"What If Something Goes Wrong" - Buyers Always Worry About This

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Thoughts On The Dreaded Refund

Refunds and requests for refunds, are part of the business. No client wants to lose money. As a business grows larger, so does the chance of being confronted with a request or demand for a refund. Most caterers view the client’s request as a personal loss, or even as an insult towards the company. This should not be a professional caterer’s attitude. All refund requests are not equally valid; sometimes you need to hold firm on not giving them.

There are at least two types of refund situations. The cancellation refund is when event is just not going to take place or is cancelled. Sometimes the caterer can’t rebook the date or the ballroom, resulting in a loss of profit. The performance refund is when the customer believes—true or not—that the caterer has placed them in a bad situation during the execution of the event. A performance refund might be demanded for such things as running out of some food items, stale rolls, the wrong color frosting on the cake or an unprofessional staff member.

When you are faced with a refund situation, ask yourself:

1. Why is this particular refund happening? Did the wedding couple break-up? Was there bad weather? Was the cost of the event too high for the client? Is there a rumor going around about my company? How many extra people did they invite that weren’t in the guarantee? Is my customer being influenced by anything that I said or did before the event?

2. What are my real losses? Is the event canceling with just two days to go, or is it six months out? Can I resell my space or date? Are they leaving me and moving to a competitor? Can I get credits from my suppliers? Can the stuff I already bought for this event be used at a later date for another catering?

3. What are the consequences to my business if I don’t handle this refund properly? How will my image be affected if I say no to the refund request? How will it be affected if I say yes? Is this a local group? What will future customers do if they find out what I did for someone else? Will it save my relationship with this buyer?

4. What is the potential refund? Do I need to give it all back? Does it have to be cash, or can I give a credit towards a future event? Can I just send some extra food after the party? Do I send cash or food?

5. How should the refund be paid? Should it be a credit towards a new event? Should it be paid back only if the date is resold? Can I give them a refund account to eat in my restaurant? Can I make a donation to a charity in their name? Can I give them more food? Should I deduct a professional fee from the refund amount for my planning time? Did I give them anything free during the planning and selling that I can now charge again.

6. What are the real costs associated with this refund? What are the chances that I won’t be able to resell my date or space? Do I still have to pay for any staff because the cancellation came so close to the date? How much volume will I lose from the community once they find out about my problem?

Refunds are not a happy topic for either caterer or client. When money and image are very important, a caterer needs a policy that is fair to both parties. (Some states and cities have laws pertaining to the amount of money that a caterer can keep if an event cancels.)

My Very Cool Additional Phrases for Proposal/Bids

These are some of my favorite phrases to use in bid/proposals. You might add one or more of the following phrases to your proposals:

a) “Your price of $85 per guest is guaranteed for forty-five (45) days until October 3. After this date, a review needs to be done to assess any increases in cost.”

b) “When you call us, please use this special number, 555-5555, which will place you with my associate, Gregg Jones.”

c) “Gratuities are not required, but are graciously accepted by the staff.”

d) “Most important, we assume all responsibilities for planning and coordinating the total flow of your event.”

e) “All of our ingredients are fresh. All of our portions are generous and you may be assured of ample quantities for your invited guests.”

f) “We take pride in understanding and anticipating the special needs of our clients. We make them partners with us in creating memorable and treasured events!”

g) “The menu enclosed has been customized for you and reflects our earlier discussions. However, I will gladly make any adjustments you wish. The menu and services have been priced according to the number of guests you are presently estimating.”

h) “All other charges for equipment rentals, flowers, music, etc. will be on your final invoice or billed directly by our affiliate companies. Please note that we accept major credit cards for payments of deposits or invoices.”

i) “The staff will leave your event at 1 A.M. and will cost $685 per hour for the eight hours of service. In addition, a 12 percent Social Security and Unemployment Tax fee and a $20 gratuity will be charged.”

j) “Enclosed, please find a statement of insurance from our insurance carrier. We want you to know that all ABC Catering staff working at your event are legal employees and not independent contractor casual labor. This means that, since they are covered by Workmen’s Compensation, you are protected from possible claims by staff for any injuries that might happen while at your event.”

k) “Once you have booked with us, you will receive unlimited phone assistance to confirm and reconfirm each and every detail.”

l) “Over the phone yesterday, you mentioned the need for keeping costs down at your event. Bob, you’re not alone in your wish. Most of our clients are voicing the same concern for value and lower-cost impact ideas from us.”

m) “Just in case you need me before or after regular business hours, my cell number is 555- 5555 and my home number is 555-5551. My children are up at 6 A.M. each morning . . . feel free to call!”

n) “One reason for our company’s success is that our planning department has the total support of our culinary team.”

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Make Your Policies & Rules Part of the Sale's Presentation & Paperwork

Let buyers know and understand all your rules, policies and expectations during the selling process instead of describing them after the sale is made. Explain your rules and remedies in a casual and professional manner that lets the buyer see that you are aware that these types of things sometimes happen and, as a professional business, you have solutions and options for them if and when they do.

