Cancellation Policy for a Small Service Business: What to Include (2026)

General information only. This guide isn’t legal advice, and the sample wording below is a starting point, not a legally checked template. business.gov.au recommends getting legal advice on what to include in your terms and conditions.

A good cancellation policy protects your time without scaring customers off. It’s short, fair both ways and impossible to miss. Here’s what to put in it, and what to leave out.

What should a cancellation policy include?

1. The notice you need For example, “Please give us at least [X] hours’ notice.” Pick a period that matches how hard it is to refill the slot. There’s no legal standard notice period.
2. How to cancel or change Online, by text or by phone, and whether changing a time counts as a cancellation.
3. Late cancellations and no-shows What happens, and any fee, in dollars or as a share of the booking. Keep it to your reasonable costs.
4. Deposits If you take one: how much, whether it’s refundable, and when.
5. What happens if you cancel If you cancel or can’t do the job, the customer shouldn’t be out of pocket. A one-sided policy is a warning sign (see below).
6. Running late What happens if the customer is late, and if you are.
7. Exceptions Illness and emergencies. Saying you’ll consider them builds goodwill.
8. Consumer rights A line that the policy doesn’t affect customers’ rights under the Australian Consumer Law.

The legal points to get right

Australian consumer law doesn’t set a notice period or a fee, but it does limit what a policy can do:

• Unfair contract terms are banned. Since 9 November 2023, “proposing, using or relying on unfair contract terms in standard form contracts” is banned and penalties apply. That covers contracts with consumers and with small businesses (fewer than 100 employees or under $10 million turnover). The ACCC says there’s a presumption that a contract is a standard form contract, so the business that prepared it must prove it isn’t (ACCC: contracts).
• Watch for one-sided terms. The ACCC’s examples of terms that may be unfair include terms that allow one party (but not the other) to end the contract, or that “penalise one party (but not the other) for breaching or ending the contract” (same source). A policy that charges customers for cancelling but says nothing about when you cancel is worth rethinking.
• Be transparent. The ACCC says a term is transparent if it is “in reasonably plain language, clear, and not hidden”.
• Keep fees to reasonable costs. Consumer Affairs Victoria says fees and charges should “reflect reasonable costs. Otherwise, they may be seen as penalties, which generally cannot be enforced”, and that fees, deposits and cancellation charges should be disclosed before customers book (Consumer Affairs Victoria).
• No “no refunds”. The ACCC says it’s illegal for businesses to rely on policies that deny consumer guarantee rights, “for example, policies which say ‘no refunds'” (ACCC: repair, replace, refund, cancel).
• Consumer guarantees apply to services. Services must be provided with due care and skill, be fit for any stated purpose and be supplied within a reasonable time (ACCC: consumer guarantees).
• Card surcharges are banned from 1 October 2026 for Visa, Mastercard, American Express and eftpos card payments (ACCC: payment methods).

Deposits: how much is fair?

There’s no single legal limit. Consumer Affairs Victoria’s guidance for tourism businesses says a fair deposit would generally not be more than 10 per cent of the total cost unless the potential loss justifies a higher amount, and that larger amounts may be treated as pre-payments, which are refundable less reasonable costs. That’s guidance for one industry, not a law, but it’s a sensible benchmark: ask what you actually lose if a booking is cancelled, and set the deposit or fee around that.

Sample cancellation policy wording

Adapt this to your business, replace the brackets, and have it checked before you rely on it:

Make customers agree before they book

A policy only works if customers saw it. The simplest way is to show it at the moment they book and ask them to tick that they agree. With InstantBookingPro:

• Your own cancellation policy wording is shown on the review step, before the booking is confirmed, and customers tick to agree.
• Customers can cancel online from their bookings page, which frees the time for someone else. To change a time, they cancel and rebook.
• It doesn’t take deposits, payments or cancellation fees, or send reminders. If your policy includes a fee, you collect it the way you take payment now.

For practical ways to cut no-shows, read how to reduce no-shows and late cancellations. If you’re setting up from scratch, see how to take bookings online and how to get your first 10 customers. See it for salons and barbers, cleaning businesses and car washes, or try the live booking demo.

Frequently asked questions

Official sources checked on 19 October 2026. Rules change; confirm current details on the linked pages and get legal advice on your terms and conditions.