Well, it seems like there's not much else on anybody's mind other than the current pandemic. For me, it's Cake Cancelations. So today I want to talk about How to Handle Cake Cancelations.
In light of the non-stop toilet paper memes due to the nationwide shortages, I couldn't help but think of this toilet paper cake I made a few years ago. So even if you can't' get real toilet paper, you can always have toilet paper... cake.
But seriously... as I've been thinking about it, here are the top concerns I hear from cake decorators.
How to Handle Cake Cancelations...
I have had 2 canceled orders myself. Well, one was rescheduled. But since I just had surgery, I really didn't have a ton of orders anyway.
I had two orders last weekend that were kept - one was this wedding cake:
The other was an Amazon Box & Zulily Bag Cake, which you can scroll down to see.
I also had one upcoming cake order rescheduled from March to April and a dessert table order delayed indefinitely.
But what if your customers are asking to cancel? How should you respond?
The short answer is refund, refund, refund... if at all possible. I know it will hurt your business and your bottom line. I know it will be hard. All of our businesses are going to suffer. They just are. But in times like this, we can be the face of empathy and kindness, of love and humanity.
I hope most of you use contracts. I know they're airtight. I know most have non-refundable, non-transferrable deposits. But at times like these, I believe we have to sometimes put business aside and put humans first.
My friend Grayson says "People over profits" and that's how he runs his business. Since hearing him say that, I do my best to live by the same standard.
Nobody asked for this. Nobody could've seen it coming. And I'd be willing to bet almost nobody is happy about rescheduling their parties and/or weddings.
First and foremost, the Bible says, "Treat others the same way you want them to treat you." If you had a party, a birthday, or a wedding planned, and suddenly had to cancel because of events beyond your control, how would you want to be treated? Put yourself in their shoes. Really think about that.
Personally, I'd probably want to recoup as much money as possible. But I'd also likely plan to reschedule my event and some point and wouldn't mind vendors holding my deposit for the same event, different date.
At the end of the day, your clients are a lot more likely to come back to you when this is all over if you've treated them with kindness, generosity, and consideration.
How can you afford to offer refunds?
For me, I don't live "cake to cake" or as some say, "paycheck to paycheck." I have a reserve of income in my business savings account that will help keep my business stable at times like this.
I have enough to continue to pay myself a regular salary for at least 3-6 months at all times. That includes having enough to offer refunds on deposits I've taken already. If you're not doing something like this, you should be.
I have an entire post on how to build a cake business savings account here.
Here's what I'm doing and suggest:
So if my clients initiate a cancelation, I intend to refund as much as I possibly can. What does that mean? Here are some scenarios:
- I will first encourage clients to reschedule versus cancel. Even if they don't have a set future date, I'd try to get them to let me keep the deposit and be as flexible as I possibly can to reschedule them when this dust settles. But if they insist on canceling...
- If I haven't spent any money on the order or any significant time, I'll give a 100% refund.
- If I've purchased supplies that won't expire and can be used on future orders, I will likely still refund 100%.
- If I have purchased supplies or ingredients specific to that cake that I cannot use on another order, or might expire, I will refund minus the cost of things I've already purchased or minus wages if I've spent hours of time in planning, shopping, etc.
- If the cancelation is truly last minute and I've already baked and decorated the cake, I'd likely offer to freeze the cake for a future date or tell them to freeze it for a future date and offer no refund. I have a post here about freezing cakes and another post here about how to freeze a fondant covered cake.
What if you can't afford to do that? Maybe you took deposits that have long been spent on other things? Or cake decorating is your only source of income and you can't take the loss on refunded deposits?
Can't afford that? Here are some other options:
- If for some reason you cannot afford to refund prepaid cakes or deposits, consider offering a gift certificate for equal value to be used in the future. In other words, offer to reschedule or transfer the order to a later date without penalty.
- If they've paid a deposit, offer them a credit of that amount for any other order. For instance, if they've already paid a $200 deposit for a wedding that has been indefinitely delayed, they can use a credit of equal value for cookies or a birthday cake or on any other product that you offer.
- If they don't know when they can reschedule, tell them you'll hold the deposit for up to 3 months (or 6 months or a year) and give them that credit toward their order when they reschedule. If that timeframe expires, they lose their deposit.
- Above all, have compassion. Everybody is hurting. You're hurting. They're hurting. Do what you can with kindness.
But what if the roles are reversed and YOU need to cancel on your clients?
For me, this is a no-brainer. I refund the money - all of it - in full and without hesitation. If I get this novel virus, I will be canceling any and all orders and issuing prompt refunds.
If my kids or husband gets the virus, same. If grocery stores run out of ingredients and I have no way to bake the cakes... again, refund immediately.
I take this part of my job and my commitment to clients very seriously and I have an entire clause in my contract dedicated to it. Here's how it reads:
"I take my obligation to provide your wedding cake as agreed in this contract very seriously. However, should an unforeseeable event occur which prevents me from fulfilling my obligation and I must cancel my agreement with you, I will refund your payment, in full and without question. This includes any act of God, a critical illness (myself or an immediate family member), death in our family, etc.
In addition, if at all possible I will work with you to find another qualified bakery to assist you with your wedding cake and will cooperate in transferring materials and plans to the new baker. This has never happened - but I just have to say it."
Lastly, create a contract that will cover future situations like this.
If you don't already have contracts for your cakes - you should. Make sure they cover your obligation and commitment, all details (including pictures, flavors, sizes), event location, times, contact information for all important people (bride, groom, wedding coordinator, etc.), and of course, your plan for emergencies, mistakes, weather, and acts of God.
I haven't updated the post in quite some time, but I have a sample cake contract here.
Anyway, I hope you are all well and I'm praying that we can all hunker down, weather this storm and come out stronger!
How to Handle Cake Cancelations - what are you doing? I'd love to hear in the comments.