Is It Legal To Charge A No-Show Fee In NZ?

Yes, you can usually charge a no-show fee in New Zealand if your customer clearly agreed to it before they booked and the fee is fair for the loss your business is likely to suffer.

The nuance is that a no-show fee isn't just a line you add to an invoice after someone misses an appointment. It sits inside your booking terms and conditions, your payment process and your consumer law obligations.

If you're running a clinic, salon, studio, consultancy, home services business or any other appointment-based business, missed bookings can sting. You may have held a staff member's time, turned away another customer, ordered materials or prepared for the session. A well-drafted policy helps you recover some of that loss without upsetting customers or creating legal risk.

Can You Legally Charge A No-Show Fee In NZ?

Yes, a no-show fee can be legal in NZ, but only if it's properly disclosed, agreed to and reasonable in the circumstances.

The main legal issue is contract law. Your customer needs to know about the fee before they commit to the booking. If the first time they see it's after they've missed the appointment, you'll usually have a much harder time enforcing it.

You also need to think about the Fair Trading Act 1986. That law applies to how you present your prices, fees and policies. If your website says bookings are free to cancel but your confirmation email hides a no-show fee in tiny print, that can create problems. The Commerce Commission can take action against misleading or deceptive conduct and unfair contract terms.

The Consumer Guarantees Act 1993 also matters if you're providing services to consumers. You can't use a no-show policy to avoid your own obligations. For example, if you cancel the appointment, provide the wrong time, or don't deliver the service with reasonable care and skill, it may be unfair to charge the customer for not attending.

For business customers, you may have more flexibility, especially if your customer contracts say the customer is acquiring services for business purposes and it's fair and reasonable to contract out of parts of the Consumer Guarantees Act. That wording needs care, and it's usually not something to copy from a template.

How Much Can You Charge For A Missed Appointment?

You should charge an amount that reasonably reflects the loss your business is likely to suffer, not an amount designed to punish the customer.

There isn't a fixed no-show fee set by New Zealand law. A fair amount depends on the type of service, the booking length, your ability to fill the spot and the costs you incur when the customer doesn't turn up.

For example, a 15-minute consultation may justify a smaller fee than a two-hour treatment where you've rostered staff, prepared a room and turned away another booking. A fee may be easier to justify if your cancellation window is reasonable and you can show why the amount makes sense.

A Worked Example

Aroha runs a physiotherapy clinic in Wellington. A standard 60-minute appointment costs $120. The clinic's booking terms say that if a customer cancels with less than 24 hours' notice or doesn't attend, the clinic may charge a $60 late cancellation or no-show fee.

A customer books online, ticks a box confirming they accept the booking terms, receives the policy in the confirmation email, then doesn't attend. Aroha's clinic can't refill the spot at short notice.

In that situation, the $60 fee is more likely to be enforceable because:

• the customer agreed to it before booking
• the amount is half the appointment fee, not an excessive penalty
• the clinic genuinely lost billable time
• the 24-hour window gave the customer a fair chance to cancel
• the fee was clearly stated in the booking process and confirmation email

That doesn't mean every business should copy the same number. Your fee should be tailored to your actual booking model.

Do Customers Need To Agree Before You Charge Them?

Yes, you should get clear agreement before you charge a no-show fee, especially if you want to charge a card, keep a deposit or invoice the customer later.

The safest approach is to make your booking terms visible before the booking is confirmed. Don't rely on a policy that only appears on a separate page the customer may never see.

Good ways to get agreement include:

• a tick box at online checkout saying the customer agrees to your booking terms
• a booking form with the cancellation and no-show policy near the submit button
• a phone script where your staff clearly explain the fee before confirming the booking
• a confirmation email or text that repeats the policy straight away
• signage at reception for repeat in-person bookings, backed up by written terms

If you're using standard form booking terms, an unfair contract terms review may be useful because the Fair Trading Act's unfair contract term rules can still apply. These rules cover consumer contracts and, in many cases, standard form small trade contracts. A term is at risk if it creates a significant imbalance, isn't reasonably necessary to protect your legitimate interests, and would cause detriment if used.

A hidden or very harsh no-show fee is more likely to be challenged than a clear, proportionate policy. The goal is simple: make sure the customer knows what they're agreeing to before they reserve your time.

Can You Take A Deposit Or Charge A Stored Card?

Yes, you can usually take a deposit or charge a stored card for a no-show, but you need clear consent and a compliant payment process.

Many service businesses use deposits because they're simpler than chasing payment after a missed appointment. A deposit can also help confirm that the customer is serious about the booking.

