Cancellation Policy for a Service Business in NZ: What to Put in It
- A cancellation policy only works if the customer saw it before booking, not buried in terms.
- The policy fits in one paragraph covering notice period, the fee, no-access visits and your own commitments.
- Sending a confirm, reminder and morning-of message cuts no-shows and builds a reputation for reliability.
A customer cancels at 7am for an 8am start. The morning is gone; the next job cannot be moved forward. You mention a cancellation fee and the reply is “nobody told me about that”. They are right, and that is the end of it. A cancellation policy that lives on page three of your terms, or in your head, is not a policy. It is a wish.
The policy is a paragraph
A cancellation policy for a small service business needs four things, and they fit in one paragraph.
The notice period. How much notice the customer has to give to cancel or move a booking without a charge. Twenty-four hours is the common standard for trade and home service work; 48 hours for longer jobs where you have turned other work away.
The fee. What is charged inside the notice period. Usually the call-out fee, or a stated amount, or a percentage of the quoted job for multi-day work. Say it in dollars where you can.
What happens when you cannot get in. A no-access visit, where the customer is not home and nobody can let you in, is charged the same as a late cancellation, because it costs you the same.
Your side of it. What you will do if you have to cancel or move the job: as much notice as you can give, a new date within a stated period, no fee to the customer. A policy that only binds one party reads as unfair, and customers notice.
A policy that only binds one party reads as unfair, and customers notice.
The legal limits
The Fair Trading Act 1986 applies. Since 16 August 2022 the unfair contract terms provisions cover small trade contracts (under $250,000 a year), and a cancellation term can be challenged if it is one-sided and causes real detriment. A fee that bears no relationship to what the cancellation actually costs you is the kind of term the Commerce Commission looks at. The safe ground is a fee that is a reasonable pre-estimate of your loss: the call-out, or the time you could not fill.
The Consumer Guarantees Act does not stop you charging a cancellation fee, but it does not let you charge for work you did not do beyond that reasonable estimate either.
The moment that makes it enforceable
The policy has to be seen before the booking is made. That means it goes in the booking confirmation, in a sentence, every time: “Please give us 24 hours’ notice if you need to move or cancel; inside that, our call-out fee of $X applies. If we need to move the job we will give you as much notice as we can and a new date within five working days.”
A customer who received that message and cancelled at 7am has no argument. One who did not receive it has every argument, and the fee is unrecoverable whatever your terms say.
Confirm, remind, confirm
The confirmation message does most of the work, but it is one of three. Confirm at booking with the date, the arrival window, the price basis and the cancellation line. Remind the day before with the arrival window and a request to reply if anything has changed. Confirm on the morning with an estimated arrival time. Three messages, each short, and the no-show rate on both sides drops.
Across 20,286 publicly posted reviews of NZ electricians, plumbers and painters, punctuality is praised in 44.2% of positive plumber reviews, 41.9% for electricians and 39.7% for painters. Not turning up is a top-five complaint theme for both plumbers (about 4%) and electricians (about 5%). The same sequence of messages that makes your cancellation policy enforceable is the one that makes customers describe you as reliable.
When to waive it
Sometimes. A customer in hospital, a burst pipe at their mother’s house, a genuine emergency. Waiving a fee you were entitled to charge is a decision you get to make, and customers remember it. Waiving it because you never told them about it is not a decision, it is a loss.
Templates
The booking confirmation and cancellation emails in our resource library are a free PDF and Word set: a one-paragraph cancellation policy you can adapt, and the confirmation, reminder and morning-of messages with the policy line built in, plus a late-cancellation and a no-access message for when it happens. Put them in your phone as templates.
A cancellation policy is not a punishment. It is the line in the confirmation that makes the 7am phone call a conversation instead of an argument.
What to do on Monday
- Write your cancellation policy as one paragraph covering notice period, fee, no-access and your own commitments.
- Add that cancellation policy sentence into your standard booking confirmation message.
- Set up a day-before reminder and a morning-of confirmation message for every booked job.
Sources and legal references
Legislation and agency links checked on 9 October 2026. This is general information, not legal or tax advice.
