How to Recover from a Cancelled Job: Deposits, Cancellation Fees, and Disputes

Cancellations happen. Without a written deposit policy and a clear cancellation fee structure on the proposal, every cancelled job is unrecoverable revenue. Here is how to protect yourself.

Every trade business loses jobs after acceptance. The client changes their mind. They get a cheaper quote. Their funding falls through. The renovation is postponed. The reasons are different but the impact on you is the same: time spent quoting, scheduling, and ordering materials, with nothing to show for it. Without a written deposit and cancellation policy, the loss is unrecoverable. With one, the loss is bounded.

The fix is structural. Take a deposit on every quote over a certain value. State the cancellation policy on the proposal. Define the cancellation fee. Make all of it visible to the client when they accept, not when they cancel. The conversation about cancellation happens before the cancellation, not after. The deposits guide covers the wording and refund policy.

Take a deposit on every job over a threshold

Most trade businesses take a deposit on jobs over $ 500 or $ 1,000 depending on the trade. The deposit covers materials on order, scheduling time, and any pre-job design or assessment work. State the deposit amount as a percentage (typically 20 to 50 percent) on the proposal.

Without a deposit, you carry all the cancellation risk. With one, the client has skin in the game from the moment they accept. Most cancellations happen in the gap between acceptance and start; a deposit converts that gap into a financial commitment, which dramatically reduces cancellation rates. The late-paying-clients guide covers what to do when clients delay rather than cancel outright.

State the cancellation policy in writing

On every proposal, include a cancellation policy that defines what happens if the client cancels. Common structure: deposit non-refundable on cancellation within 14 days of start; partial refund on earlier cancellation; full refund only if the trade cancels first. Set the policy once in your free quote templates so it appears on every proposal. The client agrees to the structure when they accept the proposal.

The cancellation fee should reflect your actual costs at each stage. If materials have been ordered, the fee should cover the non-refundable portion of the supplier order. If labour has been scheduled, the fee should cover the lost slot. Work the fee out in a free quote calculator so it tracks your real cost. State the principle clearly so the client understands the policy is fair, not punitive.

Handle materials on order

When materials are ordered to spec (custom-cut timber, made-to-measure glazing, branded vinyl, manufactured units), the supplier often will not refund. Quote a 50 percent deposit specifically to cover these non-refundable supplier orders. State on the proposal that any cancellation after materials have been ordered forfeits the deposit.

On standard stock items that the supplier will accept back, the cancellation fee can be lower. State the structure clearly so the client understands why bespoke jobs have stricter cancellation terms than off-the-shelf work.

Document everything in writing

When a cancellation happens, document it in writing immediately. Send a clear message: 'Acknowledged your cancellation of job X, dated Y. As per the proposal you accepted, the deposit of Z is non-refundable as outlined in the cancellation policy.' Include the original proposal as an attachment. This is your audit trail if the cancellation becomes a dispute.

Handle disputes calmly

Some clients dispute the cancellation fee even when it was in writing. The first move is always a calm restatement of the policy with the original proposal attached. The client either accepts the position or escalates. If they escalate, the proposal is your contract. The acceptance was logged at a specific date and time. The cancellation policy was visible. The deposit was paid. Most disputes end here once the client sees the documentation.

Avoid getting drawn into the underlying reason for cancellation. The reason does not change the policy. The client may have legitimate grievances about the project, but those are separate conversations from the cancellation fee. Keep the two threads separate so neither one undermines the other. Scope-creep grievances in particular need their own variation-quote process, not a deduction from the cancellation fee.

Recover what you can

After the cancellation is settled, do a quick review. Was the deposit enough to cover your actual cost? Did you absorb material orders that the supplier would not refund? Was the schedule slot lost or did you backfill it? Track the actuals so the next cancellation policy reflects what you actually need to be made whole.

If the cancellation revealed a gap (the deposit did not cover materials, for example), update the cancellation policy on the next proposal so the gap closes. Cancellations are data, not just losses.

The bottom line

Cancellations are unavoidable. Unrecoverable losses are not. Take a deposit on every job over a threshold. State the cancellation policy on the proposal. Define the fee structure to reflect your actual cost at each stage. Document everything in writing. Handle disputes by restating the policy calmly. The deposit and cancellation policy together turn cancellations from losses into bounded events that you can plan around.

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