DCP wants deposit refunded?!?!

I am a new daycare provider and have been holding a spot for a (not too close) friend of my husband for months before I opened. DCM and I have been talking regularly while we were both on maternity leave, had a couple of playdates with our babies, etc.

DCG was supposed to start with me on March 4th.

In November I emailed DCM to ensure they were still interested in my daycare. I received a response that they were 100% still interested. I explained at the time that I had already turned at least five potential clients away for the spot that they wanted.

In January I insisted on a 2 week deposit (which they gave me), provided them with my policies and procedures and contract (which they never signed and returned to me).

In January I also interviewed another family with a 12 month old who wanted to start 2 weeks after this other DCG. They wanted me and I wanted them, but because I am new to the daycare field I wasn't sure that I could meet the needs of two 12 month olds in addition to my current kids. So, I told this other family that I couldn't take their baby.

On Friday, 2 weeks before they were to start, DCM called me to say that she has found other arrangements and no longer needs me. She then asked for her deposit back.

My contract states that my deposit is non-refundable and is to be used towards the last two weeks of care.

This is my first time having to deal with this, and I dont think I should have to refund her deposit. They are giving me two weeks notice for a spot that could take months to fill, not to mention the fact that I had another family who would have been a great fit but turned them away to give priority to my 'friend.'

What would you do if you were in this situation?

My contract states that, the deposit is non refundable if the child does not start care. However you said that they never signed and returned the contract so I am not sure what your options are. Personally after all this time I would not return t. As for the other family, try calling them to see if they have found care yet.

That's a tough one because they never actually signed the contract. That is why I tell parents that I cannot secure the spot for them until I have both the signed contract and the deposit...then it is clear. You should not have to return the deposit, but then, how can you prove that it was a deposit if there is no contract signed? Not sure how a judge would view that in court. Maybe someone else has some better advice, but I would probably chalk it up to experience and return the deposit.

When you were e-mailing back and forth about the deposit, did you mention at any point that it was non-refundable? Outside of your contract, do you have it in writing that she understood that it was non-refundable?

I have a text where I explained that the deposit is to protect myself from loss of income should a client pull their child from my care without giving me proper notice. My contract states that I require 4 weeks notice if the child is in my care.
She gave me 2 weeks.

I am adding a clause right now that more clearly covers me in the event that a child never starts care.

Court? Yikes!!

Oh yeah, I should add that in response to that text she wrote that she would never do that to me.

I have to agree with Sunnydays on this one. It does bite that they are even asking as you have been holding the spot for quite sometime.

I would have a chat with the family and tell them the loss of revenue not only for holding the spot but for the loss you will be experiancing do to them changing there minds. Let them know that it may take some time to fill there spot.

If they fully understand then they should let you keep the deposit.

I think if you have something in writing that says that the deposit is non-refundable, then you can refer to that. You could say to her "on xx date, I sent you the following text stating _____. So unfortunately, your deposit it non-refundable." Then explain to her what options she has. Can she use up the care? Do you even want that?

In my policies and procedures it says:
"If you decide to terminate care, I require written notice four weeks in advance of your termination date. If your termination breeches the terms and dates outlined in your contract, your deposit will not be refunded unless otherwise discussed."

And:
"I require a non-refundable four week deposit at the time of registration, which will be applied to your last four weeks of care as outlined in our contract."

Do you think that is clear enough to cover my butt should they try to sue me?? OMG now I'm super nervous about this!

Your policies don't apply in this case cos they never signed your contract. That's why I'm wondering if there's any other written communication which would prove that she knew it was non refundable.

To get around this I created a one page form that has parents name, address, phone on, anticipated days and hours and starting date for care and that page must accompany the deposit. The contract itself and the actual information forms can be done closer to the start date but the page and money confirms space. Paying the deposit is equivalent to confirming the space and therefore I would think they would be bound by the contract and that legally they have up to the starting date to have a signed copy of contract on file but they paid the deposit as per the contract meaning they understood the terms they were paying under.

