·  Legal News, Analysis, & Commentary


The Ultimate Guide to Booking Cancellations and Refunds

— December 5, 2023

While booking cancellations and refunds can be frustrating, knowing your rights and responsibilities can make the process easier.

Life is full of twists and turns. One minute, you’re planning a rejuvenating day at a luxurious spa or an adventurous week-long vacation in Bali. The next, you’re facing unforeseen circumstances that necessitate canceling your plans. These situations can be stressful, particularly when you’re unsure about the possibility of reclaiming your hard-earned money. 

Let’s explore the ins and outs of booking cancellations, when you’re well within your rights to obtain a refund and when you should potentially seek legal counsel.

Understanding booking cancellation policies 

Every company that provides services from spas to lawn mowing has a booking cancellation policy. They exist to protect the company from unnecessary losses and hassle when dealing with clients who cancel sessions or services whimsically. But like Facebook’s Terms and Conditions, nobody reads the cancellation policies. 

In general, booking cancellation policies will cover total or partial refunds unless a deposit was taken if a cancellation is made within a reasonable period. This is usually within 24 to 48 hours of the time or date of the service to be rendered. 

Cancellation policies also cover reimbursement options for customers, including when they can expect a refund, how much, and through which payment method. The payment method is typically the one the customer used to pay for the service in the first place. For example, a VISA debit card will be reimbursed directly, whereas cash payments will likely have to be reimbursed with cash. 

Generally, the essential parts of a booking cancellation policy are: When must you cancel your reservation to be fully reimbursed? And how you will be reimbursed.

Legal rights and regulations 

There is no federal law governing returns and refunds in the country. However, certain U.S. states have done so, but it is ultimately up to the business’ discretion how to issue a refund and in what timeframe. 

Most state laws mandate that businesses have a posted returns policy on their storefront or website’s front page. Additionally, most store refund policies (though not covered by law) will state that a proof-of-purchase, generally in the form of a receipt (whether digital or physical), is necessary for a refund. 

In the case of a dispute over a cancellation refund, consumers do have legal rights under the Consumer Protection Act, most pertinently Section 17, which reads: “Section 17 of the CPA affords the consumer the right to cancel a reservation, booking, or order for goods (other than specialty items), and the supplier may impose a reasonable cancellation fee. 

However, if your supplier has no cancellation fee written into their policy, they cannot charge you suddenly. The supplier of the goods must offer a refund to the customer within 60 days of the original purchase of the disputed item. 

Other legal options for consumers could include litigation for failure to provide a refund within their sixty allotted days, although small claims courts are reserved for between $3,000 and $10,000.

Different booking platforms, different rules 

When booking a service online, the consumer must understand that different third-party booking platforms can have different rules concerning refunds for cancellations. For example, AirBnB’s cancellation policy offers people renting out their spaces different levels of cancellation policy flexibility. 

Some offer full refunds within 24 or 48 hours of the occupancy dates. Other levels offer partial refunds if a reservation is canceled within 24 hours of the booked dates. Some stricter policies mandate that guests cancel within 48 hours of booking and at least 14 days before check-in. 

Others, like, leave the booking cancellation policy entirely in the hands of the seller of the service or accommodation, as do most other third-party service connection websites. 

If you use spa software for online bookings, it requires a keen awareness that each platform may have rules governing cancellations and refunds. Ensure to carefully review the terms and conditions of the spa software you choose, including their specific cancellation policies. 

Thoroughly read the terms and conditions on the site you use to book your service and their cancellation policies. If a service operator leaves you high and dry, it’s unlikely that the third party will be able to assist you with remuneration options.  

Booking cancellation fees and penalties

Polster Caps MDL Attorney Fees at 15% of Settlement
Photo by Karolina Grabowska from Pexels

Suppose you cancel a booking outside the grace period of 24 to 48 hours before your reservation or service or outside the allotted grace period dictated by the supplier’s returns or refund policy. You may be charged a cancellation fee or other penalty in that case. 

These charges should always be stipulated in the supplier’s terms and conditions. If they are not, the supplier is not entitled to charge you.

Refunds and timelines 

In general, refunds are granted on purchases within 14, 30, or 60 days of the date of purchase for any sold item that doesn’t work or the consumer wishes to return for any other reason. This does not often apply to specialty items. However, refunds for products under warranty may also be covered under a manufacturer’s warranty.

Tips for navigating booking cancellations 

Nobody likes to cancel something they were looking forward to, whether that’s a service like a spa day or a gift they can no longer afford. But, sometimes, things happen, and you just can’t afford the item any more or that getaway you’d planned. Here are a few tips to navigate the world of booking cancellations. 

As a business owner 

  • Try to be as accommodating as possible, within reason, towards your customers and their cancellations.
  • Make sure you have a posted booking cancellation policy for easy referencing for yourself and your customers.
  • Be kind, courteous, and respectful when customers request a return or refund, even if they are frustrated or upset.
  • Familiarize yourself with the law in your state concerning your obligations to refund your customers.

As a customer 

  • Know your rights under the Consumer Protection Act.
  • Speak firmly but kindly to the supplier that you are interacting with. Affirm your request for a refund if you receive pushback from them.
  • Attempt to resolve the matter within 24 to 48 hours of the purchase or service rendering date. This makes it easier for everyone.
  • Ensure you have your proof of purchase in hand to provide a serial number on your receipt or other requested information from the receipt to make it easier for the supplier to find your purchase within their system.

While booking cancellations and refunds can be frustrating, knowing your rights and responsibilities can make the process easier. Remember to know the booking cancellation policies of the site you’re booking on (before you book), be aware of your rights under the Consumer Protection Act, and keep proof of purchase on hand for reference.

Join the conversation!