Examples of talking points would be deposits, guarantees, damage to property, overtime (if needed) for staff, and a bunch more. Some caterers simply place a sheet of paper (single page) in front of the prospect and explains them. Yes, one can get in "trouble" by doing this, so you need to think this out carefully.

What a caterer doesn’t want is for a buyer to say, "I didn’t know about this rule.” Or, “Why didn’t you tell me this before I purchased?” Often, the issue is not who is right or wrong when problems arise, but whether the caterer’s image will suffer as a client shares anger and disappointment with the community.

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Sample Copy for Contracts/Agreements - #5 - Miscellaneous

These are simply educational examples of possible contract language. Don’t use any of these clauses without approval from your attorney.

Miscellaneous

a) All food for the event must be supplied by (caterer) or a licensed vendor approved by (caterer).

b) If the venue does not provide garbage and recycling service, we will arrange for the garbage to be removed. Garbage removal prices will be quoted. Garbage or recycling materials may not be transported in (caterer) vehicles.

c) Gratuities are not automatically added to your invoice unless we are specifically instructed to do so. They are left to your discretion.

d) Exact amount due will be calculated after final count, exact menu, etc. is determined, ten (10) business days prior to the event. A 20 percent surcharge will be added if more than a 5 percent higher count arrives on the day of the event.

e) Should the host choose to engage outside vendors directly to provide decorations etc., it is the host’s responsibility to ensure that the vendor follows all fire codes, safety codes and health department regulations. The host will require the vendor to schedule a meeting a minimum of one month prior to the event in order to determine that the installation of decorations etc. will be allowed by (caterer). The use of rice, birdseed or confetti will result in a $200 cleaning fee.

f ) (Caterer) reserves the right to refuse service, exclude or remove from the premises any individuals who in (caterer) sole discretion violates the conduct requirements established by county and state laws. (Caterer) appreciates and expects the host’s assistance before a situation elevates to that level. The host’s cooperation to prevent underage drinking is requested. The bar will not be open beyond the end time of the event and in accordance with state law the bar must close no later than 1 A.M. and guests must leave the premises no later than 1:30 A.M.

g) Food put out for service but not consumed remains the property of (caterer). Wedding cake remaining is available to the host. No open bottles of alcoholic beverage may leave the premises with guests or host.

h) The following are prohibited at (the facility): an open-seating format for receptions, use of bubbles indoors, open flames, scented candles, use of silk petals outdoors, confetti and/or glitter. Aisle runners are strongly discouraged as they often lead to stumbles.

i) The state sanitary code prohibits us from providing “doggie bags” or leftovers for your guests. There is a concern about food borne bacteria. The exception to that rule is if we cater a function in your home. Providing that the food has been maintained in the safe zone (a state-mandated range of temperatures), we are allowed to transfer excess food directly to your refrigerator. Our staff is instructed to maintain strict compliance with this policy. Leftovers from events are donated to area shelters and homes.

j) We reserve the right to refuse alcohol to anyone who, in our opinion, appears to be under 21 years of age, cannot produce a legal ID or is intoxicated. Our discretion prevails. In such instances, the host will be notified and the situation will be handled tactfully and discreetly.

k) (Caterer) reserves the right to adjust pricing for any requests to alter or in any way change the menu after this agreement is signed. (Caterer) uses the highest quality product and vendors. Should there be a local, regional or national shortage or substantial price increase of one or more of the ingredients of the selected menu (caterer) additionally reserves the right to offer a comparable or equivalent substitute for the approval of the host.

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Sample Copy for Contracts/Agreements - #4 - Payment

These are simply educational examples of possible contract language. Don’t use any of these clauses without approval from your attorney.

Payment

a) An initial payment of $1,000 is required to reserve your date. One half the projected total is due sixty (60) days prior to your wedding. The balance is due seven (7) days before the event. If payments are not received at scheduled times, the event will not take place.

b) Weddings must be paid in full ten (10) days before the event. This payment will represent 100 percent of the estimated bill with any balance payable upon conclusion. A credit card number will be kept on file to cover any incidentals or for additional deposits or final payment. All payments are payable to (caterer). Checks are required for the original deposit; checks and major credit cards are accepted for the 50 percent deposit and final payment. The 50 percent deposit and final payment must be remitted within ten (10) days of notification. Failure to pay will result in the credit card on file being charged in the amount owed.

c) At the time of booking, a $1,000 deposit is required to secure your date. This deposit will be applied against your final bill. This deposit is non-refundable. A second payment of $3,000 or an estimated 25 percent of your remaining balance will be due 90 days prior to the function. A notice regarding the second installment will be mailed. As above, this payment is non-refundable and will be applied against your final balance. The remaining balance is due one week prior to the function. We will bill you after the function for any additional expenses incurred the day of your event. Deposits and final payments may be made by cash, bank check or credit card. We accept Master Card, Visa and American Express.

d) Client agrees to pay the final balance three (3) days prior to (date) by cash, cashier’s check or wire transfer. Full final payment must be received by (date).

e) Client agrees to pay (caterer) for any meals provided to musicians, photographers or any other persons retained by the client to provide services during the course of the event at the rate of 50 percent of the per-guest charge. Except for youth events such as first communions and bar mitzvahs, children ages 10 and under are also bill.

