#67. What Should You Charge When Clients Cancel at the Last Minute?

It's how to handle it if a client doesn't show up or cancels on you at the last moment . What do you do with those late cancels and no shows ? Well , don't you worry about that for another minute , because I'm going to help you with that today . So stay tuned .

Hi , I'm Wendy Pitts Reeves and , with over two decades of experience in the private practice world , I've built my six-figure business while learning a lot of lessons the hard way . This is the first podcast that shows you how to apply the principles of energy , alignment and strategy to build a practice that is profit-centered , but people forward .

This is the Ideal Practice Podcast . Hey folks , thank you so much for tuning in to another episode of Ideal Practice . This is your host , Wendy , wendy Pitts Reeves , and I am thrilled and honored to be hanging out with you guys today . How are you ? How are you doing ? It's kind of a crazy day .

I'm actually trying to get out of town , but I wanted to record this before I left , and it's been one of those weeks where every minute seems to be kind of full . You all know what I'm talking about . You just do the best you can to fit it all in , don't you ? Yeah , I do , and I'll tell you what makes this worth it .

It is such a treat when your clients , or the people that are in your orbit , let you know that you're having an impact on them . Does that happen to you , and when it does , do you notice it ? Do you pay attention to it ?

Just this week , there was a moment with one of my counseling clients earlier in the week when I had someone that I adore , that I've spoken , I've worked with off and on for a good while and know her really well , and she looked at me after we had done some brainstorming around a solution to a specific problem that she was dealing with .

She looked at me and she said I don't know if you have any idea what a difference you have made , and I had seen her through another situation a few years ago . So she said you know you've helped me in the past and that was great , but that's nothing compared to what I'm dealing with now and she said what was it ?

She said I just don't think you realize , just in the short time I've been coming this time , what an incredible difference you're making , not just for me but for my whole family through me . I just want you to know how like it's really something and we are all grateful . Like that's kind of how she was talking and she was .

This is a she's a very serious person . Like she doesn't say things like that lightly and I was very conscious of receiving those words . Like I made myself just look at her , hear what she had to say .

I actually put my own hand on my heart , which I think is kind of an unconscious move I make sometime when something really touches me , and I just said , well , thank you , I'm glad , that's good , that's what I want and , and it's an honor , when your clients do things like that for you or say those kinds of things for you , take it in y'all , take it in ,

don't blow it off , Because that's why you do what you do , and those moments will carry you through the days that are a little bit harder , okay , so let's get into this topic . Let's talk about a situation in your practice that actually is often a little bit harder . I decided I wanted to talk about this because this happened with me this week .

Just this week I had a client who had scheduled a two-hour visit after our first visit . We met recently for the first time and it went great . I really like her , I think we're going to do some really good work together and I think she felt the same because she left that visit , went home and immediately scheduled a session for the next week .

And I have in my scheduling tool when people go to schedule a session , they have an option of scheduling a standard . I call it a one-hour session , but you know what I mean 50 minutes , 55 minutes , whatever one-hour session , or they can schedule an extended like a two-hour session if they want .

I started adding that because I had people asking for it and it's fine with me if that's what someone wants . So I do have people who will do that from time to time and actually recently I've had a couple of different times where people did that immediately after our first visit , which I love .

It means that they're gung-ho , they're excited , they're feeling encouraged and they're ready to get into the work . I love that . That's exactly how I want it to go Well . That happened here and it was great . I was really excited about that .

But this week , when it came time for that two-hour session , she ended up having to cancel at the last minute through no fault of her own . Someone , something had come up in the family that she needed to deal with .

It was perfectly legitimate and it only it was about 15 minutes before I was supposed to see her that I got a text that she wasn't going to be able to come and could we reschedule ? And she said I'm happy to pay a rescheduling fee , of course , if that's necessary . Hope we can . Hope it can work something else , something like that .

Well , that was fine , and I , in that moment , had to make a decision about how I wanted to handle that . Well , when we finish today , or by the time we end , I will tell you what I ended up doing , but I want to talk this through with you first .

