deposit-refund

---
name: deposit-refund
description: Turns your booking types into one written deposit and cancellation policy that applies the same way every time, tests each term against the Consumer Rights Act and the current CMA guidance, replaces anything non-refundable in all circumstances with a sliding scale you can defend, and writes a one paragraph decision note for each real case. Use before a busy season, after an argument about a kept deposit, or when a review accuses you of refusing a refund.
---

# One deposit rule, applied the same way every time, and the note that defends it

You give this your current deposit and cancellation wording, the booking types you actually take, what each one costs you when it falls through, and the cases in dispute. You get back a policy that separates a deposit from a prepayment from a cancellation charge, each term tested against the statutory fairness rules and the CMA's published guidance with the passage quoted, a sliding scale in place of anything absolute, and a dated decision note per case. It does not decide a dispute, tell you a term is enforceable, or tell you what a court would do.

## What it does

1. **Separate the three moneys, because owners argue about deposits while meaning three different things.** A deposit is a binding reservation, taken to hold the date. A prepayment is part of the price paid early. A cancellation charge is a sum payable because the customer cancelled. The CMA's guidance treats them as three problems: retention of prepayments when the consumer cancels, disproportionate termination fees and financial sanctions, and requiring consumers to pay for services not supplied. Write down, per booking type, which of the three you take: the twenty pound per head Christmas booking, the room deposit, the full prepayment on a tasting menu, the hire fee on a function room. Half the disputes in hospitality come from a venue calling a prepayment a deposit in its own wording and then behaving as though it were a reservation fee.

2. **Write out the fairness test you are actually being judged against, once, at the top of the file.** Section 62(4) of the Consumer Rights Act 2015: "A term is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer." Section 62(1): "An unfair term of a consumer contract is not binding on the consumer." Fairness is judged under 62(5) by reference to "all the circumstances existing when the term was agreed and to all of the other terms of the contract". Note what this means in practice: the term is tested as it was written, not as you apply it kindly. A harsh clause that you never actually enforce is still a harsh clause.

3. **Kill any term that makes money non-refundable regardless of circumstances, and quote the reason.** The CMA's guidance is explicit: "A term which makes any substantial prepayment entirely non-refundable, regardless of the circumstances or the amount of costs and losses caused by termination, potentially allows the trader to make an unjustified gain and is more likely to be unfair." The grey list in Schedule 2 backs it, listing a term whose effect is "permitting the trader to retain sums paid by the consumer where the consumer decides not to conclude or perform the contract, without providing for the consumer to receive compensation of an equivalent amount from the trader where the trader is the party cancelling the contract". Search your own wording for "non-refundable", "under no circumstances", "in all cases" and "at our discretion", and list every hit.

4. **Keep a genuine deposit only where it meets all four conditions the guidance sets.** The CMA states that retention is more likely to be fair where "a prepayment is set at a level that reflects the ordinary expenses of the trader when a consumer cancels", and that "A genuine deposit may legitimately be kept in full as long as it operates as a binding reservation and the trader makes clear to the consumer at the earliest opportunity that a deposit is required, and the precise circumstances in which it would be non-refundable. Those circumstances must be clear and narrow, so that the trader does not have wide discretion to retain the deposit." It adds the size limit in the same breath: "such a deposit will not normally be more than a small percentage of the price. A larger prepayment is more likely to be unfair as it may amount to a disguised penalty." So a ten pound hold on a table of six can survive. Full prepayment on a wedding, retained whatever happens, will not.

5. **Replace the absolute term with a dated sliding scale, and lay it out as a table.** The guidance accepts this: "It may be acceptable for a contract to contain a sliding scale of termination or cancellation charges but there must be no circumstances in which they are likely to be disproportionate or punitive. Such a scale, if given appropriate prominence, can provide consumers with certainty and clarity as to their position if they need to cancel." Its worked example of wording more likely to be fair charges nothing beyond a stated number of days, then a stated percentage, described as "a proportionate contribution towards the costs incurred by the Company in organising and staffing the Event". In Clipper Ventures Plc v Boyde the Sheriff Principal, quoted in the guidance, upheld a scale because "It is shown not in small print but in a very clear form, namely a table of cancellation charges in ascending scale."

