Deposits

[tenderhearts]

In all my years doing daycare I've never had someone "hold" a spot or not start within 2 weeks. I have a family who is interviewing with me next week, they wont start until mid to late august, so I would require a deposit which it states in my contract. Do you guy cash this check or hold it until they start? I would worry that if I held it and they flaked out they could just put a stop payment on it but never have thought about this so if anyone can tell me what you do that would be great. thanks

[SunflowerMama]

I just ask for one week's rate per month to hold a spot. I have 2 families doing that over the summer b/c they are teachers and the kids won't start with me until late August/early September. Once the children actually are enrolled and in my care is when I will then take the 2 week "deposit". Both my fee to hold a spot and my deposit are non-refundable.

[tymaboy]

For me deposits are non refundable. I will not hold a spot for a certain length of time then refund it back to them when they start. I could have made money before they started & made more then what their deposit (holding fee) is.

[tenderhearts]

I ask for just a one week payment, so it should be non refundable right unless they back out fairly soon?

[momma2girls]

I would definately do at least a 2 week deposit to hold a spot for them. There are many, many daycares inc. in homes and centers that charge the whole rate per week, but then the child could come all week, and many do 1/2 the rate.

[tenderhearts]

So do you forward the deposit to when they start? sorry

[Lianne]

I charge a holding fee to hold a spot which is different from a deposit. A holding fee is to help make up for some of the potential income you're losing out on by holding that spot (and keeping it empty) for that month (or whatever length they need). Some people charge a week's fee/month, some charge a flat fee regardless of how long the spot is held for and some people charge in other ways.

A (security) deposit is a fee charged to ensure you receive adequate notice/payment for services at the end of the care agreement. That fee is generally used during the child's last week(s) of care and/or to compensate the provider for services already provided should things turn ugly. It's, literally, a secuirty deposit.

In my policies, a holding fee is non-refundable and it is not used as credit for care. It's compensation for lost potential income for holding that spot open until the family is ready to use it full time. I cash the cheque immediately and use it as income, because that's what it's replacing.

I don't charge a security deposit, it's just not done in my area. But, if I were, I'd cash the cheque upon receiving it then put the money into a separate account and hold onto it until the child finishes care then apply the deposit to the last week(s) of care. I might use the deposit at some point if I were strapped but do so knowing the family had paid it and come their last week(s) in my care I would not receive payment for them. I would not hold onto the cheque without cashing it because cheques expire and are invalid after a period of time, usually 6-12 months and if the provider/client relationship turns sour at the end, the client could easily put a stop payment on the cheque and the provider would be lose out on that income.

[momma2girls]

So do you forward the deposit to when they start? sorry

no, this is only to hold your spot and nonrefundable

[tenderhearts]

Ok thanks that's kind of what I thought but didn't really know how to word it.

[Michael]

More threads relating to Deposits: https://www.daycare.com/forum/tags.php?tag=deposit

[boysx5]

my deposit also non-refunable I had a family give me a deposit and a week later called to say that the wife lost her job when she didn't and I had already cashed the check for the very reason so they couldn't stop payment on it and they called a few times to see if they could get it back and I said thats why I have you sign a contract saying that you are sure you want the spot they then called a neighbor of mine who does referrals for our county and told them she didn't lose her job but they were staying at the center they were at and she told them no way you make her lose money by her holding the spot and now she has to look for someone else

[professionalmom]

A holding fee is to help make up for some of the potential income you're losing out on by holding that spot (and keeping it empty) for that month (or whatever length they need).
A (security) deposit is a fee charged to ensure you receive adequate notice/payment for services at the end of the care agreement.

I have both in my contract and I love your definitions. May I steal your definitions? I think this would explain the difference very well.

OP - My holding fee is non-refundable and once I have the money, it's mine to do with as I see fit. The deposit is refundable ONLY IF adequate notice is given and their account is current before they begin their last 14 days with me. Then I apply it to their last 2 weeks. I put it in the savings account that I use for taxes, which I view as a no-touch (not even in emergencies) account. Once they begin their last 2 weeks, I transfer the money to my personal account and it's mine, in lieu of them paying the last 2 weeks.