Before I dive into the nitty gritty , the , the , the details about how I think about this , let me address one issue that often comes up , and that is the issue about insurance contracts and what you can and can't do if you have those .

If you are in an area of healthcare you're a wellness professional that works with third-party reimbursement meaning you are a psychotherapist , physical therapist , chiropractor , something like that where you may have a contract with an insurance company that helps to cover the cost of a client's working with you .

You may be concerned that you don't have much of a choice about how to handle these kinds of appointments or these kinds of situations . You may think there's nothing you can do about it , but that's actually not true .

The only time I have seen there be an insurance-based block to this was in working with people who are on some kind of a Medicaid type of plan .

Sometimes there are limits there about what you can and can't do , but in my experience at least of decades and I did , I did insurance-based practice y'all for a long time I have never , ever run across a commercial insurance plan that in any way in any way said anything about how I wanted to handle this part of our work together .

Now , I'm not an attorney , I don't work in risk management etc . So I certainly encourage you to do your own due diligence .

Of course , if you have any questions about this , pull out your contract and look at it , or call provider relations of any company that you contract with and talk to them about it , but I personally have never seen any traditional major commercial plan that says anything about this . What when they do come ?

Like there's lots of rules about what you can and can't do with an insurance company , but if they don't show up or they cancel the last minute , that's a whole different ballgame . So I don't think that matters . But if you're not sure , check Okay . So we'll just say that upfront before we even get into this .

All right , let's talk about . I want to walk through three or four specific things to do , ways to approach this , ways to think about this , and I and for each of these I'm going to tell you things to think about and I'll tell you what . What I think is um is ideal and how I handle it , and my hope is that this will help all of you . Uh , because I ?

Well , because you need it . So the the first thing you've got to decide is what does last minute mean ? What is a late cancel for you ? For me , late cancel is 24 hours in advance , which is extremely common . Most doctors offices , most medical practices . That's pretty standard , and I think a lot of people are kind of used to that .

A 24 hour cancellation policy is pretty standard , and what that means is if you have an appointment with somebody at three o'clock on a Tuesday , you have to cancel that before three o'clock on Monday to avoid a consequence , whatever that consequence is and we'll talk about that in a moment I have seen people who have a 48 hour cancellation policy , depending upon

the type of service . It might be even a week out . If you're doing VIP day intensives , where they're going to be with you for an entire day and they've paid you a few thousand for that , you might require I don't know a week or two weeks notice .

So what late means will be different for each one of you , but that's the first thing you've got to figure out . What does late mean in terms of a late cancel ? The second thing I want you to figure out is how specific do you want that to be ? How hard do you want that to be ? And and uh , or how , how strong do you want that boundary to be ?

And I ? The reason I want to say this is because so my policy for forever has been that I need people to cancel 24 hours in advance . That said , I actually don't care that much If they cancel 23 hours in advance . 22 hours in advance , right . What I would always tell my people was yes , it says 24 hours in advance .

I'm not super stickler about that in a literal sense . What I really just need from you is to cancel the day before .

And I said to them I say I've said this forever , I need you to do that , because if I don't want to come into the office tomorrow , if you're not going to be here and I hate to show up for an eight o'clock appointment , who has canceled overnight ? And I didn't know about it . So I say 24 hours in advance , I mainly mean the day before .

Okay , and I will say sometimes , you know , even if you cancel in the evening or whatever , it's my job to kind of check the calendar , check my emails , just kind of make sure everything's clear for the next day . So I don't really worry about that too much .

But it does have to be the day before , or if it's the day of then we're going to handle that in a different way . So first of all , decide what does late mean for you ? Second of all , decide how , how solid do you want that boundary to be ? I myself , I had a family member that was seeing a therapist at one point who was a real stickler about this .

She had a 24 hour cancellation policy and if you canceled literally on the hour , if you had a four o'clock and you canceled at four o'clock the day before , sometimes she would charge you for that full fee , like she was really a stickler about it . I didn't like the way that felt . That's why I don't do it that way .