6. **Work out what you actually lose, honestly, and subtract what you save.** The guidance treats a charge as more likely to be unfair where it does not reflect "any savings for the business associated with no longer having to provide the goods, digital content, or services", "any ability of the business to mitigate (reduce) any loss following the cancellation, for instance by finding another customer", or "any benefit to the business of receiving a payment earlier than it would otherwise have done". For a venue that is concrete: food not bought, staff not rostered, the table resold at seven o'clock on a Saturday, the room resold in December but not in February. Build the scale from those numbers per booking type and per season, and record the arithmetic. It also bars claiming "all its costs and expenses, not just its net costs resulting directly from the breach" and bars recovering both costs and lost profit where that compensates twice.

7. **Do not defend the scale as a genuine pre-estimate of loss, because the Supreme Court retired that phrase.** In Cavendish Square Holding BV v Talal El Makdessi and ParkingEye Limited v Beavis [2015] UKSC 67, handed down 4 November 2015, the court held that "The concepts of 'deterrence' and 'genuine pre-estimate of loss' are unhelpful. The true test is whether the impugned provision is a secondary obligation which imposes a detriment on the contract-breaker out of all proportion to any legitimate interest of the innocent party in the enforcement of the primary obligation." Lord Hodge's formulation reached deposits directly, applying the doctrine to "clauses requiring payment of a non-refundable deposit if that deposit is 'not reasonable as earnest money'". So the defence you write is: this is the legitimate interest, this is the proportion, here is the arithmetic. Not: we estimated our loss.

8. **Get the cancellation right question right in both directions, because both errors are common.** The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 give a fourteen day cancellation right on distance and off premises contracts, but regulation 28(1)(h) disapplies that Part for "the supply of accommodation, transport of goods, vehicle rental services, catering or services related to leisure activities, if the contract provides for a specific date or period of performance". A table booked for the fourteenth of December, a room booked for a named night, a function on a fixed date: no statutory fourteen days. A gift voucher with no date, or a membership, is a different question and must not be swept in. Never tell a customer they have fourteen days when regulation 28(1)(h) applies, and never tell them they have none without checking whether the booking names a date.

9. **Publish it once, prominently, and write a dated note for every case you decide.** Section 68 requires a written term to be transparent, "expressed in plain and intelligible language and it is legible", and section 64 protects a price term from assessment only if it is "transparent and prominent", prominent meaning "brought to the consumer's attention in such a way that an average consumer would be aware of the term". Section 64(6) removes that protection entirely for grey list terms. So the scale goes on the booking page, the confirmation email and the function contract, not in a linked policy nobody opens. Then, per case: the date, the booking type, the notice given, what the scale says, what was kept, what was refunded, what was saved or resold, and who decided. That note is the defence, and it takes four minutes on the day and cannot be written six months later.

## Then it checks

1. Every booking type is classified as taking a deposit, a prepayment or a cancellation charge, and the customer facing wording uses the same word the classification uses.
2. No surviving term makes any sum non-refundable regardless of circumstances, and every term struck for that reason carries the CMA paragraph or the Schedule 2 entry that struck it.
3. Every retained deposit that is kept in full is a binding reservation, is disclosed at the earliest opportunity, states clear and narrow circumstances, leaves no wide discretion, and is a small percentage of the price, with the percentage stated as a figure.
4. Every cancellation charge in the scale is supported by written arithmetic naming the costs avoided, the resale prospect for that booking type and season, and no item counted twice.
5. The fourteen day position is stated for every booking type, with regulation 28(1)(h) cited where it applies and the reason stated where it does not.
6. Every decided case has a dated note naming notice given, the scale band applied, the sum kept, the sum refunded and the decider, and no case is recorded as decided without one.

Any check fails: name it, redo that step once. Failed twice: say what is wrong and stop.

## Rules
- Public information only.
- Never invent a fact, a number or a quote.
- Anything sent in someone's name says whose name it is. A refusal letter written as though the manager wrote it goes to the manager first.
- Never tell an owner that a term is fair, enforceable or compliant, and never tell a customer that a term is unenforceable. Fairness under section 62 is decided by a court on all the circumstances, and a document that says "you are fine" stops the owner asking the people who could actually tell them.
- Never decide an individual dispute, calculate a settlement figure as a final answer, or draft a reply that closes a complaint. Prepare the facts, the wording and the arithmetic for the owner to decide.
- Must refuse to write, restore or tidy up any term that keeps money regardless of the circumstances, however it is phrased, including "non-refundable booking fee", "administration charge retained in all cases" and "at management discretion". If asked for one, say why and stop.
- Never carry last season's policy forward without re-reading the source. The CMA's unfair contract terms guidance was updated on 22 July 2026, and a quotation that was right in June was out of date in August.
- Never state a typical deposit percentage, no-show rate or cancellation rate for a single venue. No published figure exists for one independent business, and a scale built on a borrowed number cannot be defended with arithmetic, which is the only defence that works.
- This output is a working document prepared for the owner's solicitor or trade body to check before it is published or relied on, and for Trading Standards to see if they ask. It applies published guidance and statute to draft wording. It is not legal advice and it is not a ruling that any term is fair.

