Piano World Home Page Forums Our Most Popular Forums Piano Teachers Forum What happens to the deposit when they quit?

I started my home studio a couple of years ago, in addition to teaching at a private school.
After a few students signed on, I decided to write a OFFICIAL policy, since I wanted to be professional and weed out any "we'll try for a couple of months, maybe or maybe not pay, never practice, and then quit."

So, I wrote that there was a deposit due before first lesson, the amount of one month's lesson. I wrote that it covers testing for placement, the binder, lots of enrichment pages, recital hall, printing costs, and a reserved time slot for the student.

However, I neglected to write what happens when a student leaves!

And, I did not write that it was non-refundable. HELP!!

Yes, they gave 30 day notice. Yes, she is a good student, just overwhelmed with high school. Yes, they always paid on time, no problems.

Yes, she will coming back this summer.

So...

What do I do with the deposit? Some of it was obviously used/spent.

Thanks in advance!!

Do you have elsewhere detailed in your policy that you never give refunds? If not, that would be highly recommended, and then reiterated regarding the deposit.

Regarding having a deposit, I'm not sure I understand. It is quite high, first of all, why did you choose one month's lessons for the amount? "A reserved time slot for the student" should come just with paying for lessons in advance. I can't imagine a recital hall costing that much unless you only have one student, but across several, shouldn't it be much more affordable?

I guess what I'm saying is that you may want to reconsider this fee. You do what you want, of course, but to me it sounds a bit like when you go to rent an apartment and they ask for first and last month's rent upfront, so when you move and fail to give proper notice, they've already collected the rent for that time. But really, what you give I doubt amounts to the cost you are charging, so perhaps change this to a "Registration fee" of like $25 per student per semester or year, or charge a recital fee for participants and increase your lesson rate to accommodate the other expenses.

I think you will have to refund the student, or just not have them pay for the last month of lessons, especially since they seem to like you and want to start back up later. Even though that is pretty unlikely, it does sound as though they at least want to keep a positive relationship with you.

I'd recommend that you don't use the word "deposit" in the future. In general, people view a deposit as something that is initially saving their spot for them, and will be returned later.

Something like "Initial Setup Costs" or "Fees for Initial Materials" would be more applicable for what you're using the money for, and is clear that money won't be returned. I see a number of teachers around here do something similar.

In this case, with the student coming back in the summer, you could either offer the parents that part of the deposit can be returned now to them (and they'll need to pay it again in the summer), or they can keep the remaining portion of the deposit with you to keep an opening reserved for resuming summer lessons.

This is an easy one: Yes, she will coming back this summer.

Let them know you will move the deposit to the summer session, if she decides not to continue, that it is non refundable.

I would give them the deposit back. It's not fair to charge it in the first place. Testing for placement goes with the territory. A painter gives an estimate for a house for free. Even lawyers give a half hour of time for free.

A reserved time slot goes with the payment of tuition.

A recital hall is to be expected. Most piano teachers do at least one recital per year.

If you charge for printing, you can charge the exact amount you spent. Nobody tries to get rich from printing off pages.

I have heard of music schools that charge a registration fee. Even this is ridiculous. It takes me one minute to write down somebody's name, address, phone number and email address.

The original fear is not well placed. If you charge for lessons in advance and they quit, power to them. They're kids. They try things. You get the enjoyment of meeting another young person. It's not going to hurt you. It might give you ideas on how to do better next time. Once I had a student quit after about seven weeks. I realized I was trying too hard to be the child's friend and chalked it up to experience. I would stick with a strong policy of insisting on payment in advance if you're worried.

I am a piano mom, not a teacher. Here is my observation.

Some teachers charge non-refundable registration fee ($30 or $40 per year) and ask for one year tuition of post-date cheques. Cancellation can happen anytime. All cheques will be returned. Some teachers do not ask for registration fee, and offer try-out lessons for one month, then ask for one year post-date cheques. Some teachers prefer cash. Some teacher charge $10 a year for recital for every student. Some charge $15 for students that want to play in the recital.

Different teachers have different policy. But a deposit as much as one month tuition, never heard of.
I know one mom asked for try-out lessons for one month, so as to see that if the kid and teacher have chemistry, then she will pay the registration fee. The teacher declined that mom, saying that he cannot negotiate with every parent about the established policy. The mom was so angry and was telling everyone in a public forum.
However, that teacher has a long waiting list of kids. He appears in the national competition every year as accompany for his students.
Whether you should keep the deposit, depends on how long your waiting list is, and whether you can afford the angry parents spread out this event in public.