I'm kind of like you know , give me a little bit of wiggle room here , just not too much . So that's the first thing to figure out is what does late cancel mean to you ? And secondly , how firm do you want that boundary to be ? Is it literal or is there any space on either side of that boundary ? That's the first thing .

The second thing you've got to figure out is what's ? What will you do with that ? What is the charge , what is the fee that you're going to charge for this ? And I'm going to put this out there right now . Get this out front , and some of you are not going to like this .

Some of you are going to be nodding your heads and saying , yeah , it's about time . Personally , I strongly encourage you to charge your full fee .

Your time is worth what your time is worth Y'all I have and I and I say this with love and compassion , because I know that a lot of you have different situations here where you might say some of the things I've seen people do is they'll say you know , I'll charge 50% of what my fee is , or I'll charge $50 for what my fee is , I'm kind of flat rate .

I personally think that that is a disservice to you , because your time is worth what your time is worth and it does not lose value because somebody cancels the last minute . All right , so I personally would hold the line on that . I've also seen some of you say I will charge them , but if they can reschedule within the week , I don't .

Or if I can find somebody else for that time , I won't . And that also does happen Just this week , when I had that two hour cancellation at the last minute .

I forgot about it at first , but as I was sitting there thinking about what to do about it , I remembered that just the day before I had had someone who had said if you have a cancellation , let me know . I'd love to come in or I'd love to see you , even online , and I did actually do that .

I reached out to that person and said , as it turns out I have . I have an open hour . I hadn't planned on and we were able to schedule it . Some of you will say if I can fill that time , I won't charge them personally . I don't do that again because your time is worth what your time is worth . That's the first thing .

The second thing is anything you do that makes this more complicated is harder on you and it's going to be an energy drain .

So if you've got a last minute cancel let's say somebody has an appointment at one o'clock on a Wednesday and they can't do that , okay , and they cancel six , seven PM the night before and you get a text or an email that they're canceling . It's inside the 24 hour window or whatever the wind , unless you've got something different .

But let's assume you've got a standard policy it's inside that window and you might say if I can find somebody to offer that time to you know it'll be okay . Or you might say , well , if you can't come tomorrow , as long as you can come today it'll be okay . But now what happens when you do that ?

What that means is you have to scramble to find somebody else . You've got to think who else is out there that might want this time . Who else has told me they might want a time . You have to turn around and send out emails or texts to other people at the last minute , trying to scramble to feel that time . That's one thing .

And even if you don't do that , if the whole thing about they might come the next , like a few days later in the same week , that still throws your schedule for that week because you had not planned on that either . So your whole schedule kind of gets tossed up in the air . If you're okay with that , that's fine .

This is totally a matter of personal preference . So goodness , like there's no judgment from me on this . If that's how you like to do it , that's fine . I personally don't like to do that . I like things to be clean , clear , simple , and personally I think our clients do better when it is clean , clear and simple .

So my recommendation is that you have a 24 hour cancellation policy at least . My recommendation is that you're not super strict about the exact 24 hours , but that there's a little bit of leeway there , but just a little bit , as long as they tell you the day before . And my recommendation is that you're . It's really simple .

If they cancel at the last minute , it's full fee . They will be . They are responsible for that full fee . That's the first batch of information you've got to figure out . Okay , you're with me on this so far . So we're talking about your policies , getting your policies clear in advance , and now you know what I think about that .

The second thing is to think about kind of what your rules are , about how you want things to go when this does happen . So not just your policies , but your process , how you're going to enforce this . My recommendation is that when this happens , that they must do it , that they must pay that fee , whatever you decided is before your next session .

I have gotten myself into trouble a long time ago . I don't do this anymore , but I have gotten into trouble when I let someone quote get away with this unquote for one session . We go ahead and we meet a few times . They know they still owe me that , but they haven't paid it . They either never paid it or eventually , before you know it , it happens again .

And now they owe me for two and all of a sudden something gets messy again . It's so much cleaner and so much clearer If you have a really clear policy that says here's how it's going to work If you cancel it this time or later . Here's what the fee will be and here's what is required . They really need to pay that before they see you the next time .