## Built from
- Consumer Rights Act 2015, Part 2, sections 62, 64 and 68, https://www.legislation.gov.uk/ukpga/2015/15/section/62, /64 and /68, in force 1 October 2015, read 16 September 2026: the fairness test in step 2 and the transparency and prominence requirements in step 9, including section 64(6) removing the price exemption for grey list terms.
- Competition and Markets Authority, "Unfair contract terms guidance" (CMA37), https://www.gov.uk/government/publications/unfair-contract-terms-cma37, guidance document dated 22 July 2026, publication page published 31 July 2015 and last updated 22 July 2026, read 16 September 2026: paragraphs 6.59 to 6.67 supply steps 1, 3, 4, 5 and 6, including the grey list entries quoted at footnote 255, the deposit conditions at 6.62, the mitigation points at 6.63 and the sliding scale at 6.64 with the Clipper Ventures quotation at 6.67.
- The Supreme Court of the United Kingdom, press summary, Cavendish Square Holding BV (Appellant) v Talal El Makdessi (Respondent); ParkingEye Limited (Respondent) v Beavis (Appellant) [2015] UKSC 67, https://supremecourt.uk/uploads/uksc_2013_0280_press_summary_704e24a9f6.pdf, issued 4 November 2015, read 16 September 2026: the retirement of "genuine pre-estimate of loss" and the out of all proportion test in step 7, and Lord Hodge's treatment of non-refundable deposits as earnest money.
- The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, regulation 28, https://www.legislation.gov.uk/uksi/2013/3134/regulation/28, read 16 September 2026: the accommodation, catering and leisure exception at 28(1)(h) in step 8.

# deposit-refund

## You are given
A folder for one UK hospitality business. It contains: the current customer facing deposit and cancellation wording, copied verbatim, with a note of where each piece appears (booking page, confirmation email, function contract, terms page, printed card). A list of booking types the business takes, each with the sum collected in pounds or as a percentage of the price, when it is collected, and whether the business calls it a deposit, a prepayment or a cancellation charge. For each booking type, the owner's figures for what a cancellation actually costs at different notice periods: food and drink not bought, staff hours not worked, third party costs already committed with the supplier named, and an honest note on whether that slot is normally resold in that season. The list of live disputed cases, each with booking type, booking date, date of cancellation, notice given in days, sum held, sum refunded so far, and the customer's stated reason. And, already decided by Claude and supplied as text: the classification of each booking type into deposit, prepayment or cancellation charge; the proposed sliding scale bands; the replacement wording for any struck term; and the fourteen day position for each booking type with the reason.

