Retainer or Deposit??

[LalaO]

Helloo!

I have a family coming for a second visit to chat things through. They aren't due to start until April (not confirmed) .. I didn't mention it when we first met but should I charge a retainer or deposit or neither? And if so, is it ok to mention it now seeing as it wasn't discussed before?

I'm new to childminding so not sure what to do with regard to these things!

Many thanks x

[mama2three]

For an april start I would ask for a deposit to secure the place. This is non refundable if they don't start..
I hold the deposit until the final payment , but many us it against the first months fees.

[LalaO]

Thanks. How much deposit do you ask for?

[mama2three]

I ask for a months fees as a deposit

[Kiddleywinks]

Yes it's a good idea to mention 'terms', contracts and any finer details on a second visit.
First visit's are normally to see if you all 'click' so no point bombarding with fees and hours and everything else at that point - wouldn't see anyone again for dust :laughing:

A retainer is usually due when parents don't want an immediate start, but do want the space. It's a way of ensuring you're being paid - albeit at a reduced rate - rather than offering the space to someone else that could be paying in full.
A retainer is non refundable - unless you choose before the official start date to not actually start, in which you would refund all monies given to you.
A retainer is useful if you're in demand and have lots of potential clients wanting a space with you as soon as it becomes available - the really serious ones will pay to have you, the less serious/picky ones wont ;)

A deposit is refundable, either at the start of or the end of a contract, or again, if you choose not to go ahead with starting prior to the agreed start date.

The way I work is:
If someone pays a retainer, the space is no longer available, with a deposit, it still could be (if a better enquiry came along I would have to consider it)
If someone doesn't want to pay a retainer, I will only take the deposit and do the paperwork upto 6 weeks prior to the actual start date, that way I'm free to continue advertising for a better contract and I don't have to let anyone down

[lollipop kid]

Yes it's a good idea to mention 'terms', contracts and any finer details on a second visit.
First visit's are normally to see if you all 'click' so no point bombarding with fees and hours and everything else at that point - wouldn't see anyone again for dust :laughing:

A retainer is usually due when parents don't want an immediate start, but do want the space. It's a way of ensuring you're being paid - albeit at a reduced rate - rather than offering the space to someone else that could be paying in full.
A retainer is non refundable - unless you choose before the official start date to not actually start, in which you would refund all monies given to you.
A retainer is useful if you're in demand and have lots of potential clients wanting a space with you as soon as it becomes available - the really serious ones will pay to have you, the less serious/picky ones wont ;)

A deposit is refundable, either at the start of or the end of a contract, or again, if you choose not to go ahead with starting prior to the agreed start date.

The way I work is:
If someone pays a retainer, the space is no longer available, with a deposit, it still could be (if a better enquiry came along I would have to consider it)
If someone doesn't want to pay a retainer, I will only take the deposit and do the paperwork upto 6 weeks prior to the actual start date, that way I'm free to continue advertising for a better contract and I don't have to let anyone down

This is a brilliant explanation.

I do virtually the same as Kiddleywinks, but when it comes to the retainer, I offer that parents can come for the last month before starting for 50% of the time, using the retainer to settle in their child before the true start date. For example, if a parents wants 4 days a week, they can bring their child for four half days, or for 2 days in the weeks up to him/her starting. (You having the retainer means that it's their space anyway, if that makes sense.)

This way, the parents can go back to work knowing their child is completely settled, and you know that the child will gel with everyone else in the setting. I find that parents really appreciate this as it gives them a bit of peace of mind.

Good luck,

L

[LalaO]

Thanks for your replies.

Ok so, if I charge a deposit now, is it ok to do the contract in a few weeks at one of the settling in sessions or is it best to do the contract and deposit at the same time?

Thanks

[lollipop kid]

Thanks for your replies.

Ok so, if I charge a deposit now, is it ok to do the contract in a few weeks at one of the settling in sessions or is it best to do the contract and deposit at the same time?

Thanks

I'd say do the contract at the same time as taking any money, and list on the contract that you've taken the deposit, how much, and detail when it is refundable and when not. (See above posts.)

All the best,

L

[moggy]

Thanks for your replies.

Ok so, if I charge a deposit now, is it ok to do the contract in a few weeks at one of the settling in sessions or is it best to do the contract and deposit at the same time?

Thanks

I always say contracts PLUS deposit of 4 weeks fees = a secured place here.

Without a contract you don't know for sure what you are securing (days? hours?)
Without a deposit you may never hear from them again!

[Tealady]

Contract and deposit at the same time. That way they know what they are committing to and can't use not knowing about something as an excuse for cancelling and getting their deposit back.