Now , if you , as a lot of people do , keep a card on file for them and I think that's a great idea you can literally just go ahead and process that card that day . I do know many of you do that and my you know . Hats off to you If you're . If that's if you've already got that in place , that's great .

But if you don't have a card on file that you can process , then you have to text them or send them an invoice or an email some way . That says dang . I hate that this happened , but you know how it is . Of course , you'll have to . You'll need to cover that time . The fee is this and we'll need to get that from you before we meet next time .

How would you like to take care of it ? How would you like to take care of it ? Would you like me to send you an invoice ? Do you want to just mail me a check ? Do you want to drop by the cash ? Whatever you want to do , how would you like to take care of it ? So , figure out what your rules are and how you're going to enforce this .

Have all of this decided in advance . When you've made these decisions in advance , it's much easier to know what to do when this happens . The next thing I want to say to you about this so I want you to figure out your amount . I want you to figure out how , like how you define a late cancel . I want you to figure out your rules .

And in terms of the rules , one more thing about that you are welcome If you want to have a reason for when they cancel , like I have some people who will say 24 hour cancellation . Or in the case of illness , for example , like you know , somebody comes up sick in the middle of the night or whatever . I don't want them to come in and see me anyway .

So that's fine , you can totally do that . I do have a cautionary note about that that I'll explain in a moment .

But so figure out your kind of the details about how and when you want to enforce this , and then then you know what you have to do . At that point , the main thing you have to do is keep your word . This is what it means to act with integrity as a practice owner . It is .

This is also what leadership looks like , and y'all may not think of this this way . If your policy is X and you don't enforce that policy , you are not keeping your word . You are not acting with integrity . You have said your policy is one thing , but you're not following it through .

That's just like a parent who tells a kid that there are certain consequences if certain things are wrong , that there are certain consequences if certain things happen , and then they don't follow through with those consequences . Well then nothing happens . That what is ? What does that kid learn from that ? And I'm not saying that your clients are kids . They're not .

Please don't take me that way . I mean absolutely no disrespect . I mean that boundaries serve a purpose . I mean that policies are in place for a reason and I , if you all have been following me for any length of time , you know I feel really strongly that this is a therapeutic issue as well .

What you will find when you enforce a clear , fair Policy and to me everything I've said today is completely fair your clients will understand it , they will respect it and they will follow it my clients , if they do have to cancel the last minute for some reason which hardly ever happens .

But if it does , they will say I know you've got to charge me , that's fine , I'll see you next week , like it's . Like it's just nothing , it's , it's not an issue at all . So when you have a clear policy that is in place and you hold to it , it really kind of becomes a non-issue .

That's the cool piece of this from a financial perspective and from an energy perspective . You get paid , you do not lose your time and the energy is so much easier . There's nothing to be anxious about . Like people , everybody kind of knows what the rules are , and it's so much better .

Now I know that this is hard for some of you and I do want to offer you one idea to make it just a little bit simpler . Oh , wait a minute . Let me , before I go there , hold on One thing .

And one other thing I want to say about the beauty of enforcing a regular policy like this is Not only is it better for you financially , not only is it better for your business from an energy point of view . This is so much easier .

It's also better therapeutically or clinically , because you know what's gonna happen when people know that they're gonna have to pay if they don't come , they're much more likely to come , which means they're gonna show up to do the work and they're gonna get better . It means they are much less likely to cancel for frivolous reasons .

They may still have to cancel sometime for important reasons like being sick or a flat tire absolutely , but they are much more likely to do their best to get there and that's going to serve them Right . I know you get that .

So there are a lot of reasons why I think it's extremely important to have really healthy boundaries and policies around this particular issue . Now I want to offer you what I call a spoonful of sugar . Yes , I am a hardcore , long-time Mary Poppins fan . I love Mary Poppins . That's like my favorite movie of all time . I don't care how old I am .

It will always be my favorite movie of all time . For all kinds of reasons and Some of you who know that show you just you've know the song a spoonful of sugar who helps the medicine go down . Right that , when you have to say something that's difficult or you have to enforce a policy that you're feeling bad about , a spoonful of sugar can help .

