Cancellations are part of running a business, whether you're a coach, designer, strategist, photographer or another type of creative freelancer. But they shouldn’t mean lost income or wasted time.
That’s where a cancellation fee comes in. When written clearly (and kindly), it protects your time, sets boundaries, and keeps the cash flowing, without turning off dream clients.
In this guide, we’ll break down what a cancellation fee actually is, how to write one that sticks (without sounding scary), and where to display it so clients never say, “I didn’t know!”
What is a Cancellation Fee?
A cancellation fee is a clause in your client contract (and often your booking terms) that allows you to charge a set amount if a client cancels or no-shows within a certain time frame.
Why bother?
Because your time has value. When someone cancels last-minute:
- You might not be able to rebook that time.
- You’ve already prepped (mentally and logistically).
- You may have paid for materials, spaces, team support, or other expenses.
A cancellation fee helps you recoup those sunk costs and protects your income. It's not about being punitive, it's about setting professional boundaries.
Is a Cancellation Fee Legal in Australia?
Yes, but there are rules. Your cancellation fee needs to be:
- Fair and proportionate to the loss you’ve suffered
- Transparent — the client must have seen and agreed to it before booking
- Not excessive or punitive (which means no “100% fee no matter what” policies unless clearly justified)
Under Australian Consumer Law, if a cancellation fee looks more like a punishment than a reasonable reflection of your costs, it could be considered an unfair contract term, and that can get messy.
Pro tip: Frame your cancellation fee as a cost-recovery measure, not a punishment.
Common Mistakes That Backfire
Let’s talk about the cancellation fee fails we see all the time, and how to avoid them:
Hidden policies
If your cancellation policy lives in a dusty PDF no one reads, it won’t stand up when clients complain. They need to see it before booking, ideally in multiple spots.
Vague language
Saying “we may charge a cancellation fee” is asking for an argument. Be clear, direct and consistent.
No rationale
Clients are more likely to respect (and pay) a fee when they understand why it exists. A short explanation goes a long way.
How to Write a Clear Cancellation Policy
Whether you're a solo creative or run a small team, your cancellation clause should cover these essentials:
Notice window
Specify the timeframe and the corresponding fee. For example:
“Cancellations made within 48 hours of your session will incur a 50% cancellation fee.”
Or, if your time is harder to rebook (e.g. event days, weekends), you might say:
“Cancellations within 7 days are non-refundable.”
Define a no-show
Be clear on what counts as a “no-show” — e.g. showing up late, or not at all.
“If you are more than 15 minutes late without notifying us, the session will be considered a no-show and a 100% fee will apply.”
Rescheduling rules
How many reschedules are allowed, and under what conditions?
“You may reschedule once, free of charge, with at least 48 hours’ notice.”
Non-refundable costs
If you’ve purchased materials, hired a venue, or booked team support, state that these costs are non-refundable.
How to cancel
Do they need to email you? Cancel via a booking platform? Spell it out so there’s no confusion.
Where to Display Your Cancellation Policy
Repetition is your best friend. Display your policy in at least these four places:
- Your website — typically in your Terms & Conditions and (recommended) in your FAQs
- Booking form — include a tick box for acceptance
- Your Service Agreement or contract
- Your invoices and (recommended) booking confirmation emails
The more visible it is, the less likely you’ll get pushback later.
What to Do if a Client Refuses to Pay
Ugh, yes. It happens. Here's how to handle it with calm professionalism:
- Start friendly: remind them they agreed to the terms at booking
- Keep it factual: don’t make it emotional
- Offer options: if you’re open to compromise, you might offer a partial credit or one-time reschedule
- Escalate only if needed: this could mean a debt recovery service, but it’s usually a last resort
Always document your communication, and keep everything in writing.
BFCM Tip: Review Your Contracts Now
Black Friday and Cyber Monday (BFCM) usually bring in a flurry of sales, last-minute bookings, and yep — cancellations.
Before the holiday rush hits, tighten your terms:
- Use plain-English contracts
- Include a clear cancellation clause
- Check your booking platform matches your policies
Protect now = less drama later.
Templates That Have Your Back
If writing legal policies makes your eyes glaze over, we’ve got you. Our done-for-you legal templates are written by lawyers and made for creative businesses like yours.
For BFCM (1–30 Nov only), get:
🎁 30% off all legal templates — use code BFCM2025 at checkout.
Best picks for cancellation clauses:
Because your time is worth protecting, legally and financially.
Final Thoughts
A cancellation fee isn’t harsh, it’s smart. With clear terms, client-friendly language, and a bit of automation, you’ll reduce awkward conversations and protect your precious time.
Got questions about your cancellation policy?
Pop them in the comments or shoot us a DM on Instagram @founddlegal. We’re here to help you get legally legit (without the legalese).
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***Disclaimer. Please read!!***
This article is for general information purposes only and should be used solely as general guidance. It does not and is not intended to represent legal advice or other professional advice.
All rights reserved. © Foundd Legal Pty Ltd