## Produce
Write into a `./deposit-refund-output/` folder:

1. `current-terms.csv` with these columns in this order: `term_ref`, `term_text_verbatim`, `where_it_appears`, `booking_types_affected`, `money_type`, `absolute_language_found`, `absolute_phrase_verbatim`, `status`, `authority_cited`. `term_ref` is D001 upward. `money_type` is exactly one of `deposit`, `prepayment`, `cancellation charge`, `unclassified`. `absolute_language_found` is `yes` or `no`, set to `yes` only where one of these appears in the term text: `non-refundable`, `non refundable`, `under no circumstances`, `in all cases`, `in any event`, `at our discretion`, `at management discretion`, `no refund`. `status` is exactly `kept` or `struck`. Every `struck` row carries a non-empty `authority_cited`.
2. `deposit-test.csv` with columns: `booking_type`, `sum_collected_gbp`, `full_price_gbp`, `percentage_of_price`, `is_binding_reservation`, `disclosed_at_earliest_opportunity`, `circumstances_clear_and_narrow`, `no_wide_discretion`, `small_percentage_of_price`, `all_five_met`. The five test columns are `yes`, `no` or `not stated`. `percentage_of_price` is computed from the two pound figures, never estimated. `all_five_met` is `yes` only where all five columns read `yes`.
3. `sliding-scale.csv` with columns: `booking_type`, `season`, `notice_band`, `charge_percentage`, `charge_gbp_example`, `costs_avoided_gbp`, `third_party_committed_gbp`, `resale_likely`, `net_loss_gbp`, `charge_exceeds_net_loss`. `notice_band` is written as a plain range in days, for example `more than 28 days` or `7 to 13 days`. `resale_likely` is `yes`, `no` or `not stated`. `net_loss_gbp` is computed as committed cost minus costs avoided, and `charge_exceeds_net_loss` is `yes` or `no`, computed, not judged.
4. `cancellation-rights.csv` with columns: `booking_type`, `contract_names_a_specific_date_or_period`, `fourteen_day_right_applies`, `regulation_cited`, `reason_verbatim`. `fourteen_day_right_applies` is exactly `yes`, `no` or `needs legal check`. Where it is `no`, `regulation_cited` must read `Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, regulation 28(1)(h)`.
5. `case-decisions.csv` with columns: `case_ref`, `booking_date`, `cancellation_date`, `notice_days`, `booking_type`, `scale_band_applied`, `sum_held_gbp`, `sum_kept_gbp`, `sum_refunded_gbp`, `costs_avoided_gbp`, `resold`, `decided_by`, `decision_date`, `note_written`. `notice_days` is computed from the two dates. `sum_kept_gbp` plus `sum_refunded_gbp` must equal `sum_held_gbp`, and any row where it does not is listed in `gaps.md`.
6. `policy.md` - the replacement wording exactly as supplied, laid out with the sliding scale as a table in ascending order of charge, one table per booking type, each under a heading naming the booking type and the date the policy was written. Nothing is rewritten, softened or improved. Booking types with no supplied wording are omitted here and listed in `gaps.md`.
7. `gaps.md` - a numbered list of: every term with `money_type` of `unclassified`; every struck term with no replacement wording supplied; every booking type failing one or more of the five deposit conditions, naming which; every scale band where `charge_exceeds_net_loss` is `yes`; every booking type with no cost figures supplied; every booking type where `resale_likely` is `not stated`; every case row where the sums do not reconcile; every case with no decider or decision date; and every place in the customer journey where the scale does not appear.

## Rules
- Codex measures, records and checks. It never invents, never rewords the owner's copy, and never makes the judgement that was supplied to it.
- Never write a new contract term, never soften a struck one, and never replace an absolute phrase with a milder phrase of its own. Replacement wording is supplied or the row goes to `gaps.md`.
- Never write that a term is fair, unfair, enforceable, unenforceable or compliant. Record the test results and the authority cited, nothing more.
- Never compute a settlement figure as a recommendation and never write a reply to a customer. `case-decisions.csv` records what the owner decided and whether it reconciles.
- Never fill a missing cost, a missing price or a missing notice period with an assumption, a percentage of another figure, or a zero. Missing is `not stated` and goes to `gaps.md`.
- Never write a deposit percentage, a no-show rate or a cancellation rate described as typical, standard or industry practice. No such published figure exists for a single independent venue and none is to be written into any file.
- Every percentage in every file is computed from two supplied pound figures and the arithmetic is reproducible from the row.
- Every quoted term, guidance passage or statutory provision is copied exactly, including punctuation and capitalisation, and carries the date the source was read.
- Use British English, £ and DD Month YYYY dates. No em dashes in any file you write, and any supplied text containing one is recorded verbatim and flagged in `gaps.md`.
- Every file ends with this line: this is a working document prepared for the owner's solicitor or trade body to check before it is published or relied on. It applies supplied guidance and statute to draft wording and is not legal advice or a ruling that any term is fair.

## Return
The absolute path of each file written, the row count of each CSV, the number of terms kept and struck with the authority that struck each one, how many terms contained absolute language and the exact phrases found, the number of booking types meeting all five deposit conditions and the ones that failed with the failing condition named, the highest and lowest charge percentage in the scale and every band where the charge exceeds the computed net loss, the count of booking types by fourteen day position, the number of case rows where the sums do not reconcile with the case references, the number of booking types written into `policy.md`, and the `gaps.md` item count.