Well , what does that look like ? For me , most of the time , what that means is I will , in the moment , like the first time this happens with somebody , whatever the reason is , doesn't matter what the reason is . I will say something like you know what ? It's the first time this has happened . I tell you what .

I'll let you off the hook this time , but just this time . If it happens again or the next time , I will have to charge you , and and what do you think ? The responses ? It's always oh , thank you . I appreciate that so much and I mean it . I don't mind it . It is the first time , it's okay , and I also mean the next time I will have to charge .

It's such a non-issue , right , because that feels good . That's very helpful . It kind of gives everybody a chance to get used to the system . It's a little bit of grace in the moment , which is really nice , and it still holds that boundary in place , right . Another way , I saw someone do this just recently .

Actually , I had one of my own coaching clients who was telling me that in her practice , what she's instituting is the concept of a waiver . So when and her prices are premium level prices people pay a lot of money to work with her , which I love , and they don't mind because her work is exceptional . They get really great results . It's worth every penny .

But because it is a major investment , she offers them two quote waivers a year and what that means is from January to June , for six months of the year they can have one late cancel or no show . Same thing for the second half of the year . They are forfeited if they're not used right .

So she's just kind of building in the grace , in a way upfront , and letting them know about that . I love that . I think that's very creative , I think that's fair and that is also clear and easy to implement . So I want you to notice what I'm doing here .

I'm wanting you to do this in a way that makes your life easier , because everybody kind of knows what the rules are , everybody understands them , everybody stands on them . So I think you will be surprised at how much better you feel when you can do it this way . Now let's talk about a special case .

What do you do when somebody really does have like it's a legitimate issue and maybe it's the third time it's happened ? I worked with a client at one point who often had migraines and got a fair amount . It was a real complicated kind of medical situation .

I did not enforce this with her for a long time because I was really sympathetic to what she was dealing with . Physically she could not help it . I understood that .

But what that meant was she missed probably a third of our scheduled sessions and the day came when I'd been seeing her for a good while like I wanna say , maybe a year , I don't know , I've forgotten . Now it's been a while when I just could not afford for that to keep happening and I sort of felt like if it was gonna be a rough day , there was .

She often kind of got clues the day before or the evening before in one way or another . So the day came when even then I had to say I've got to start charging for this . We can't keep doing last minute cancels . So what happened ? She showed up more often .

Things got a little bit better and when she really couldn't show up , she understood what I had to do . So we still had a mutually respectful and great relationship . It was fine . I won't say it was easy , but it was good and it was right and she understood . And what does that do for me ?

It meant that I felt better about our work , because if somebody's missing a third of their times with you , it's easy to start feeling a little bit resentful about that , right , and of course , that's going to impact your work as well . So , spoonful of sugar , give them a break , but give them a break in a very conscious and intentional way .

So think about that , okay . One other version of grace here that I will add to this is that if you have to cancel on them at the last minute , well , you too should have a consequence . So there are lots of ways to handle that . It could be that you give them another session for free , which is kind of your version of paying for that time .

Right , you could totally do that . There's probably other things you can do , but that's the first thing that comes to my mind . So , to sort of pull this together , if you're following me , decide what a late cancel means . Define it . Decide what your fee is if someone does cancel . Define it , and you know where I stand on that .

Decide what your enforcement policies and procedures are going to be around that . How will you collect ? When will you collect ? What do you require ? What are the boundaries ? And I told you what I think about that . Then act with integrity . Keep your word .

Be someone that they can trust to do what you say you're going to do by enforcing those policies and then , when you need to , you can extend a little grace , have a spoonful of sugar with a couple of different options which we talked about as well . So does that make sense ? Are y'all with me ? Are you feeling good about this ?

Are you feeling uncomfortable about this ? I'd love to hear from you kind of what you think and if it would help you . Here's where I want to tell you . I want to suggest an exercise for you . This is going to show you something .

