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Deposits
Whenever I send an agreement to a client, it includes a deposit amount. But I’m wondering if I’m not going about it the right way.
Normally I ask for a credit card to pay the deposit when they sign the agreement. However, if they cancel, they get the entire deposit returned with the exception of any out of pocket costs I incur.
But what happens when you’ve booked a subcontracted crew for a day 20 days out. That crew starts turning down other jobs because I’ve locked them in. Then the client cancels the job. It doesn’t seem that there’s any penalty for the client, yet I and my crew have lost 2 jobs as a result.
How do you handle deposits? If I agree to purchase a car, an the seller takes it off the market, then I cancel the deal, I’m pretty sure I won’t get my deposit returned. True?
So with that in mind, how do you folks add deposits to your contacts? Are they non-refundable?
Greg Ball, President
Ball Media Innovations, Inc.
https://www.ballmediainnovations.com -
5 Replies
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[Greg Ball] “…how do you folks add deposits to your contacts? “
Easiest question I’ve been asked all day.
Well, honestly, we’ve never requested or required deposits. We probably should, and might in the future… but haven’t so far.
We’re probably too trusting here, but so far we’ve been lucky. In 21 years we’ve only been stiffed on two bills, and they were very small, less than 3K. With one we eventually got most of it paid, although it took months.
The other, I never saw a dime on. And the client was my first cousin. Lesson learned.
T2
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Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com
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Thanks Todd,
I too have never been burned because I have a contract and deposit. In my case I pay my crew at the end of the shoot.
I’m not in position to finance a clients project. I always need to at the very least cover my out of pocket costs. If I get burned on my rate, that’s okay. But I can’t be left holding the bag for crew or acting talent.Greg Ball, President
Ball Media Innovations, Inc.
https://www.ballmediainnovations.com -
I think you just answered your own question, Greg. You are neither a bank, nor an insurance company.
If the job requires booking additional people and services, you ask those folks what *their* cancellation terms and fees are, and add them to the deposit. This business runs on trust and personal reputation, or it doesn’t run for very long, so you must cover all your subs, every time, or they won’t come back for the next gig.
Then when you’re truly up against a wall and need some mercy from these same craftspeople, you’re much more likely to get it. They all talk, they all network. You stiff one, they’re all gonna know it.
A businessman’s word is his most precious currency.
Now, could some weasel underbid you by not covering these bases? Maybe. But when things go wrong, they will go spectacularly wrong for that guy. You’ll be positioned to parachute in and save the day. Or sweep up what’s left of the weasel.
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More important than a deposit is explaining to the client in writing the purpose and refund policy. I have had projects that were cancelled at the 11th hour but we already rented equipment and reserved freelance crew. I make sure to tell my client that after a certain point in time there may be some non-refundable expenses.
Get everything in writing.
Mike Cohen
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Thanks Mike. We always get everything in writing. But the hard part is booking a crew a month or more out, then finding the client decides to cancel. I’m wondering if there should be a non-refundable deposit. After all, we are turning down other work because we have that shoot scheduled and a signed agreement.
Greg Ball, President
Ball Media Innovations, Inc.
https://www.ballmediainnovations.com
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