Is Charging for No Shows Going Too Far?
Photo Credit: Charging no-shows could potentially damage a promising relationship. Unsplash / Vidit Goswami
Skift Take
Some companies have had it with no-shows and started charging a penalty. Others say that only makes them a target on social media.
If you want to hit a nerve with attendees, start charging your no-shows.
“I can't wait to sign a contract with the company that tried to invoice me for not eating their salmon,” one planner scoffed on LinkedIn, after she was told she would need to pay a penalty for canceling the day before an event. There was no cancellation policy on the web site, or pop-up on the registration page — just an email after the fact.
The practice could end up costing her host far more in bad P.R. and reputational damage than the price of the meal and room rental. Commenters called the situation “preposterous” and the host “greedy” and “transactional.”
Said one: “They're out the entire cost of acquiring you as a prospect instead of just the $50 for the dinner.”
A Growing Problem
Nonetheless, some companies are drawing a hard line with attendees who cancel after the window stated in their cancellation policies — or worse yet, don’t show up at all.
Events with no registration fee often see no-show rates as high as 40 to 60%, while the rate for paid events is closer to 10 to 20%. Event organizers argue that last-minute cancellations and no shows are not only inconsiderate, but put them in a tough spot with sponsors.
One planner of dozens of small hosted events for 50 attendees described it as “devastating” when a third of her attendees would cancel the day before the event. Even with backup attendees in the queue, she was forced to scramble and often came up short.
“It’s a Catch-22 because if you require that people enter their credit cards upon registration and explain that they will be charged if they don’t follow the cancellation policy, you’re going to lose a lot of potential people,” she said.
She finally decided to do it anyway, setting up the credit card payments as refundable deposits and returning the deposits once the attendees checked in. “For the most part, it has made people take their commitments more seriously and though we might be losing some people on the front end, we still have been filling the events. And it’s less hassle for me.”
Be Clear With Your Policy
No-shows will always be one of the costs of doing business, some planners say. The onus is on them to have a backup plan and decide if charging a penalty could potentially damage a promising relationship, particularly when the guest has been invited rather than applied to attend.
Katie Ray, founder of Outpost Event Co., also encourages her fellow planners to be understanding. “People get sick. Flights get canceled. Emergencies happen. Getting angry at attendees doesn't recover the seat,” she says. “Learning from attendance patterns and improving your process for next time does.”
Whatever policy organizers choose to adopt, the key is that it not only be clearly written but clearly communicated.
“It would be ideal to have the policy pop up during registration and make it mandatory to click a statement like, ‘I have read and agree to abide by all policies,’ before they can complete their registration,” said industry attorney Tyra Warner, chair of the department of hospitality, tourism, and culinary arts at College of Coastal Georgia. “As long as the policy is clear and available to the attendee, it can be enforced.”
Anything less — a policy that’s posted in fine print on the web site, or added afterwards — might not be binding.
Smart Strategies
Some event management software programs with on-site check-in/attendance tracking allow planners to flag and blacklist chronic no-shows for future events. Organizers can also protect themselves by physically contacting a previous no-show who applied again to confirm they will be coming, or by placing them on hold and following up shortly before the event if space is still available.
Personalized reminders, including via text, are becoming more common, as is requiring a check-in confirmation earlier in the week, before the no-show deadline passes.
Some planners even send an email describing the impact of last-minute cancellations, from financial costs to wasted food, to explain the reason for the penalty.
As one put it: “The situation has gotten worse, so we’ve been forced to make it personal.”
