to emails the same day, redirect calls to your mobile and although you may not be able to meet them in person, arrange a zoom consultation or video call.
- Show confidence. Market yourself aggressively; show that you are investing in your business so that couples have the confidence to do the same.
We'll be holding a Zoom meeting for ur clients at 11am on Wednesday 17th February with a presentation on best practice for refunds. If you haven't received the link please email john@guidesforbrides.co.uk