If she had said in January that they were no longer interested that is one thing but to wait this long is not fair to you and no they do not get their deposit back.

I have done a couple interviews for september already and the people that came seemed paranoid to secure a space and I made it very clear to them that paying the deposit is final and that once paid it is not returned even if they come back next week months before the start date. The deposit is not something you pay to "hold" a spot while you keep looking just to make sure you have one. That once paid I stop interviewing and the money paid compensates for having to start over again. Needless to say they didn't pay.

I think it is probably unlikely that they will sue you over this....but you can never know for sure, so you have to make decisions based on the facts on hand. As Jazmic said, the policies in your policy book and contract, do not apply because they did not sign it. However, as she said, if you have a text message that can act as proof, you may have grounds to keep the deposit. Just make sure you refer to that message when you tell them the deposit will not be refunded. And, I am impressed that you were able to get a full month's fees as a deposit...way to go! Although I expect one month's notice, I have never tried to get one month's deposit as I thought parents might not go for it. May give it a try....;)

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Originally Posted by gravy_train

In my policies and procedures it says:
"If you decide to terminate care, I require written notice four weeks in advance of your termination date. If your termination breeches the terms and dates outlined in your contract, your deposit will not be refunded unless otherwise discussed."

And:
"I require a non-refundable four week deposit at the time of registration, which will be applied to your last four weeks of care as outlined in our contract."

Do you think that is clear enough to cover my butt should they try to sue me?? OMG now I'm super nervous about this!

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That was my thought too, playfelt. live and learn i guess... i am changing my paperwork to reflect the purpose of a deposit.
i like your one-page doc. idea too and think i will implement that as well.

you have clear communication with her that states her intention to start and that you were holding a spot. i highly doubt she will take you to court over it as the costs and loss of work costs just doesnt justify it. i wouldnt give it back especially considering you have turned so many away. explain it to her clearly how this has affected you and that you held a spot in good faith for her. hopefully she understands

And definitely require a signed contract with the deposit next time. That way you will not have this issue. If they are not ready to sign, they are not worth holding a space for as they are obviously not sure.

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Originally Posted by gravy_train

That was my thought too, playfelt. live and learn i guess... i am changing my paperwork to reflect the purpose of a deposit.
i like your one-page doc. idea too and think i will implement that as well.

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I say keep the deposit. They wouldn't have paid you a "deposit" if they didn't know what it was for. How rude of them to ask for it back!

I think that you are morally 100% entitled to keep their deposit. Legally, I am not completely certain, but I am pretty sure that her texts/emails confirming that she wanted the spot, that she knows it's in case she ducks out at the last minute are as good as a signed contract.

I would NOT return the deposit. I would be completely prepared to battle with her on it. What a sneaky manipulative b---- to do this to you. She has disrupted your ability to provide for your family. I would afford her no niceties.

Good luck. I hope to read a positive followup soon. :)

thanks, sunnydays :-) i ask for four weeks, but if it is an issue i 'negotiate' to 2 weeks. in this case i accepted a 2 week deposit. i am writing an email now that i hope clearly explains where i am coming from and that this deposit does not come close to covering the loss of income i am about to incur. as we all know, it can take months to find the right family.

In my contract it stated deposits are nonrefundable. I wouldn't be giving it back to them. The deposit is to protect you for exactly this kind of thing.

haha alphaghetti! thank you! my thoughts exactly! it gets worse too --- about two weeks before she called to tell me she changed her mind, her husband contacted my husband to see if he could 'show him' (ie. do the work) how to re-tile his floor. we were out of town so he was unable to help, thank god! because when we returned home we received this news.
unbelievable.

Keep the deposit - you have the emails and the deposit which shows her intent. You were given many indications that this client was on board and you showed you were convinced she was a future client by turning away other clients. All proof she is in the wrong IMO morally and legally.

I agree that you have sufficient written proof going back and forth between the two of you for you to keep the deposit. Good luck! :)

Loving all this support! Thank you! As a woman and a naturally giving person I struggle with putting my own needs first. This is part of what gives me the patience to be a great daycare provider, however as a business person I need to learn to stand up for myself and for what's right for me, my business and ultimately my family.

