Apprehensively but out of necessity, I had to venture to one of our local supermarkets about 10 days ago, in order to stock up on essentials prior to what was predicted to be the coming peak of the COVID-19 pandemic here in the state of Massachusetts. I headed out early, equipped with mask and gloves, in order to quickly run through our household shopping list during the store hours that are designated for those over the age of 60 or otherwise considered high risk for the virus. The fact that the store has designated these exclusive hours represents an example of adaptation to these changing times.

Within the store, my shopping habits needed to adapt as well. Once I grew accustomed to my eyeglasses fogging due to my face mask, I also had to learn to navigate the departments and aisles by following the new red one-way traffic arrows and, of course, maintaining a safe distance between myself and fellow shoppers. There were measures in place to reduce the interaction between employees and customers, such as the deli products being strictly pre-sliced and pre-packaged, as well as the large plastic shields separating customers and checkout clerks. It was not time to casually compare and select fresh produce items, and there were of course many items that either had a very limited selection or were totally unavailable.

If the usual background music was playing, designed to encourage shoppers to relax and linger, I did not notice it. I only noticed announcements about how there should be only one shopper per household, how there would be purchase limits of certain items (including toilet tissue, of course!), how you needed to maintain a six foot distance from other shoppers, and why reusable shopping bags were no longer permitted at this time. At the checkout, my gloved hand held out my loyalty card for the bar code to be scanned, rather than handing it to the clerk, and there was a new set of rules and policies posted on signs affixed to the large plastic shield. One of those new policies was that, during the course of the pandemic, all sales would be final, with no returns, exchanges or refunds. That policy makes total sense under the circumstances.

How Does This Affect Your Business?

Over the years, cancellation and refund policies were established and became the usual practice in the airline, travel, hotel, and outdoor hospitality industries. These policies protected those businesses that were reserving space that could otherwise be booked by other consumers, helping to discourage double-booking and last-minute cancellations. Although there were occasional grumblings and complaints, generally from people who would otherwise abuse the spirit and intent of those policies, most of us recognized and accepted the need for these practices to be in place. These practices were essentially part of a fundamental two-way contract. The customer was being guaranteed a room in a hotel, a seat on an airliner, or a campsite or cabin at a campground, in exchange for a guarantee of payment and a timely arrival at the reserved date and time.

During this same time, supermarkets and most retailers generally established extremely flexible return, exchange, and refund policies. Intended to keep customers happy, the primary rule at the courtesy desk was to ask no questions. The only exceptions were generally for custom-made merchandise, such as a gallon of a blended paint color at a hardware store, or merchandise where returns were prohibited by law, such as undergarments that had been worn. There were many instances when customers abused those policies, exemplified in a short play that I enjoyed not that long ago, involving a main character who predictably each January returned his recently purchased artificial Christmas tree to a department store, seeking a refund. In recent years, the desire to keep customers happy has been compounded by the desire to avoid the reputational damage that can be incurred as the result of online consumer complaints.

The COVID-19 Pandemic Is a Game-Changer

During the current pandemic, it is necessary for all businesses to reassess their policies and to accept the fact that everybody is in the same big boat where we are all hurting. If you own a campground, you know that people would like nothing better than a return to what was normal just a few short weeks ago. Your customers are not cancelling their reservations because they decided to camp elsewhere or because there is rain in the forecast for the upcoming weekend. They are cancelling their reservations either because your state has temporarily shut down your business or out of a legitimate fear that social gatherings could currently lead to either infection or death. In addition, many have lost the security of employment.

With 15 million Americans filing for unemployment claims over the past three weeks, most of us are finding it necessary to limit our expenditures to necessities for the time being. The family who paid a $300.00 deposit to reserve a campsite for July now needs to be concerned about putting food on the table and paying their rent or mortgage.

When this pandemic has passed its peak, but not until we have a proven vaccine, there is going to be an understandably cautious return to the normalcy that we once enjoyed and took for granted. Your business will return, but it is unlikely that it will return as quickly as the opening of the floodgates at a dam. When business eventually returns to normal, the businesses that will prosper will be the ones who treated their customers with respect and understanding, not the ones who pointed to their rules and refused to relax their refund and cancellation policies during this pandemic.

