A customer cancels an order and the conversation is never comfortable. She has paid an advance, the cloth is cut, and she wants her money back. You want to keep her as a customer and you do not want to lose a day's work. Both are possible, but only if you decided the rule before she asked.
This is the rule most tailoring shops in India end up at, and why.
Charge for the stage the garment has reached
A cancellation is not one thing. It is four, and the fair number is different for each.
Nothing has started
She ordered yesterday, you have not touched the cloth. Return the advance in full. You have lost nothing but a slot, and a full refund here buys you a customer who comes back and tells people you were fair.
Measurements taken, cloth not cut
You spent twenty minutes with her and wrote the measurements down. Keep a small fee - many shops keep a hundred or two - and return the rest. Say it plainly: this is for the fitting time, not a penalty.
Cloth is cut
This is the line. Once cloth is cut it cannot go back, and it is cut to her body, so it cannot go to anybody else. Keep the cloth cost and the cutting charge. Return whatever is left of the advance.
Tell her the cut pieces are hers if she wants them. Most say no, but the offer makes the charge feel like a charge and not a loss.
Stitching is done or nearly done
There is no refund here, and there should not be. The garment exists, it fits her and nobody else, and the work is finished. What you can do instead is hold it for a month in case she changes her mind, and tell her you will.
Write it on the receipt
Every argument about a cancellation is really an argument about what was agreed. If the rule is on the receipt she took home, there is nothing to argue about.
One line is enough:
Advance is refundable until the cloth is cut. After cutting, cloth and cutting charges apply.
Print it small at the bottom. Nobody reads it when they are happy. Everybody reads it when they are not, and it ends the conversation in ten seconds instead of ten minutes.
Bridal and bulk orders are different
A bridal order blocks weeks of your calendar and turns away other work. A school uniform order means cloth bought in bulk that you cannot return.
For both, take a larger advance - a third is common for bridal - and say at the order that it is non-refundable after a stated date. Write that date on the receipt too. A bride who cancels three days before the wedding has cost you a month you cannot get back, and no general rule covers that.
When to bend the rule
Rules exist so you do not have to decide when you are upset. They do not exist to be followed off a cliff.
Give the money back when she is a regular of many years, when there has been a death in the family, or when the cancellation is your fault - a missed date, a bad fit you could not correct. A refund in those three cases is not a loss. It is the cheapest advertising you will ever buy.
Keep a record of every cancellation
Write down who cancelled, when, at what stage, and what you refunded. After six months that list tells you things you cannot see one order at a time:
- Whether cancellations cluster in one season, so you can take a bigger advance then
- Whether one kind of garment gets cancelled more, which usually means you are quoting a delivery date you cannot keep
- Whether the same customer does it repeatedly, in which case take the full amount up front next time
If your billing runs on paper this means a notebook. If it runs on software, cancel the order there rather than deleting it, so the record survives.
The short version
Refund in full before you cut. Keep your costs after you cut. Put the line on the receipt so nobody has to remember it. Bend it for the three reasons worth bending it for, and write down every one so you can see the pattern.
Handled that way, a cancellation costs you an afternoon. Handled badly, it costs you the customer and everyone she talks to.