Can You Charge A Cancellation Fee For A Workshop?

Yes, you can usually charge a cancellation fee for a workshop in Australia - but only if the fee is fair, clearly disclosed and not used to take away rights your customer has under the Australian Consumer Law.

That means a well-written cancellation policy can protect your business from empty seats, wasted materials and last-minute changes. But a blanket no refund rule or a harsh fee that looks more like a punishment can cause problems.

The key is to match your terms to how your workshops actually run: how far in advance you buy supplies, whether you can fill a cancelled spot, and what happens if you need to cancel or reschedule.

Can You Charge A Cancellation Fee In Australia?

Yes, you can charge a cancellation fee in Australia if your customer agreed to it before booking and the fee is reasonable in the circumstances.

For workshops, classes and events, cancellation fees are usually dealt with in your booking terms and conditions. These might appear on your website checkout page, booking form, invoice, ticketing platform or customer agreement.

Your terms should be shown before the customer pays. If you only mention the fee after they ask for a refund, it will be much harder to rely on it.

Under the Australian Consumer Law, cancellation fees are more likely to be acceptable where they reflect a genuine business loss or cost. For example, your fee might cover:

• venue hire you can't recover
• materials purchased for that attendee
• staff preparation time
• payment processing or booking platform costs
• the loss of a seat you couldn't resell
• reasonable admin time to process the cancellation

A fee is more risky if it's out of proportion to your actual loss. For example, keeping 100% of a $400 workshop fee when the customer cancelled three weeks out and you immediately resold the place may be hard to justify.

So, when customers ask, can you charge cancellation fee Australia wide, the practical answer is yes - but the safer approach is to make it transparent, proportionate and linked to the cost of the cancellation.

When Is A Workshop Cancellation Fee Reasonable?

A workshop cancellation fee is more likely to be reasonable when it reflects what the cancellation actually costs your business.

There isn't one fixed dollar amount that works for every workshop. A $50 fee might be fair for a low-cost online class with minimal preparation, but far too low for an in-person workshop where you pre-order specialist materials for each attendee.

Think about the timing. A cancellation seven days out is different from a no-show ten minutes after the class starts.

A common approach is to use tiers, such as:

• More than 7 days before the workshop: refund minus a small admin fee
• Between 48 hours and 7 days before the workshop: partial refund or credit
• Less than 48 hours before the workshop: no refund, or refund only if you fill the spot
• No-show: no refund or no credit, if this was clearly stated upfront

Here's a worked example.

Say Maya runs a pottery workshop in Melbourne. Each ticket is $160. For each attendee, she buys $35 of clay and glaze, pays a $5 booking platform fee and spends time preparing individual workstations. She also pays fixed studio hire whether the class is full or not.

Maya's policy says a customer who cancels more than 7 days out receives a refund minus a $20 admin fee. A customer who cancels 2 to 7 days out can receive a 50% refund or transfer once to another date. Less than 48 hours out, there's no refund unless Maya can fill the seat from her waitlist.

If a customer cancels 3 days before and Maya resells the seat, keeping 50% may be harder to justify. A better outcome might be to refund the customer minus her unrecoverable costs, such as the booking fee and admin time.

Can You Have A No Refund Policy For Workshops?

You can have a no refund policy for change of mind cancellations, but you can't have a policy that says customers never get refunds in any situation.

This is where many workshop businesses get caught. A sign or website statement saying no refunds under any circumstances can be misleading under the Australian Consumer Law.

Your customer may still have rights if there's a major problem with the workshop. For example, they may be entitled to a refund if:

• you cancel the workshop and don't offer a suitable replacement
• the workshop is materially different from what you advertised
• the service isn't provided with due care and skill
• the workshop isn't fit for a purpose the customer made known to you
• you can't supply the workshop within a reasonable time, where no time was agreed

For example, if you advertise a full-day barista training course with hands-on machine practice, but the class becomes a 90-minute lecture with no equipment, a no refund term won't fix that problem.

On the other hand, the Australian Consumer Law doesn't usually give customers a refund simply because they changed their mind, double-booked themselves or decided they no longer want to attend. That's where your cancellation policy does the heavy lifting.

A safer way to word your position is to separate change of mind cancellations from your consumer guarantees policy. For example, your policy can say refunds for change of mind are handled under your cancellation terms, and nothing in the policy limits rights under the Australian Consumer Law.

What Should Your Workshop Cancellation Policy Say?

Your workshop cancellation policy and refund policy should clearly explain what happens when a customer cancels, doesn't show up, asks to reschedule, or when your business needs to change the event.