If you would like to offer your guests an option, you could give them the choice between a full refund or an unexpiring credit with a value of 110% of what they paid. For those guests who can afford to forego the refund, consider their deposit as a voluntary loan that will help you to weather the storm. Have confidence that you and those guests will be there when the dust settles.

Remember, we are all facing this crisis together and need to pull together as a nation. We are all hurting.

At the time of this writing, as limited and inadequate as they may be, your small business may qualify for both a COVID-19 Economic Injury Disaster Loan (EIDL) and a Paycheck Protection Program (PPP) loan, both designated to be at least partially converted into non-taxable grants. Meanwhile, your customer is hoping to qualify for an Economic Impact Payment of only $1,200.00 per adult taxpayer and $500.00 per dependent child, with the expectation that those might not even materialize until September. It is not easy, and it may be painful, but I suggest you to do the right thing regardless of what your cancellation policy has outlined prior to this crisis.

If you are selling a product on eBay, you are required to clearly define your return policy, and if your website is involved in any type of e-commerce or online payments, payment gateway service providers such as Authorize.net will require that your site defines its refund policies. Your policy may simply be “no returns and no refunds under any circumstances”, but that policy needs to be clearly defined – both for your protection and for the protection of your customers. Misunderstandings can lead to disagreements and the need for mediation.

One of my company’s clients e-mailed me late last week, after one of her campers contacted her on Friday, asking for a refund – minus her stipulated $25.00 processing fee – for a last-minute cancellation of his weekend reservation, due to a less than perfect weather forecast. The client balked at allowing the refund, even though her website did not clearly define the terms for cancellations and refunds. Under the circumstances, this first-time guest at her park was making a totally reasonable request. With this instance in mind, it may be time to take a closer look at your own park’s cancellation and refund policies, confirming that they are covering the full range of potential circumstances.

As I explained to the client last week, most of our campground clients who are booking either real-time reservations or online reservation requests have policies that are much more clearly defined than what she had instructed us to post to her site. Typically, they might say that a full refund, less a $25.00 administrative fee, will be issued if the cancellation is made 14 days or more prior to the intended date of arrival; a credit for a stay at another date will be issued if the cancellation is made between 7 and 14 days prior to the intended date of arrival; and no refunds will be issued for cancellations made less than 7 days prior to the intended date of arrival. Each park is likely to have its own timeline for cancellations, its own administrative fee (if any), its own expiration date for any credits that it may issue, and probably separate schedules for campsites and rental units. The important thing is for all of those details to be clearly defined.

Many of our more savvy campground clients (typically, campground owners who have decades of experience in dealing with people who will try to find loopholes that they can use to their advantage, in this case capitalizing upon any vagueness in a cancellation and refund policy) will also specify the following:

• Deposit forfeited for non-arrival on scheduled arrival date.
• Holidays, special events, monthly and seasonal reservations are non-refundable.
• No refunds for early departure.
• No refunds due to inclement weather.
• No refunds for evictions due to violation of rules.

These policies should be clearly visible on your website, accompanying your rates and probably repeated on a page that lists your park’s rules and policies. You want your customers to see them, and you also want to be able to direct customers to the text should any misunderstandings arise. I also suggest that cancellation and refund policies be outlined, with a link to the full list, at the end of the reservation process, using a checkbox where the guest must indicate acceptance of those policies before the form will be processed.

I know that some people like to keep things simple, and others fear that they might scare away business by posting what might be perceived as stringent policies; however, a customer who is unwilling to accept reasonable cancellation and refund policies is probably not the ideal guest.

Despite having policies that are crystal-clear and etched in stone, you will probably still want to evaluate each instance individually, exercising a degree of discretion in resolving each request. The bottom line these days is that, if a customer demands a refund, it is a lot less expensive in the long run to keep that customer happy than to suffer the consequences of encouraging him to post negative reviews or to complain on the social media. Going out of your way to make an exception to the rule in order to accommodate a first-time guest might turn that new customer into a lifetime source of income for your park.

Remember that, at least in his or her own mind, the customer is always right. Try to make an effort to help reasonable people to understand – in advance – your business’s point of view when it comes to cancellations and refunds.