You can structure this in a few ways:

• Refundable deposit: the customer gets it back if they attend or cancel within the allowed window
• Non-refundable deposit: the customer loses it if they don't attend or cancel late, if that was clearly agreed and the amount is fair
• Part-payment: the deposit is deducted from the final appointment fee
• Card hold or stored card: the customer authorises you to charge a stated amount if they no-show or cancel late

If you store card details, be careful. You should avoid keeping card numbers in emails, spreadsheets or paper files. Use a reputable payment provider that stores card details securely, usually through tokenisation. Your customer should know when their card may be charged, how much may be charged and what cancellation window applies.

The Privacy Act 2020 also applies if you're collecting personal information such as names, phone numbers, email addresses, health details or payment information. You should only collect what you need, tell customers why you're collecting it, keep it secure and avoid holding it for longer than needed.

If you add a card surcharge, make sure it isn't excessive. The Commerce Commission has guidance on payment surcharges, and the basic idea is that a surcharge should reflect your actual cost of accepting that payment type.

What Should Your Booking Terms And Conditions Include?

Your booking terms should clearly explain when a fee applies, how much it's and what happens if either side needs to change the appointment.

A short policy can work for a simple service, but it still needs the right details. A vague statement like we charge cancellation fees at our discretion can be hard to rely on and can feel unfair to customers.

Here's a practical outline you can adapt before getting it tailored. Don't treat this as a finished legal document. A lawyer or legal professional should review it against your business model, booking process and customer base before you use it.

1. Services Covered: state which appointments, sessions, consultations or bookings the terms apply to.
2. Booking Confirmation: explain when a booking becomes confirmed, such as once payment is made or a confirmation email is sent.
3. Cancellation Window: state the notice required, such as 24 hours or 48 hours before the appointment time.
4. No-Show Fee: set out the amount or formula, such as a fixed fee, percentage of the appointment fee or loss of deposit.
5. Late Cancellation Fee: explain whether the same fee applies if the customer cancels after the window closes.
6. Deposits And Stored Cards: explain when deposits are refundable and when a stored card may be charged.
7. Rescheduling: say how many times a customer can reschedule and whether the cancellation window still applies.
8. Business Cancellations: explain what happens if your business needs to cancel or move the appointment.
9. Exceptions: set out whether you may waive the fee for emergencies, illness or other genuine circumstances.
10. Customer Agreement: describe how the customer accepts the terms, such as ticking a box online or confirming by email.

Templates often miss the practical details that make a policy enforceable, such as how agreement is captured or how a deposit interacts with the final price. The best terms match how your booking system actually works.

What If A Customer Refuses To Pay Or Says The Fee Is Unfair?

You should first check whether the customer clearly agreed to the fee and whether the amount is reasonable for the missed appointment.

Before you push for payment, gather the key records. These usually include:

• the booking date and appointment time
• the version of the booking terms the customer accepted
• screenshots of the online booking flow, if relevant
• confirmation emails or text messages
• notes of any phone call where the policy was explained
• records showing whether you could or couldn't refill the booking

Then look at the situation commercially. If the customer has a genuine emergency, is a regular client, or didn't receive the confirmation because of a system issue, it may be better to waive the fee once and remind them of the policy for next time.

If you do ask for payment, keep the message calm and specific. Refer to the booking date, the policy, the amount and the reason it applies. Avoid language that sounds like a penalty. You're explaining a contractual fee, not punishing the customer.

If several customers are pushing back, that's usually a sign your terms need work. The issue may be the fee amount, the cancellation window, the way the policy is displayed, or the fact your staff explain it differently each time.

Without clear written terms, you may struggle to recover unpaid no-show fees. More importantly, inconsistent policies can damage customer trust. Fixing the wording early is usually easier than dealing with unhappy customers later.

Key Takeaways

• You can usually charge a no-show fee in NZ if the customer agreed to it before booking and the fee is fair.
• Your fee should reflect your likely loss, not operate as a punishment for missing an appointment.
• Clear booking terms, a sensible cancellation window and a visible acceptance process make the policy much easier to rely on.
• Deposits and stored card charges can work well, but you need clear consent, secure payment handling and privacy compliance.
• The Fair Trading Act 1986, Consumer Guarantees Act 1993 and Privacy Act 2020 can all affect how your policy works in practice.
• If customers often challenge your policy, it's worth reviewing the wording and how it's shown during the booking process.

If you'd like help with your booking terms, deposits, cancellation windows and customer payment clauses, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.