[LalaO]

Ok great, thanks everyone 😊

[Kiddleywinks]

Yup, agree with all, contract AND deposit, (no money, no contract)

[mumofone]

When do you "give" the deposit back? Do they them not pay upfront for the first months fees because they've already effectively paid you this as the deposit??

[loocyloo]

I use the deposit towards the final months fees.

[Kiddleywinks]

When do you "give" the deposit back? Do they them not pay upfront for the first months fees because they've already effectively paid you this as the deposit??

I use the deposit against the final months fees.
When clients actually start they pay either weekly or monthly fees in advance :thumbsup:

[hectors house]

I only charge £100 deposit and I used to refund off the first months fees but then realised that I had no safety net if they then left without giving/paying notice period, so now it comes off last months fees providing they are up to date with payments. I know I should charge more but just can't bring myself to ask for it!

[lollipop kid]

I only charge £100 deposit and I used to refund off the first months fees but then realised that I had no safety net if they then left without giving/paying notice period, so now it comes off last months fees providing they are up to date with payments. I know I should charge more but just can't bring myself to ask for it!

I always take a deposit as well as the first month's fees, but I sometimes let the parents build the deposit up in two hits - so half before they join, and half just before the second month's payment. (I don't offer it - I keep it up my sleeve if the parents express worry that finding the deposit will be hard for them. Then I sell the deposit to them as money used to cover the last month's fees. When I explain it like this, they understand how it works and are fine.)

:thumbsup:

L

[Simona]

I always take a deposit as well as the first month's fees, but I sometimes let the parents build the deposit up in two hits - so half before they join, and half just before the second month's payment. (I don't offer it - I keep it up my sleeve if the parents express worry that finding the deposit will be hard for them. Then I sell the deposit to them as money used to cover the last month's fees. When I explain it like this, they understand how it works and are fine.)

:thumbsup:

L

Cms do things differently and rightly so...having read your comment I would like to ask how you protect yourself against non payment if you ask for a deposit for the first month of fees and then refund the parents??

over the years retainer and deposit have become a bit blurred...they are 2 different things altogether...a retainer is not refunded a deposit gets refunded at the end of the contract.
Many cms continue to find themselves short of fees because they have not held a deposit until the very end...then they may end up in court...that is costly

We could compare selling our services to renting a flat/house...no landlord would allow a new tenant in unless he/she had paid a deposit in advance...and that is kept until the end of the lease and refunded when the landlord is happy no damage to his property had occurred and appropriate notice given to end the lease

Personally I feel this is the way cms should see a contract and sale of services to parents...parents who have a deposit held by their cms are less likely to walk away from the contract

[lollipop kid]

Cms do things differently and rightly so...having read your comment I would like to ask how you protect yourself against non payment if you ask for a deposit for the first month of fees and then refund the parents??

Have found myself only once in this situation but, thankfully, I also do my own contracts. In my contract, I explain that if parents terminate the contract during the settling in period (usually 4 weeks), then they lose the deposit. (I got the idea to do this by looking at terms and conditions of some of the local nurseries to me - this is similar to what they do.)

I haven't done the split deposit for ages so forgot exactly how I worked it. I have looked again at my contracts, and I ask for full payment of deposit before child joins, therefore the only split I could do is half deposit when parent signs the contract with me, and half when they pay their advance fees for the first month. Apologies if I've confused anyone. (I also use retainers, by the way, which I manage separately to the deposit.)

I am covered by my contract and I make sure the parent has read and is aware that they stand to forfeit their deposit when they sign up should they not take up the space, or choose to terminate the contract during the settling in period. I always take 4 weeks payment (fees) in advance as well.

Hope that helps,

L

[smurfette]

[QUOTE="lollipop kid;1393956"] Have found myself only once in this situation but, thankfully, I also do my own contracts. In my contract, I explain that if parents terminate the contract during the settling in period (usually 4 weeks), then they lose the deposit. (I got the idea to do this by looking at terms and conditions of some of the local nurseries to me - this is similar to what they do

I always wondered about what to do in this situation what if child didn't settle? Not parents fault and they lose deposit?

[lollipop kid]

[QUOTE="lollipop kid;1393956"] Have found myself only once in this situation but, thankfully, I also do my own contracts. In my contract, I explain that if parents terminate the contract during the settling in period (usually 4 weeks), then they lose the deposit. (I got the idea to do this by looking at terms and conditions of some of the local nurseries to me - this is similar to what they do

I always wondered about what to do in this situation what if child didn't settle? Not parents fault and they lose deposit?