I also require a 2 week non refundable deposit. However, a spot is not held until I have both the deposit and the contract together returned. If a client returns the deposit but not the contract, I don't cash the cheque until the contract is back.

A non refundable deposit is a funny thing. We can ask for it, but clients always want it back. Is it worth the frustration and fight? Is it worth someone telling someone else that I'm nickle and diming and not fair in my business? I don't know. I think word of mouth is my best advertising, I never want anyone to be in a position where they have anything negative to say about it.

It's happened to me in the past that a family didn't start right away so I made a page called "Addendum to the Contract" and it specifically stated that the deposit and holding fee for each month are non-refundable.

Sorry you are going through such a bad time. We live and learn, especially in this business. There is always something to learn.

Yes, I have learned A LOT in the past few months! The biggest challenge for me is going to be letting go of the constant need to please everyone and make sure that I am making sound business decisions.

This almost sounds like they had the child on the wait list for a space in a daycare centre or licensed care of some sort and then took a space with you thinking they wouldn't get in and then all of a sudden a space is now open and of course to hold that space they need to give deposit for last month and start right away all money they don't have right now so hoping you will just give them what they need to secure the other place. Nope sorry that is why we charge a deposit is so you can't leave us high and dry when you get called for the daycare centre space afterall.

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Originally Posted by playfelt

This almost sounds like they had the child on the wait list for a space in a daycare centre or licensed care of some sort and then took a space with you thinking they wouldn't get in and then all of a sudden a space is now open and of course to hold that space they need to give deposit for last month and start right away all money they don't have right now so hoping you will just give them what they need to secure the other place. Nope sorry that is why we charge a deposit is so you can't leave us high and dry when you get called for the daycare centre space afterall.

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yes, playfelt, it does seem like that. i sent an email incorporating many of the things we talked about in this thread. i hope that i struck a balance between compassionate and stern :-). i am hoping that they just maybe didn't see the whole picture - that this is my sole source of income and that their last minute decision affects my entire family. i'll keep ya posted as i have a feeling i will likely get some sort of response.

even if she didn't sign the contract she had every intent of coming thru your communications via email. copy and print them off incase they decide to sue you later on (you never know about people)

the saga continues! i emailed dcp in a manner that i thought was firm but compassionate and tried to explain how her last minute decision has effected me financially. she responded with an email claiming that i am unethical, and indicated that she has consulted a 'legal representative' (i am assuming this is a friend of hers who is a police officer). it's shameful, really. just admit that you were wrong, apologize and move on! some people have such a sense of entitlement and i have a really hard time with that.
at first i considered returning the money just because i hate the thought of anyone being mad at me and not liking me. now that i am a business owner though, i need to think about what's best from that standpoint. i'm still not 100% sure how i'm going to handle this, but the more i think about the way she is disrespecting me and my family the angrier i get!!!

She can consult as many legal representatives as she wants. You don't have to give her the money back. The deposit is for THIS KIND OF SITUATION. What part is she not understanding?

You are not the unethical person in this situation, but someone is being very unethical. Perhaps she should return to Decent Human Being classes and update her ethics.

Grr. I am so angry for you. Have you replied?

haha! no, i haven't replied yet... i'm going to think about it for a few days so that i can get my bearings and make sure that my response is an accurate reflection of me and my values.
right now i just want to call her names and swear at her :-)!!

Good for your for taking your time to come up with a better response! :)

Other option is to not reply at all. You sent your email and stated your case and gave your answer. She can email and consult as many legal friends as she wants - which was meant to threaten and intimidate you. So ignore and if she continues just keep forwarding the same email again with the idea of what part of this are you not getting.

I agree with playfelt. Don't answer her back, (I know its hard) but the more you keep responding the more she is going to get under your skin. Just save your messages. when people are wrong they will start to pull the lawyer card to try and intimidate you. If you have the date and time of any of the people you had to turn away keep that incase you need it, its proof that you had to turn people away.