Write up an itemized list of how the deposit has been used, and then return the un-used portion. I think that's more than fair.

I have heard of one month deposits. It is usually applied to the final month of tuition. This family did not fulfill their obligation of the full series of lessons so it would be forfeited. But if they are wanting to start in the summer, it would be nice to just move the deposit to hold the spot.

Our studio does a 30 day notice to cancel - if you don't give notice you pay. It's sort of like a deposit. I would not register if I was required to write bad checks. I would not have cash on hand to cover them if something happened and they were cashed. Even post dated would make me uncomfortable.

I get an email the week my bill is due and go in and pay it. You can pay online too. My bank will even send a check on my behalf. But I have to go in so i might as well pay.

If a family leaves, I really like the idea of an itemized bill with the remaining returned since you are charging for that last month.

It is also ridiculous when students show up for a lesson at after the end of a month or semester and say that they will pay next week - and then disappear.

Stuff happens.

It's not so easy to say, "Sorry, Nick, you can't have a lessons because your mom forgot to pay and just dropped you off. So just sit here. No lesson for you."

Theoretically a registration helps balance out such situations.

It's not a perfect world.

At the school where I take, there is no registration fee for adults but there is a $25 fee once a year for the kids. The adults just have their recitals at the school. The kids have anywhere from 4 to 6 recitals a year at the performing arts center at a local university that has to be rented. The school also at times provides free tickets for local concerts. In addition, the kids have to do evaluations so they have to pay the judges. I actually think the $25 fee is pretty reasonable for all they get. However lessons are quite expensive at $46 for a half a hour and double that for an hour. They also have a group of performing kids who perform locally and once a year with our symphony.

If this "deposit" is a payment for extra expenses such as binder, recital hall, printing, and the initial testing, then they have paid for a service and goods that they have received. The "reserved time slot" doesn't fit with this list, and I can't make sense of it. I imagine that if the student is coming back this summer, then the payment for these extra expenses still applies, and they won't have to pay for them again, since it's still the same services, but there isn't a reason for a refund either. Then if they come back in the summer, they would start paying for each month's lessons as before.

You wrote in your preamble, "to weed out any "we'll try for a couple of months, maybe or maybe not pay, never practice, and then quit." This is an entirely different thing, and it looks like you have mixed a bunch of things together. I'm thinking that the thought process is that people who are frivolous will not be willing to put down this kind of "deposit" and so this an assurance of not getting those kinds of students. The psychology might be correct, but the actual business thing you set up ... payment for certain goods and services - doesn't fit with it. It's a confusing mishmash of business terminology for a particular thing, meant for a different purpose (weed out frivolous students).

In regards to the actual expenses, in a business we usually set our fees by calculating our expenses and adding profit to come up with the final fee. Interviews with potential customers, supplies and services are usually all part of the calculation, and the actual fee that each customer pays covers all of these things already. Or, you can do as you have done, and charge a one-time (annual?) fee for these extras. But what you charge should be for the purpose that you set out, so that you are transparent and appear trustworthy. So if this payment was for services and goods, then you don't have to pay them back, because they received those services and goods. (If I'm seeing this right.)

(I run a business, and I also have taught in the past, including one-on-one.)

A good idea.

There's no "right", here. There's only -- if it's possible -- what will make both you and the parents say:

. . . "We're happy with this."

A written policy might be useful in the future.

Thanks, everyone!
Still mulling it over, and I will let you know how I change my contract, and what I decide with this student...in a week or so...

I only have seven at home students (well, six now), and most are word-of-mouth and very good students and parents. It is the school parents that are crazy! And I am very thankful that I do not have to deal with any of the overhead or scheduling or payments there.

Yes, the hefty deposit was used to weed out the looky-loos, try and see for just a bit.

Lots to think about.

Thanks again!

Tell me more...I'm heading out for a weekend trip...laptop will keep me company!

UPDATE-

I changed my policy wording to Non-Refundable, and I lessened the amount by half. And, "deposit" has been changed to "registration and supply fee." And, it is one-time only payment.

The mom is fine, and we'll see how summer goes.



Thanks, everyone!

Sounds good, missbelle. We all muddle through running our studios, and learn as we go.