Should You Charge a Deposit Before Starting a Job?

Deposits are one of the most debated policies in service businesses — some owners swear by them, others worry they'll scare off customers. The right answer depends on job size and material risk, not a blanket rule either way.

What a deposit actually protects against

Three real risks: the customer cancels after you've ordered custom materials, the customer disappears after the job (rare, but expensive when it happens on large jobs), and your own cash flow gets strained by fronting material costs on a job you won't get paid for until completion.

When a deposit clearly makes sense

• Custom or special-order materials — if you're ordering a specific fixture, cabinet, or part that can't be resold, a deposit covering at least that material cost protects you if the customer backs out
• Larger jobs — for anything over roughly $1,000-1,500, a 25-50% deposit is standard practice across most trades and rarely raises objections
• New customers with no history — you have no track record with them yet; a deposit is a reasonable, non-personal way to manage that risk
• Multi-day jobs — deposits let you keep paying your crew and buying materials without financing the whole job out of pocket

When it's usually unnecessary

For small, quick jobs — a $90 drain cleaning, a $60 service call — a deposit adds friction for very little protection, since your exposure is small and the job is done same-visit anyway.

How to set the amount

A flat percentage (typically 25-50%) is simpler to explain than a flat dollar amount, and it scales appropriately with job size. For jobs with expensive custom materials, tie the deposit specifically to material cost rather than a generic percentage — "50% deposit, covering the cost of the ordered unit" is easy for a customer to accept because it's clearly tied to a real cost, not an arbitrary buffer.

How to introduce it without sounding suspicious

Frame it as standard policy, not a reaction to something about that specific customer: "For jobs over $1,000, we collect a 30% deposit to order materials — this is the same for all our installation work." Put it in writing on the estimate itself so it's expected before the conversation happens, not sprung on them at the last minute.

The cancellation question

Decide your deposit refund policy before you need it, not during an argument. A common, fair approach: fully refundable if canceled before materials are ordered, non-refundable (or refundable minus material cost) after. State this on the estimate.

The bottom line

Deposits aren't about distrust — they're about not financing someone else's project with your own materials budget and time. Collected consistently and explained clearly, they rarely cost you jobs, and they meaningfully protect your cash flow on the jobs that matter most. Estimate and invoicing tools that let you build a deposit requirement directly into the approval step — as ServiQ does — make this a normal part of the process rather than an awkward separate ask.