Deposit or the full amount? A simple rule for a small bakery

From what order value to ask for a deposit, how much to take, how to tell the customer and what to do when someone cancels a cake.

Every bakery that takes orders for a specific date will sooner or later meet a customer who does not collect their cake. The ingredients are bought, the Saturday is taken, and the cake cannot be sold to anyone else because it has someone's name on it. A deposit is not a sign of distrust. It is simply protection for the costs you carry before the customer receives anything.

A simple rule to start with

A rule with three thresholds works well:

orders up to €40: payment on pickup, no deposit,
from €40 to €150: a 30% deposit when the order is confirmed,
over €150 and wedding cakes: a 50% deposit, the rest no later than 3 days before pickup.

Adjust the thresholds to your prices. What matters is that the deposit covers at least the cost of ingredients and packaging. Then even if the order is cancelled, you do not lose money.

When to take the full amount up front

Full payment before you start is worth asking for when:

the cake is unusual and will be hard to sell to anyone else, for example with a printed image, figurines or an unusual shape,
the order comes from a new customer for a much higher amount than usual,
the deadline is very short and you have to buy extra ingredients or move other work.

Advance payment or binding deposit

Legally, an advance payment and a binding deposit are not always the same thing. In many countries an advance is refunded if the order does not go ahead, while a deposit can be kept if the customer withdraws. Check how consumer law in your country treats them and say clearly in your terms which one you take.

If you want to keep the payment when someone cancels late, say so clearly in your message and your terms. When in doubt, ask your accountant or a lawyer to check your terms.

How to tell the customer

Customers rarely have a problem with a deposit. They have a problem with unclear rules. Write briefly, specifically and always the same way:

> Thank you for your order. The cake for 18 servings costs €145. I will reserve the date once the €43.50 deposit (30%) is paid by Thursday. The remaining €101.50 can be paid on pickup in cash, by card or with PayPal. If you cancel at least 7 days before pickup, I will refund the whole deposit; later, according to the rules in my terms.

A message like this answers every question at once: how much, by when, for what and what happens if you cancel. Save it as a template and send it after every confirmation.

Cancelling an order

Set the refund rules in advance and write them in your terms or in the footer of your messages. For example:

| When the customer cancels | What happens to the deposit | | --- | --- | | 7 days or more before pickup | full refund | | 3 to 6 days before pickup | half of the deposit refunded | | less than 3 days before pickup | the deposit is kept |

The rules are there to protect your costs, not to punish the customer. If someone cancels for a good reason and the ingredients can still be used, flexibility usually pays off in recommendations.

Keeping payments in order

The biggest mess comes from payments scattered across bank transfers, cash in an envelope and messages confirming a PayPal payment. For every order, record three numbers: the price, the amount paid and the amount still due. On the morning of the pickup day, check which orders still have an unpaid balance and remind those customers before they arrive.

How Lagom makes it easier

In Lagom every order keeps its payments and the amount still due. The customer can pay a deposit or the full amount online through Stripe, and the order changes its status to paid by itself. The daily screen shows straight away the pickups where you still have to collect money.

Lagom blog