Taking deposits is becoming increasingly normal in restaurants, hotels and other 'service' based industries.
They, like salons, are selling time. If a client doesn't show up or cancels last minute; you can't ‘re-sell’ that time and that time continues to cost money (rent, utilities, wages etc) which is why it's important to have protection
Does Card Capture protect you?
The short answer is no, not always.
Card capture involves simply storing the clients bank details, not taking any actual payment; therefore protection is not guaranteed.
There are 2 main loop holes:
Under The Data Protection Act 2018, clients are legally allowed to request the deletion of their personal data. This includes card details. Clients can request you remove their card details from the system even if they have a future booking which means you are no longer protected
Clients are not obliged to ensure there is money in the bank account and there is no way to check there are sufficient funds to cover any no show or cancellation fees. For example at time of booking the client might have £200 in the account. When try to charge their card in the event of a cancellation, the client may have spent £200 and the balance is £0 which means you can not charge that card and therefore you are out of pocket
My clients don't like deposits
A 2019 study by Slick showed that just 2% of clients said they would be put off by paying a deposit. The same 2% who said they didn't like paying a deposit were 12X more likely to cancel last minute or no-show!
If clients want to book your time and are intending to show up then they will have no issue paying a deposit. Only those who are likely to cancel last minute or no show on the day will kick up a fuss.
You pay for your hotel or flight up front; that doesn't mean EasyJet or Hilton Hotels don't trust you. It means they need to protect their business.
The rise of micro deposits: a half way house
We're seeing more and more salons take micro deposits in-store.
A micro deposit is a payment of say £1 or £5 for example
Why?
It allows you to verify they have cash on that card. If a client gives you an old card with £0 on it then the payment will fail so you can ask them for another card that does have money.
This allows you to have best of both worlds:
you have a deposit which increases chance of client attending by 70%
you know the card has money
you have card details should you wish to charge full amount later
Your are in control. You ask selected clients for a micro deposit. Regulars won't receive a request for their details.