Keep it simple enough that a customer can understand it before booking. If your policy is buried in dense terms or shown only after payment, you may struggle to rely on it later.

Here's a practical outline you can adapt. A lawyer should tailor it before you use it, because templates often miss the details that matter for your workshop model.

1. Workshop Details: Explain what the booking covers, including the date, location, format and any included materials.
2. Payment Terms: State when payment is due and whether any deposit is refundable or non-refundable.
3. Customer Cancellations: Set out refund, credit or transfer options for each notice period.
4. No-Shows: Explain what happens if the customer doesn't attend and hasn't contacted you.
5. Rescheduling By The Customer: State whether transfers are allowed, how much notice is needed and whether a fee applies.
6. Changes By Your Business: Explain your process if you cancel, postpone, change venue or change the facilitator.
7. Consumer Law Rights: Confirm that your policy doesn't limit rights under the Australian Consumer Law.
8. Waitlists And Resold Places: Explain whether a refund or credit changes if you fill the customer's spot.
9. How To Request A Refund Or Transfer: Give a clear email address or booking process and say what information the customer should provide.

Try to avoid vague wording like cancellation fees may apply. If a customer can't work out what they're agreeing to, the term is more likely to be challenged.

Your policy should also match your actual process. If your team regularly gives credits outside the written policy, that's fine - just make sure you're consistent and keep records of what was offered.

What Happens If You Cancel Or Reschedule The Workshop?

If your business cancels or significantly reschedules the workshop, you'll usually need to offer a fair remedy such as a refund, replacement session or suitable credit.

The best option depends on why the change happened and what your terms say. But you shouldn't assume you can keep the full fee just because your policy says all bookings are final.

If you cancel because you didn't get enough bookings, double-booked the venue or can't provide the promised facilitator, customers will generally expect a refund or a genuine choice to move to another date.

If something outside your control happens, such as severe weather affecting an outdoor workshop or a venue suddenly becoming unsafe, your force majeure or event changes clause may help. Even then, the term needs to be fair and transparent.

When something goes wrong, deal with it in this order:

1. Check your booking terms, customer contracts and what you promised in your marketing.
2. Work out whether you can offer the same workshop on a new date.
3. Tell customers promptly and give clear options.
4. Keep a record of notices, emails, refund requests and credits offered.
5. Refund money you aren't entitled to keep under your terms or the Australian Consumer Law.

For example, if you move a Saturday photography workshop to a weekday and several customers can't attend because they work, it may not be fair to treat that as a normal customer cancellation. A refund or credit will usually be a cleaner business outcome.

What About Deposits, No-Shows And Unfair Contract Terms?

Deposits, no-show fees and strict cancellation terms can be legal, but they need to be drafted carefully so they don't operate unfairly.

A deposit can help you secure a customer's commitment and cover upfront costs. If you call a deposit non-refundable, make sure the amount is reasonable and the customer sees that term before paying.

For no-shows, your position is usually stronger if you reserved a limited place and couldn't fill it at short notice. A cooking class with 12 seats and pre-purchased ingredients is a good example.

Your position is weaker if the fee gives you a windfall. If the class was online, recorded, unlimited in capacity and you didn't incur extra costs for that attendee, keeping 100% may be harder to explain.

You also need to think about unfair contract terms. Since 9 November 2023, unfair terms in standard form consumer and small business contracts can attract penalties under the Australian Consumer Law. For companies, penalties can be very significant, including up to $50 million, three times the benefit obtained, or 30% of adjusted turnover during the breach turnover period, whichever is greater.

A cancellation term may be unfair if it:

• lets you keep all money paid no matter what happened
• allows you to cancel for any reason without giving the customer a similar right
• changes the workshop in major ways without a refund option
• hides key fees in fine print
• creates a big imbalance between your rights and the customer's rights

The fix isn't to avoid cancellation fees altogether. It's to draft them so they protect your business without going further than needed.

Key Takeaways

• You can usually charge a cancellation fee for a workshop in Australia if it's clear, agreed upfront and reasonable.
• A blanket no refund policy can be misleading if it suggests customers have no rights under the Australian Consumer Law.
• Your fee should reflect real costs, such as materials, venue hire, admin time and the chance of reselling the seat.
• Deposits and no-show terms can work well, but they shouldn't create a windfall for your business.
• If you cancel or significantly change the workshop, customers may be entitled to a refund, credit or replacement session.
• Since unfair contract term penalties now apply, standard booking terms should be reviewed carefully before you rely on them.

If you'd like help with your workshop cancellation policy, booking terms, refund wording or customer agreements, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.