Canceled deposits: check fee loss before you promise a refund
Card and platform fees may not come back when a job is canceled. Check the fee, tax, and cancellation terms before promising a full refund.
Back to all briefsA canceled deposit should be treated as a mix of collected cash, processor fees, earned work, and cancellation terms. Before returning money, estimate the fee you will not recover, decide whether any part of the deposit was earned, and write the result into the invoice or quote so the refund or credit matches the actual balance.
Separate the deposit from the fee
A customer sees one payment, but the business may be holding a deposit, paying a processor fee, and covering time already reserved. Run the fee math before promising a full refund so you know what cash can actually be returned.
Decide whether cash, credit, or earned work applies
If materials were ordered, time was reserved, or the contract allows a cancellation charge, the right answer may be a partial refund, a credit toward future work, or no refund on the earned portion. Keep tax, platform, and card-network treatment separate from the cancellation policy.
Put the rule in writing before taking deposits
State when a deposit is refundable, whether fees are retained, and how cancellations are handled after approval or scheduling. Confirm contract, consumer, tax, platform, and accounting rules before relying on the policy.