Should I Refund a Creative Design Fee?

I don’t want to be the bad guy.


A Splendid Note from Liene:

I’ve been fortunate to have worked with wedding pros from 94 countries over my career and I’ve heard from a ton of them this past month – all with similar questions, stories of lost business, uncertainties of what to say to clients who are completely stressed.⁣

We’re all in this together. If you have questions on Coronavirus and your wedding business, feel free to email me at hello@thinksplendid.com.

⁣I’ll be sharing my answers here on the Think Splendid blog so that everyone can benefit.⁣ I’ll also keep your name anonymous. Totally free, no strings attached – I truly do not care if you never hire me.


Focus on the Splendid

We're an industry that makes our living by celebrating life's milestones, so I'm going to start each of these update posts with a few positive COVID-19 things we can all smile about:


TOTAL GLOBAL RECOVERIES

The number of global recoveries is now more than 356,000 people, up from 301,000 on Wednesday.



Idina Menzel, Ben Platt, Rabbis David Wolpe, Sharon Brous and More Invite You to a Virtual Seder

From Jewish Journal: “Saturday Night Seder” will raise money for the Centers for Disease Control and Prevention Foundation's Coronavirus Emergency Response Fund as guests encourage viewers to donate.

“In a time of confinement and uncertainty, a rag-tag team of Jews and non-Jewish Passover enthusiasts felt it was more important than ever to channel creative energies and gather community,” head writer Alex Edelman said in a statement. “We’re thrilled to be reinterpreting the timeless story of liberation and renewal while raising money for those on the front lines enduring—and fighting—an actual plague.

The Passover seder will begin streaming Saturday, April 11th, the fourth night of Passover, at 8 p.m. ET on saturdaynightseder.com.” Also appearing are Tan France, Andy Cohen, Billy Eichner, Josh Groban, and Dan Levy, among others.



Andrea Bocelli Will Live Stream an Easter Concert from Duomo Cathedral

From NPR: “The superstar tenor will live stream an Easter Sunday concert from Milan's famed Duomo cathedral. Just like practically every other church in the world, the pews will be empty and Bocelli will be accompanied only by organist Emanuele Vianelli.

The concert will stream live on Bocelli's YouTube channel Sunday, April 12th at 10 a.m. ET. Bocelli said he hopes that the Easter concert, which will consist mostly of spiritual songs like "Ave Maria," will provide some comfort to viewers regardless of their religion.”



Splendid Q+A on Coronavirus and Your Wedding Business


This question is from a wedding planner and designer in New Zealand


I have a client who was set to have her wedding in New Zealand but traveling from another country for it.

She has paid a deposit and we have conducted a site visit 600+ km (round trip) out of town, put together a storyboard, and a custom quote for her. She has unfortunately come to the inevitable conclusion that her wedding will not take place this year, which is completely understandable.

She has approved, and signed off earlier this year, that her deposit is non-refundable after 7 days . . . BUT under the circumstances, what do you think I should do should she ask for a refund?

Ideally, I do not want to give her a refund, but I am willing to compromise due to the current climate. I would still love to keep her as a customer, but should the conversation be about her wanting a refund, how should I proceed?

The only thing I am concerned about is my reputation at this stage and coming to a fair decision about her refund should she be asking for a refund on her deposit. I don’t want her to regret dealing with us . . . and I don't want to be the bad guy here.

I am set to speak with her executive assistant tomorrow about the deposit and her wedding not taking place any time soon, and would really appreciate some feedback on how to troubleshoot this situation.



Answer from Liene


The destination wedding market has an added layer of complexity when it comes to encouraging postponements over cancellations because of the fact that all of the couple’s guests will be traveling to attend.

We’ve talked previously about the fact that humans are irrational beings by nature and that we make emotional decisions, even when we think we don’t. Even though humans are resilient, I do believe that we are going to see a certain level of trauma (including survivor’s guilt for some, which we’re already seeing) in the aftermath of all of this and that it will take some time for people to work through and disentangle themselves from their fears.