I find that parents usually want the space confirmed in advance of starting. I therefore also take a retainer (4 weeks at 50%) to secure their space, but I also offer the parents the option of starting the contract 4 weeks early and bringing their child on their normal days (or even building up to full days using the retainer to cover it), but for 50% of the time. This way, the child is usually settled before the time the parents go back to work.

I find this works really well at my setting. I can only recall one time when the child didn't settle, and that was because they were only coming 1 day a week - the other 4, they had a Nanny! Now I impose a 3 day minimum on my spaces, but each to their own.

L

[smurfette]

And do you do this as well as a deposit? I usually find that the parents need to start fairly soon after the previous child leaves so I don't usually have more than a week or so to settle in..
What happens if you cancel in the settling in period say you get a screamer? Great to hear about how others do it!

[lollipop kid]

And do you do this as well as a deposit? I usually find that the parents need to start fairly soon after the previous child leaves so I don't usually have more than a week or so to settle in..
What happens if you cancel in the settling in period say you get a screamer? Great to hear about how others do it!

Options you can use are to extend the settling in period. Or if you just have to terminate the contract, then refund the deposit plus any advance funds paid.

L

[Simona]

[QUOTE=smurfette;1393957]

I find that parents usually want the space confirmed in advance of starting. I therefore also take a retainer (4 weeks at 50%) to secure their space, but I also offer the parents the option of starting the contract 4 weeks early and bringing their child on their normal days (or even building up to full days using the retainer to cover it), but for 50% of the time. This way, the child is usually settled before the time the parents go back to work.

I find this works really well at my setting. I can only recall one time when the child didn't settle, and that was because they were only coming 1 day a week - the other 4, they had a Nanny! Now I impose a 3 day minimum on my spaces, but each to their own.

L

Absolutely...I agree each to their own
I was asking about how you would cover yourself ...or any cm really...if any parent decided to deviate from the contract and say...as an example...gave you the incorrect/short notice or owed you money?

We do hear about cms having to resort to legal action or small clams court...could that be avoided if a deposit was retained until end of care?

Do cms state clearly if notice can be given anytime? for instance ....I request notice at the start of the month....the reason is once I have done my admin and banked the c/vouchers and other fees I do not want to go back and refund vouchers as it is too bureaucratic

Interested to hear other views ...especially on deposits which is the one area my solicitor tweaked rather a lot in my contract...it seems to have worked...for me anyway.

[mumofone]

If you get parents to pay a months fees in advance on the premise that no payment = no childcare, isn't that effectively a deposit anyway?

[Simona]

If you get parents to pay a months fees in advance on the premise that no payment = no childcare, isn't that effectively a deposit anyway?

Personally I don't think so...but others may differ in opinion.

A deposit is a safeguard...the amount you take you refund ...MINUS...any money owed to you at the end of care.

Payment in advance is good practice and sound business....half way through the month it will have been used for care received and other essential such as food....what happens if a parent decides to leave without proper notice on week 3?

I believe many cms are reluctant to take a deposit because they feel it is a lot of money...possibly true but parents also get huge amounts of help towards childcare....in addition to the much flagged up 'free childcare'
My view is ...not at providers' expense though!!!

[lollipop kid]

Personally I don't think so...but others may differ in opinion.

A deposit is a safeguard...the amount you take you refund ...MINUS...any money owed to you at the end of care.

Payment in advance is good practice and sound business....half way through the month it will have been used for care received and other essential such as food....what happens if a parent decides to leave without proper notice on week 3?

I believe many cms are reluctant to take a deposit because they feel it is a lot of money...possibly true but parents also get huge amounts of help towards childcare....in addition to the much flagged up 'free childcare'
My view is ...not at providers' expense though!!!

Totally agree with Simona.

Occasionally, parents try to do things with a Childminder that they wouldn't try with a Nursery setting. One of these is not paying a deposit (or even a retainer) to a Childminder (which they would have to pay to a Nursery). Why should our terms of business be any more lenient to parents than those of a Nursery?

When I was first putting my terms and conditions together, I asked what other Childminders do in the local area. I also researched the terms and conditions of local nurseries. I found it to be good practice and gave me lots of confidence in my own terms when I arrived at them.

Just my opinion, but it's not a bad starting point if you're trying to get your head around how exactly deposits are used in Childcare. (I also like Simona's example of renting a house. It's exactly the same principle with us. If you don't take a deposit equivalent to the notice period, then if a parent leaves without giving any notice, you're left with an empty space, which you haven't been able to advertise. It may also be that they leave just before you are due to go on two week's holiday - with no holiday pay from the parent. Yet you still need to pay your rent/mortgage/bills etc. Deposits are there to safeguard us.)

All the best,

L