“All reservations are under the terms of a strict no refund policy once the booking has processed and the payment has been authorized. Reschedule requests within 24 hours cannot be made, will be charged full price, and will not be refunded. We do not allow cancellations.”
How would you assess that policy as a customer?
How would you assess that policy as a business owner?
Policies are business-level rules designed to protect the business. It makes sense, then, that policies are often written by owners, operations staff, or customer service team members—all of which are keenly aware of the problems that cost the business frustration, time, and money. But that’s precisely why policies are often negative and bloated, and not representative of the way your brand normally views and serves guests.
Our policy scorecard—and the accompanying policy guidance—is designed to help you assess and improve your policies. The goal is to create customer confidence before and during the booking process, while still protecting your business and minimizing conflict. We’ll focus primarily on cancellation policies today, but the principles apply to all kinds of policies related to arrival times, behavior, attire, children, etc.
The Policy Scorecard
Use this policy scorecard to assess your own cancellation policy and other policies.
| Criteria | Yes | No |
| Is it generous and reasonable? Does it show empathy for the customer and explain the business’s position, striking a reasonable balance between the two? Would a customer say both, “You understand what I might be dealing with” and “I understand why you need to have this policy?” | ||
| Is it positive? Does it use positive language, emphasizing what the customer can do instead of what they can’t do? Is all emphasis (bold, caps, etc.) on the positive words | ||
| Is it competitive? Is it at least as good as competitor policies, including resellers? Does this policy improve upon competitor policies whenever you can reasonably do so? | ||
| Does it have a title? Does the policy have a title (such as 24-hour free cancellation) so that a customer can quickly understand your policy without reading a paragraph? | ||
| Is it concise? Have unnecessary words and details been removed, or relegated to fine print? | ||
| Is it visible? Is it easy to find, and is it located next to calls to action and in the booking process? |
Policy Guidelines
Is it generous and reasonable?
Empathy is key here. Think like a customer.
If your policy is “no refunds,” why would the customer ever book in advance?
If you primarily serve local residents, it might be reasonable for your policy to offer credit or rescheduling in lieu of refunds. However, if you primarily serve tourists, that is typically not a reasonable policy. Imagine if you lived in New Hampshire and booked a tour in Chicago, and were told that any cancellations would result in a credit rather than a refund. Would that give you the confidence to book?
It’s reasonable to expect your customers to empathize with you too, but sometimes they need some help understanding your perspective. Go ahead and explain why you landed on this policy.
Example: Displaying empathy and explaining your reasoning:
“24-hour free cancellation. We understand that plans sometimes change. And many of our customers are guests traveling here on vacation, so rescheduling isn’t always possible. That’s why we offer a full, no-hassle refund if you notify us 24 hours in advance. Inside of that time, we’ve already begun making preparations—such as lining up guides—, and there’s a good chance we wouldn’t have time to fill your seat….”
Is it positive?
We’ve seen perfectly good policies ruined by negative wording. Consider the following (real) policy. This is a fine policy ruined by a negative spin, since it focuses on the negative outcome of not following the acceptable cancellation timetable, rather than the positive outcome for those who do follow the timetable. We can keep the same policy and make it sound customer-friendly.
Limit the number of negative words (no, must, not, etc.), and avoid using all caps and/or red text for emphasis. While it’s tempting to draw attention to the restrictions that people seem to ignore, write for the 99%, not the 1% of people who ignore policies and complain.
Is it competitive?
Shop competitor policies, including OTA policies (especially the OTA policies for your own tour). Unless your competitors have some operational advantage, they should not be able to beat your policy. We recommend that clients meet or beat the best cancellation policy in the market, and then tell customers (via the website, booking engine, etc.) that they offer the best cancellation policy in the market.
Notice that in the competitive assessment, Competitors B and D have policies that do not match Viator, which will push some customers to book there instead, resulting in a 25% commission on that sale. Why would a customer take an extra risk to book on your site, when Viator offers more flexible cancellation?
Some companies maintain a strict official policy, but their actual policy is more generous. They do this to protect themselves even though they fully intend to be as customer-friendly as possible in reality. This might work okay when you have no competitors, but we recommend making your official policy as generous as possible. Take the risk that your competitors won’t take, and you’ll find that some people will pick you for your customer-friendly policies.
Does it have a title?
By “title,” we simply mean a short summary. Adding a title to your policy can help customers find the key information quickly.
Free 24-hour cancellation. If your plans change for any reason, get a full 100% refund if you notify us 24 hours in advance. Inside of 24 hours, we allow free rescheduling if you contact us before your check-in time.
Is it concise?
Let’s go back to our example policy:
“All reservations are under the terms of a strict no refund policy once the booking has processed and the payment has been authorized. Reschedule requests within 24 hours cannot be made, will be charged full price, and will not be refunded. We do not allow cancellations.”
Customers don’t need to hear about the booking being processed and the payment being authorized. They also don’t need to hear that they’ll be charged full price AND not be refunded. And it’s not necessary to say “strict no refund policy,” “will not be refunded,” and “we do not allow cancellations.”
Is it visible?
For this recommendation, we take a page from OTAs like GetYourGuide, Expedia, and Viator. Notice that these companies that spend many millions of dollars tuning their websites, put the great cancellation policies in key locations—such as right beneath the booking button. They’ll often put free cancellation messaging in multiple locations on the page.
By contrast, many tour operators relegate the cancellation policy—even a good one—to the FAQ section or a completely separate FAQ page. If your cancellation is solid—generous, positively worded, and market-leading—it’s an asset that should be placed prominently on your site.
Create A Winning Policy
A policy that protects your business but dissuades customers from booking isn’t truly protecting your business. These simple tactics can help you create a policy that not only protects your business but also wins more customers.