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Sample Copy for Contracts/Agreements - #3 - Damage To Property

These are simply educational examples of possible contract language. Don’t use any of these clauses without approval from your attorney.

Damage To Property

a) Customer understands that all property brought to the event location, including but not limited to all serving equipment, floral arrangements, skirting and linens, non-floral centerpieces, and all other property belonging to caterer, shall be removed by caterer at conclusion of the event.

b) In the event that any of the caterer’s property delivered to the event location is broken, stolen, or missing, whether due to actions of customer, their staff, or guests, the customer will be responsible for replacement cost of any such property. In the event that such loss is due to the caterer, the client will not be liable for replacement.

c) Client understands that all of the caterer’s property will be removed at the end of the event. If the customer requires, or asks, for any of this property to be left behind, the client shall be charged an appropriate fee for use of this property.

d) (Caterer) is not responsible for items broken or lost by vendors or sub-contractors.

e) Host is responsible for persons attending the event and assumes liability for any and all damages they may cause. We regret that (caterer) is not responsible for any loss or damage to client’s and guests personal property.

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Sample Copy for Contracts/Agreements - #2 - Cancellation

These are simply educational examples of possible contract language. Don’t use any of these clauses  without approval from your attorney.

Cancellation and Postponements

a) Customer understands that once a contract is signed, the caterer may decline other profit-making opportunities for that day. Accordingly, the client will be responsible for the entire contract cost even if the event is cancelled.

b) Customer understands that as the event date comes closer, the caterer has hired event staff, purchased foods and beverages and contracted for kitchen labor. Accordingly, the client will be responsible for the entire contract cost even if the event is cancelled.

c) If the client notifies the caterer in ample time, the caterer will make every effort to rebook the date or lower the amount of the loss. In this case, these savings will be passed along to the client.

d) If the client’s guest count drops more than 40 percent from the original guarantee, the caterer has the right to cancel the contract unless a higher price is negotiated to offset the loss of profit.

e) In the event that a client cancels the function with not less than two weeks prior to the date, 50 percent of the deposit will be retained by the caterer. If the event is cancelled with less than one week notice, the client will be responsible for the entire amount due.

f ) In the event of the cancellation of your reception within thirty (30) days after booking, the full initial payment will be refunded. If cancellation occurs more than 30 days after booking, appropriate administrative costs will be deducted. Receptions cancelled less than sixty (60) days prior to the event will forfeit all deposits. Rental charges, with the exception of tent deposits and specialty linen rental will be removed from the total invoice if notice of cancellation is received ten (10) days in advance of your event.

g) As we have already established a relationship, (caterer) will apply one half of the reservation fee already paid and all additional payments to your new date. Should we be able to book your original date with a comparable event, (caterer) will apply all payments to your new date, less a $250 administrative fee. Should you wish to reschedule your event, we will make every effort to accommodate your request.

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Sample Copy for Contracts/Agreements #1- Count & Guarantee

These are simply educational examples of possible contract language. Don’t use any of these clauses without approval from your attorney.

Customer Count and Guarantees

a) The number of guests listed on this contract shall be paid by the customer, even if the number of guests served is lower than the guaranteed number.

b) All costs are based on the guarantee given. However, a customer may reduce the given guarantee by up to 10 percent, as long as the customer notifies ABC Catering of the reduction more than 72 hours before the event.

c) Caterer has extensive experience in determining and preparing the correct amount for each menu item for the guaranteed group size. It is our custom to prepare enough extra to feed groups that eat more than the usual amount of food. However, in no case are we required to have extra food for numbers higher than the guarantee given.

d) Customer agrees to pay additional, at the agreed per-guest price, for any guests that increase the guarantee, even if the food is available.

e) If the final guest count is 10 percent greater than the guarantee, an additional 10 percent service charge will be paid by customer to cover the extra burden placed on the staff at the event.

f ) Customer agrees that the caterer will retain all foods and beverages remaining at the conclusion of the event that have been brought by the caterer.

g) The final count, or guarantee, is due seven business days in advance of the event. Following the final count, the number may not be lowered, but may be raised. A 15 percent surcharge may be added to cover additional last-minute expenses of acquiring added food and beverages for the additional guests.

h) To facilitate our ordering, we require your confirmed minimum number of guests ten (10) days prior to your event. This number may not be decreased. Our quoted prices reflect current market conditions for food and services. Menu substitutions may be made of equal or superior quality without notice due to product availability.

i) A confirmation of the guest count shall be made no later than fourteen (14) days prior to the event date. Thereafter, the number may be increased at the quoted per person cost, but not decreased. (caterer) will be prepared to serve a maximum of 5 percent over the guaranteed count. Additional place settings will be charged at an additional $6 each. Children under age 10 and vendors will be charged 50 percent of the menu price and given a special beverage rate. All food and beverage must be purchased from (caterer) and consumed on the premises.

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