Some people will be ready to hop on a plane right away. For everyone else, the tourism and hospitality industries will create massive PR campaigns to help them feel comfortable traveling again.

While I do think your first plan of action should be to encourage the client to postpone rather than cancel her destination wedding, it is understandable if she ultimately decides that holding it closer to home is the better consideration for the people in her life.

If your client is not open to holding her destination wedding in New Zealand at a later date nor in having you travel to produce her wedding in the new location, here are some options when it comes to deciding how to handle her non-refundable deposit on the work you’ve done:

1) If you are NOT in a financial position to give a refund on the work you’ve already done, then it is okay for you to stick to the terms of the original contract. You have bills to pay and rely on that income. 

Keeping the non-refundable deposit is not “being mean” and you can appeal to her business acumen (I’m making a broad assumption here based on the fact that she has an executive assistant) by sharing that your operational structure depends on the cashflow from these deposits.

While I don’t advise oversharing the grittier details of your finances, I do think the clients whose own careers involve making high-level financial decisions sometimes “get it” better than other clients whose jobs don’t include that type of work.

2) If you ARE in a position to give a refund, then I believe it's a goodwill gesture to do so. These are difficult times for everyone and being generous is a valid route to take. 

Again, this is only if you are in a financial position to do so. Well-intentioned generosity can quickly turn into codependency if you are harming yourself to help someone else. The quote, "Don't set yourself on fire trying to keep others warm," applies here.

3) You can also choose to give a partial refund. The wedding may no longer be happening, but you have started working on it, including an out of town site visit.

That is a not insignificant investment of time and creative work on your part. Giving a full refund on the deposit would mean you would have done that work for free. 

4) If you haven't yet handed over any design ideas or creative assets (storyboard, etc), you do not have to give them if you do agree to a full refund. These are still your intellectual property and if you are not getting paid, she is not entitled to them.

Again, you can choose to be generous here (and I personally would), but you know your client and your market best.

If, based on your past interactions with her, you are concerned about her hiring a direct competitor and giving them your work, concepts, and any other proprietary process information, then you are well within bounds to keep those assets if giving a refund.

Part of the reason for these types of creative fees and deposits is to protect you from this happening when times are normal – that way if you put in the creative work and the client decides to “go in a different direction” with someone else, you are still getting paid for your ideas and the time invested, even though you didn’t end up producing the full wedding.

5) The reputation factor is definitely worth thinking about as well. If you have a good relationship with this client and want to preserve it and any good word of mouth, it's better to err on the side of generosity, if doable.

That said, if she is being a bully (or has her executive assistant do her bullying for her), then that type of behavior shouldn't be rewarded, in my opinion.

Even though you are doing them a favor by refunding money you contractually don’t have to, bullies don’t care and will never show gratitude by spreading good worth of mouth or referring you future business.

 

*As always, this isn’t legal advice. Make sure you run your specific situation past an attorney who knows your local laws and understands your business.

 

More questions?

When I say we’re all in this together, I mean we are all in this together. I am not a blogger, I am a business consultant and speaker. This blog is not sponsored nor ad supported and is not how I make my income. Since we are all in this together, I am not charging consulting fees to answer questions related to COVID-19.

I will continue answering Coronavirus-related wedding business questions from ANY wedding, event, or hospitality professional, located anywhere in the world, here on the blog over the next few weeks and possibly longer, so that anyone, anywhere in the world can access the information they may need for their business at any time.

I’ll be continuing to work through the questions sent in so far here on the blog so that we can all navigate this together as best we can. Please send any questions you have to hello@thinksplendid.com and remember there is no such thing as a dumb question.

I’ll be keeping the names anonymous so you don’t have to worry about being attached to a question in a Google search or in case you don’t want a colleague or competitor to know what’s on your mind.


Written by
LIENE STEVENS

Liene Stevens, the founder and CEO of Think Splendid, is an author, speaker, and award-winning business strategist. Armed with $2000, a healthy work ethic, and an undeserved dose of privilege, Liene bootstrapped Think Splendid from a scribble in a notebook to a successful wedding business consulting firm with a client list spanning 94 countries.