Time Investment: 7 Minutes
Suggested Product: All-in-One Contract Bundles
It is best practice as a photographer to clearly establish your deposit/retainer policy within the terms and conditions of your contract.
In fact, a deposit/retainer policy is an essential contract policy for a successful photography business.
Before we talk about the terms “deposit” and “retainer”, let’s first talk about why you should be requiring an upfront payment.
Why Should I Require an Upfront Payment?
Your time is money, literally. As a small business owner, you may be the sole photographer for your business. This means that the time you set aside for one client is time that you cannot set aside for anyone else. If the client is a no-show, you have potentially lost out on other business.
However, I believe this concept is best expressed in the form of real-world stories from fellow photographers:
“Had someone stiff me for a newborn shoot…Spent over an hour getting the entire studio set up. I emailed them asking them what happened and never heard a word back. Never again will I book a last minute session to be nice and not make them do a deposit … even if it’s PayPal!!”
“Spent the time planning a boudoir session, had studio all set up (about 2 hrs. worth of cleaning & arranging furniture etc.), had a professional make-up artist there waiting, & a hair stylist there who drove an hour to be there, only for client to not show up! No call, nothing. I had even confirmed the week before. So I was out all of my time plus we had to go ahead and pay the makeup artist and stylist for their trip out there. We always take deposits now! They are non-refundable and that is always told to the client up front. If they cancel or reschedule it will remain as a credit if they choose to come at a later date. Hard lesson learned.”
“I had someone book his dog's birthday, with the dog cake smash and all. He never showed up, and since he’s the guy who’s been doing my hair for years, when I saw him I asked what happened, his excuse was “ten o’clock was just too early to wake up, so I slept in till three. I knew you’d understand.” By the way, I’ve never stiffed him on a hair spot!”
“I had set a day of on-location photography in one of my fav spots (keep in mind I was new to MY photog biz and not working for a big box photog studio that didn’t take deposits/retainers). I scheduled 3 shoots for the day… to sit there… and wait… and wait…. and… well you get the drift… turns out one forgot, one had an emergency and another decided to just not show… 4 lessons learned that day… Take a retainer, confirm shoot times prior to shoot day, no special treatment for family and MY family is number 1. I wasted an entire Saturday afternoon waiting on the maybes and not with my family…. Never happened again!”
>> the above stories were taken from TheLawTog Facebook community – Feel free to join! <<
How to Avoid these Situations
Do the above stories sound familiar? Would you like to avoid these situations?
The stories listed above could have been avoided or mitigated if the photographers had required a reservation “payment” fee. This fee would have compensated the photographers for their lost time and ensured that the expenses related to hiring hair and makeup artists were covered. Requiring an upfront or in advance “payment” is not an uncommon practice in the creative industry. Many studios, big and small, require a “payment” up front to secure the session appointment. An advance “payment” clause in your contract will give you peace of mind that the client will show, and adds credibility to the professional relationship between the photographer and client — especially when paired with an attorney-drafted and attorney-reviewed contract for photographic services.
Clarity is the Key: The Difference between a Retainer and a Deposit
This distinction between a retainer and a deposit is a big one. However, the two are frequently confused, and often the terms are used interchangeably. But, here’s the thing: “retainer” and “deposit” are not interchangeable.
A Retainer is a fee paid in advance to a service provider, which secures the right for you to have that individual’s services when they are required. An example of this is an attorney receiving a retainer from a client; the client has purchased the attorney’s services for a set period of time or until the retainer runs out. Typically, retainers are not refundable. You either use them within a given period of time or lose them. You may want to think twice about using “retainer” in your photography contract, however, because this definition has often been interpreted by the courts as having a meaning specific to the practice of law and does not carry over in a substantive way to the photography business.
Courts in the United States have tended to point out that the word “retainer” has a specific meaning and “‘[A] true retainer “is not a payment for services. It is an advance fee to secure a lawyer’s services, and remunerate him for loss of the opportunity to accept other employment.’….‘[i]f the lawyer can substantiate that other employment will probably be lost by obligating himself to represent the client, then the retainer fee should be deemed earned at the moment it is received.’” [Cluck v. Comm’n for Lawyer for Discipline.]
One might argue that the definition of “retainer” is specific to the practice of law and does not carry over to the photography business. It’s for this reason that “deposit” may be the better choice of word for photographic services contracts.
This is a payment made by a buyer to show good faith that they intend to complete his end of the transaction. It functions as consideration on the part of the buyer to secure services or goods at a specific time and place in the future, with the balance being paid on a future date. Deposits can be either refundable or non-refundable. It is for a specific job at a specific time and place in the future. There is no industry standard here: as a photography business owner, it is up to you to formulate a refund policy that works for your studio.
It is important to note that whether the word “deposit” or “retainer” is used may make a difference if the photographer, in fact, breaches the contract with the client.
A client may pay a retainer to a photographer to ensure the client has the photographer’s services at some future time and place. Upon acceptance of this retainer, the photographer agrees not to accept other clients which might interfere with the retained client’s future photoshoot. If the client then cancels the contract, the photographer can then keep the retainer as compensation for any services provided and any expenses specifically related to the cancelled job (for example, hair and makeup fees already paid). They may only keep the retainer as compensation for loss of business that they might have been able to book during the period for which the retainer has been paid if, and only if, that is what the signed contract says occurs in the case of contract cancellation.
A client may pay a deposit to a photographer to ensure the client has the photographer’s services at a specific time and place. Upon acceptance of this deposit, the photographer agrees to forego scheduling any other client at the specified date and time. If the client cancels the contract, the photographer can keep the deposit if the signed contract clearly details that compensation for preparation that they may have done for the photo shoot on the specified day and time and the cost of reserving the services of the photographer if the photographer is not able to find another client to take the place of the client who has canceled can be deducted from the deposit.
So How Should Your Deposit/Retainer Policy Be Worded?
Within the contract, it is important to expressly state that a deposit is required from a client to secure a time slot with your studio. This requirement (1) encourages the client’s understanding that your time is valuable, and (2) gives your client a financial incentive to show up for the shoot in a timely fashion.
NOTE: You can decide to have a refundable or non-refundable deposit/retainer. Whichever you decide, just make sure it is included in the signed contract.
Generally, while non-refundability language is a key contract inclusion, we recommend the use of the terms “retainer” or “fee” when non-refundability is desired. Be sure to check with your local attorney for advice for your circumstances!
BOTTOM LINE: HERE IS WHAT WE SUGGEST: