Should you take a prepayment to reduce no shows?

June 27, 2022

When you’re starting your own business, one of the most important decisions you’ll make is how you will handle payments. Do you want to take prepayments from clients, or do you want them to pay on the day of appointment? Prepayment has a lot of advantages for service businesses, but there are also some challenges that come with it. In this blog post, we’ll discuss both sides of the issue and help you decide what’s best for your business!

Taking prepayment reduces no-shows

The biggest benefit of taking prepayment for services is a reduction in no-shows. When consumers pay for a service in advance, they are much less likely to cancel or not show up for their appointment. Pre-payment also gives you the confidence to plan your schedule more accurately, since you will know exactly how many appointments you have each day.

The other side of the argument is that requesting prepayment creates a barrier to getting a booking. If a potential customer has to jump through hoops to book an appointment, they may just go to the next business on their list. Prepayment also requires you to have booking software that ensures consumers can easily pay online. If your booking system is complicated or hard to use, you may lose customers before they even get started!

Remember that like all things in business, client expectations evolve, there was a time where we had to call airlines to book a flight, now that’s a thing of the past. Why? Because the consumer evolved, they became comfortable with booking and paying online. You may decide that your clients aren’t ready to pay online, but expect that to change in the future.

Deciding the best solution for your business

There are pros and cons to taking pre-payment for services, but ultimately the decision comes down to what’s best for your business. Before making a decision, consider how much no-shows are actually costing your business.


Take the number of no-shows from the last month, then average that figure on a daily, weekly, and monthly basis. Use the value of those bookings and calculate the yearly figure.

For example, if an appointment is worth $110, and on average you have 1 no-show per day on a 5-day working week. That equates to $26,400 per year on a 48 week calendar year (accounting for holidays)

Consider taking a deposit rather than the full prepayment

If you’re still undecided, another option is to request a deposit rather than the full amount. This way, you can still reduce the number of no-shows while also giving consumers the flexibility to pay the majority of the amount on the day of their appointment.

Most payment gateways allow you to determine how much of a deposit you want to take. (Generally 10%, 25% or 50%) Also ensure your booking software allows you to issue refunds without being financially punished.

Client communication is often the answer

Appointment reminders are another critical means to reduce no-shows, Nabooki booking software enables you to send email and SMS reminders to your clients. To get the most out of these reminders, it’s best to make sure one reminder is sent outside of the cancellation period, and one the day before the scheduled booking. A simple phone call before their appointment can also make a big difference.

Click here to find out more about how to improve your communication with clients

In conclusion

There is a simple answer when it comes to taking pre-payment for services. It ultimately depends on what’s best for your business. Test out different solutions and see what works best for your business!

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