Here at Charter Fishing Business, we’re frequently asked whether a charter captain should take deposits when booking trips. I recommend that you take a Deposit whenever possible but you should also remain flexible and “go with your gut.” Let me explain.
Time Is Money
It bears repeating: Time is Money. To extend that cliche even further, your Booking Calendar is Money. Every day that you are not fishing, you are not earning money. Furthermore, if a client is booked but either cancels at the last minute or does not show up at all, you’ve also lost the ability to earn money for that trip. What’s worse is that you likely had to turn down other potential clients for that day since you were booked. This is called “Opportunity Cost.” What can you do to ensure that your client will show up at the dock?
Request a Deposit
Nearly every service that you can reserve these days requires a deposit of some kind. Whether you’re booking a hotel room, airline flight, luxury cruise, even having your car detailed, the service provider requires a deposit in order to reserve the date and time of the service.
Take a hotel, for example. A hotel has a finite number of rooms to rent every night. If a customer reserves a room yet does not show up to occupy that room, the hotel loses not only the nightly rental revenue but also the opportunity to rent that room to someone who could have shown up to stay in the room. The rent for that room cannot be recovered for the room that the customer did not occupy because you cannot turn back the clock. Therefore, the hotel charges the customer a deposit to increase the likelihood that the hotel guest will show up to occupy the room. If the guest does not show up, the deposit if forfeited to the hotel. Keep in mind that the hotel would prefer that the guest arrive to stay in the room. Hotels do not make money by keeping deposits. Deposits are merely a way to motivate the guest to occupy the room on the date of the reservation.
The same holds true for your charter business. You would rather take a client fishing to build up your client base and to set the table for a relationship that might lead to recurring trips. (Keep in mind that recurring customers are the Holy Grail of Charter Businesses as you’ve maximized your marketing efforts – any subsequent trips with a recurring customer cost you ZERO in marketing costs.) The most effective way to get your first-time clients to show up at the dock is to charge a deposit at the time of booking. Charging a deposit is also an effective way to “smoke out” the true intentions of the potential client.
How do I Ask for a Deposit?
Let’s walk through a typical call from a potential client: The interested person asks you a myriad of questions regarding your boat, the species of fish, length of the trip, the cost of the trip, etc. After a few minutes, the time comes to find out whether the caller is ready to “fish or cut bait.” You ask the caller for a preferred date to fish. If the caller gives you a date, then you immediately request a deposit – this can be for a portion of your charter fee, perhaps $100 or $200. Remind the caller that this is a Non-Refundable Deposit! This will allow you to determine whether the caller is serious or is just window shopping. You would be amazed by the lengths to which potential clients will go to shop around for a fishing charter!
You might receive resistance from the caller. That’s fine. This could be a telltale sign that the caller is either a window shopper, a cheapskate or a potential nightmare once they jump on your boat. At this point, go with your gut but I suggest that you politely inform the caller that taking a deposit is your policy and that they are welcome to call you back once they’re ready to give you a deposit. Most, if not all, of your competitors are taking deposits so you should not feel as though your’re putting yourself at a competitive disadvantage.
Taking the Deposit
Once the caller or potential customer agrees to give you a deposit, remind them that the deposit is only necessary to reserve the charter trip and will be refunded once they step foot aboard your vessel. You’ll need a payment method to receive the deposit. Some options include PayPal, Person-to-Person payment solutions such as Venmo or those offered by your bank, Square or a Point of Sale (“POS”) solution that your bank may offer.
Remember: You want to make this process as painless as possible for your client. Only ask you client for the absolute minimum information in order to process the deposit:
- Card Number
- Card Expiration Date
- Name on the Card
- Billing Zip Code
- Security Code on the Card
Then, be sure to send the client a receipt, usually via e-mail or text message. Again, make this as easy as possible. That’s it! You’ve booked a trip on your calendar.
You Can Be Flexible Too
Even though I just outlined a “hard line” approach to requiring deposits, you may develop a sixth sense over time to determine whether a potential client requires a deposit to show up at the dock. You’re taking a chance by not requiring a deposit but trusting that client may lead to bigger tips and recurring trips because they appreciated your leap of faith.
You can also be flexible when it comes to refunding the “non-refundable” deposit. There are going to situations where a client will have a legitimate reason to cancel a trip at the last minute. At that point, you can decide to keep the deposit, keep the deposit to hold a rescheduled date or simply refund the deposit as a show of good faith. I’ve found that in situations where the client experienced an emergency or health issue, I would refund the deposit. Why? Because, more often than not, that client would circle back and book me again – and the tip would be huge.
Well, there you go. I hope that this helps you decide whether to require deposits at the time of booking. Don’t forget to let me know what works for you in the comments section of our blog. I want to hear from you.
Tight Lines,
Captain Mike