What I would like to suggest is that you go back over the last six months , whatever time you're hearing this episode , look at your appointment calendar for the last six months and count how many times has this happened . I hope you've marked this . Do you mark these appointments as a no show or a late cancel in your notes or on your calendar ?

I hope you do . I do . If you don't , you might want to start with that , but hopefully you can go back and look at the last six months at your appointment calendar and go oh , had one there , had one , there had one there . Count how many times has this come up ?

And I'd like to know has it happened more than once with any particular client , because that's a bit of a red flag that there's a therapeutic issue there to deal with which we can talk about from a clinical perspective . But I just want to look at it from a financial perspective as well , because they're intertwined y'all . They're always the same thing .

So here's what I want you to do . Thank you , add those numbers , those sessions up , count them .

When somebody canceled the last minute or no showed on you , did you collect for that time in some way and if so , how much Overall for X number of hours that were missed , whether it was a late cancel or no show for X number of hours , what did you actually collect for that amount of time and what did you actually lose for that amount of time ?

So , just as an example , if your rates are $100 an hour and your policy is you charge 50% , that means maybe you collected $50 for those hours . I don't know . If you charge $100 an hour and your rate is a hundred , your no show and late cancel fee is $100 an hour . Hopefully that's what you collected .

If that's your policy , but you're really terrible about enforcing it , maybe you didn't collect much at all . I don't know . I don't know , but do the math , figure out how much you brought in , how much time did you lose in literal hours ? How much did you collect for those hours and how much did you lose for those hours ?

And the last thing I want to ask is how much would you have collected if you had charged full fee ? And you want to take it one step further how would it have impacted the work if you had done that as well ? For most of your clients , it won't impact it at all . They'll just pay and they'll show up the next week and everything will be fine .

If you do have a few who tend to do this more often , my guess is you'll find that they don't do it as often . They show up more regularly , and that's good for them as well as for you . So I hope this is helpful . That's what I've got for you today . I hope it gets some wheels turning for you .

I would love to know what your takeaway is from this , and if it makes some of you a little bit angry or a little uncomfortable , that's okay . I part of having an ideal practice is designing something that works for you . So you do . You design your practice the way you want to . I'm sharing with you how I do it

and why I do it . A certain way , as far as the client who had the two hour session , I told you I would explain that back , tell you what I did about that . Come back around to that . Well , a two hour session is a lot of money and I had two points of view about this . On one , that was a lot to ask her to pay as a last minute cancellation .

I felt kind of bad about that . It was also a lot for me to lose as a last minute cancellation . Felt bad about that too , right ? So I did my own version of a spoonful of sugar . I charged her for half that time , which is actually more in keeping with how I would normally handle things .

She did get a little bit of grace and I still held a boundary , right . So that's my two cents about this . Hope it's helpful for you . I would love to hear from you what you think about all this and I hope that this is helpful for you in all kinds of ways .

All right , have a great week , everybody , and I will see you next time right here on the ideal practice podcast . Bye now , hey y'all . Do you ever get overwhelmed with what you're doing , get overwhelmed with all there is to do to grow and manage your private practice .

I know there are a ton of things fighting for your attention taking care of clients , keeping up with the billing , much less sorting out your marketing , and all of that you name it . It's a lot . So , gosh , how do you know , like , what to work on at each phase as your practice grows ? Well , I've got you covered .

I've put together a little quiz , a tool that will help you take stock of your practice as a whole , and when you complete it , you will know exactly what to work on next . It's based on my proprietary framework the seven pillars of an ideal practice .

This really quick and easy process will guide you through a series of questions that will help you identify for yourself where your practice is solid and where it might need a little work . I call it the IP 360 scorecard and , honestly , you can finish this in less than 10 minutes .

Not only that , but once you've completed it , I'll also send you some guidance on how to think about your scores in the context of which phase of development your practice is in . And , the best part , it's completely free . When you go to my website windy pits , reeves dot com forward slash 360 , three , six , zero the numbers .

You'll find a complete description of the scorecard and how it's going to help you . And from there , guys , it's just a simple click of a button or two to get your own . So go get your copy today , complete it , fill it out and figure out where your practice is ready to go next .