Why Cancellation Fees Are Necessary (2024)

[textbox]Like all travel companies, we have a cancellation policy, and certain fees apply if you cancel your reservation. We’ve created this page to address some of the questions we’re frequently asked on this subject.

Travel is what’s known in business lingo as a “perishable commodity.” Just like a head of lettuce in the supermarket (and in sharp contrast to a book or sofa or computer), if a slot on one of our trip is empty when the trip begins, we’ve lost the entire cost of that slot. It cannot be sold later.

We face significant expenses associated with that empty space:

  • The fixed costs of a trip, such as guides, vehicles, and advance preparation, which now have to be covered by a smaller group;
  • The costs of accepting a reservation, processing it, then canceling it;
  • Unused hotel, restaurant, and activity costs (such as rafting) that we have paid for and committed to take, and which often cannot be refunded or cancelled.

In general, these expenses are higher as the trip gets closer, because we’re less likely to be able to fill the spot, or to cancel reservations we’ve made. The cancellation fee is our compensation for these expenses. Other companies that offer small-group adventure travel generally impose higher fees than we do. We’ve done our best to keep them as low as possible.

Can you give me a full refund if I cancel and you can fill my spot?
Sorry, no. The cancellation fee represents the average costs that we encounter from a cancelled reservation received that far in advance. If we offered a full refund when we were able to fill a spot, then we’d have to charge the full trip price (instead of just a cancellation fee) to someone whose spot we were unable to fill. We’d also have to deal with sticky questions like: If two people cancel their reservations and only one spot is filled, who gets the refund and who has to pay full price?

Instead, we find it more fair to calculate the average costs we face when a reservation is cancelled, and charge everyone equally.

I have a really good reason for canceling: (fill in the blank). Will you give me a refund?
We sympathize. We really do. We know that you wouldn’t cancel if you didn’t have to. But the cancellation fee isn’t there to punish you; it’s there to cover costs that we incurred on your behalf, by holding this reservation for you, and those costs don’t go down just because there was a strong reason for canceling.

We also don’t want to get into the business of evaluating excuses. Should you get a full refund if your mother died, but not for your uncle? What if your uncle was your primary caregiver for six months while you were growing up? Or for six years? You can see where this is leading. And then there’s the person (we all know one) whose fifth grandmother just died, conveniently right at the time that he needed to cancel a trip anyway.

Having said that: If your mother really did die, please accept our sympathies, do what you need to, and when you can, mail us documentation and ask what can be done. If it was your fifth grandmother who died, please accept our sympathies for that, too.

Should I get cancellation insurance from my travel agent?
That’s up to you, of course, and may be worth it for the peace of mind it provides. But there are a couple of factors to consider.

First, paying for insurance each time you take a trip adds up to a lot of money in the course of a lifetime. (At least, if you travel as much as we hope you do!) Are you better off putting that money in the bank, collecting interest, and using it to pay the cancellation fee on those rare occasions that you do have to cancel?

Second, be aware that most trip cancellations, in our experience, involve reasons that wouldn’t be covered by these policies anyway. If your boss decides you have to work that week (or claims you never asked for the time off), or you get a new job and lose your vacation time, or your best friend goes into the hospital and you want to be there … you probably wouldn’t be covered. Further, if you’re a gay man or lesbian, you may not get the same consideration for the illness or death of your partner as a married couple would get for one another.

In short:
Yes, cancellation fees will hurt if you must cancel a reservation, particularly on short notice. But if you plan carefully, they shouldn’t come up often. If you cancel one trip in ten, and incur a $200 fee, you’re essentially paying $20 a trip. You’ll say “Ouch!” when it happens, but that shouldn’t be enough to discourage you from planning some great trips. We hope one of them will be with us.
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Why Cancellation Fees Are Necessary (2024)

FAQs

Why are cancellation fees important? ›

Without a cancellation policy, clients may feel that they can cancel or reschedule at the last minute without any consequences. This can lead to a loss of revenue for your practice and a disruption of your schedule. 2). Having a cancellation policy helps to establish boundaries and set expectations with your clients.

Why do you need a cancellation policy? ›

A cancellation policy will hold your customers accountable and make them aware of the consequences should they decide to cancel at the last minute or not show up at all. Having clear policies and details about a booking shows professionalism.

How do I tell my client about cancellation fee? ›

How do you tell clients about the cancellation policy?
  1. Define your cancellation time frame.
  2. Define the consequences of late cancellation.
  3. Communicate each rule of the guideline with your clients to avoid any possibilities of confusion.
  4. You can ask your clients to sign a written cancellation policy.
Feb 24, 2022

Should cancellation fees be illegal? ›

Illegal Practices Under Consumer Protection Laws

Generally, businesses can't charge you an unreasonably high fee for services they didn't perform. Usually, a late cancellation or no-show fee can't be as much as the total price you would have paid for the service.

Why are cancellation fees legal? ›

To ensure that you (as a business owner) are fairly compensated for your time, and. To recoup losses suffered due to the cancellation of an appointment.

Is it fair to charge a cancellation fee? ›

This means that businesses can legally have a cancellation policy requiring customers to pay cancellation fees under certain circ*mstances, so long as the fee is not extravagant or unreasonable.

How do you explain cancellation policy? ›

To clearly communicate this information, every cancellation policy template should include these key elements:
  1. A timeframe to cancel a service with or without penalty. ...
  2. A late cancellation penalty. ...
  3. Contact information for cancellations. ...
  4. A place for a signature.
Jun 16, 2023

What is a good cancelation policy? ›

To be effective and give you the results you're looking for, your cancellation policy should: Establish a time frame (e.g., 24 hours' notice is required to cancel an appointment), Define a consequence (e.g., a $50 fee for missed appointments, or a mandatory class on the importance of follow-up care).

How do you explain a cancellation fee? ›

A cancellation fee is charged for the last-minute cancellation of an appointment without rescheduling for a later date. A rescheduling fee is charged when a client can no longer come to the initial appointment time and wants to reschedule the appointment.

How does a cancellation fee work? ›

Cancellation fees are fees charged by service providers to clients who cancel their services or bookings. The purpose of these fees is to compensate the service provider for any losses incurred due to the cancellation.

What is the meaning of cancellation fee? ›

A cancellation fee is a sum of money you must pay if you cancel a hotel reservation after the cancellation deadline.

Can you sue a company for charging after cancellation? ›

In conclusion, it is possible to sue a company for not refunding your money if they have breached their contract or violated consumer protection laws.

What happens if I don't pay a cancellation fee? ›

If you are under a contract that has a cancellation fee, and you cancel but do not pay the fee, you can be sued for this fee.

Is a no cancellation policy legal? ›

A store is legally required to post its refund policy. If the store doesn't post any return policy, the law requires the store to accept returns within 30 days of purchase. There's no right to cancel contracts or purchase agreements. Whether you can receive a refund depends on the retailer's return and refund policies.

Why it is important to have a clear refund and cancellation policy? ›

Build Customer Trust

People generally don't like to shop at stores when they don't know if the return and refund process meets their expectations. This policy creates a sense of security for customers and they are more likely to trust your business if your return procedures are clearly displayed.

Can a company have a no cancellation policy? ›

Yes, companies are legally allowed to implement a no-return policy. While no specific laws prohibit such policies, businesses must communicate their no-return policy to customers if they have one in place.

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