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"What happens when your event gets canceled?"

Quick disclaimer: what follows is not legal or accounting advice. My recommendation is to speak with an individual well versed in consumer law for your country or jurisdiction. With that said, the following information comes from years of conversations with attorneys across North America and Europe.

The following scenarios are real-life case studies of outdoor events being unprepared for adverse weather. "Weather" or not, the same advice applies to indoor events.

One of my first questions for any event organizer is, "what happens when your event gets canceled?"

The most common response is, "that's never happened." When it does happen the first time, the outcome is usually less than ideal.

On several projects with new clients, the standard response (when pressed) goes as follows. "We have a clearly stated no refund policy. If our event doesn't happen. We don't need to give people their money back!"

According to multiple attorneys, that's a legally sound position. That legally sound position also comes with a caveat and an important consideration.

Regardless of your event's terms of service, if an event ticket was purchased with a major credit card, the rules are different. Because you have a "no refund" policy means little to the credit card companies.

If your event attendee feels like you didn't deliver on an aspect of your event, the consumer can initiate a chargeback. With rare exception, the credit card companies will fight to protect the consumer and get them their money back.

That means credit card companies can forcibly take chargeback money out of your bank account, plus a chargeback fee. This is a big reason why ticketing companies hold a ticket sales reserve on your ticket sales.

If you haven't already, ask your ticketing company / merchant account provider what their policy is regarding chargebacks.

Too many chargebacks could result in not being able to process credit card transactions. Your best bet for avoiding credit card chargebacks is by having an event cancellation contingency place in place, before your event. To get you started here's a question to ask yourself and your team ...

"If you can't give a refund to an event attendee, how can you make that person happy?"

You then need to think through all the aspects associated with the above question. How are you going to get that message to event attendees? What happens when people demand a refund on social media (because they will)? Who's going to execute your contingency plan? Plus numerous additional questions and considerations.

Clients who have had cancellation contingencies and execution plans in place have kept chargebacks to the single digits (on tens of thousands of annual transactions) and refunds to a minimum.

Most important of all, they've gained trust with a very loyal customer base ... which is essential for long term growth of any event.

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