A customer approves an iPad Pro screen replacement. You don't stock the part, so you order it in — call it $180 landed, using deliberately round numbers. Ten days later it arrives, you text the customer, and they've changed their mind, bought a new tablet, or simply stopped answering. You're now holding a $180 part for a model you might not see again this quarter. This article gives you a working rule for when to take a deposit before ordering repair parts, how to set the amount, and what your terms need to say so the deposit actually protects you.
When to Take a Deposit Before Ordering Repair Parts
Some shops take deposits on everything, which slows the counter down and annoys customers on routine jobs. Others take deposits on nothing, which means the customer carries no risk at all and the shop carries all of it. Both are wrong. The deposit question is really an exposure question: if this customer disappears, what am I left holding, and can I move it?
Here's the rule worth adopting: take a deposit whenever the part is not something you'd stock anyway, AND the landed cost of that part exceeds the gross profit on a typical job for you. Both conditions, not one.
The logic is simple. If the part is a common stock item — say an iPhone screen you turn over weekly — a cancelled job costs you nothing but a bit of bench time, because the part goes straight back on the shelf and sells within days. Demanding a deposit there is friction with no payoff. But if the part is a special order, a cancellation converts it into dead stock. And if that dead stock costs more than the profit on an average job, one ghosted order has just eaten the margin from your next completed repair. That's the line where a deposit stops being optional.
The arithmetic, on the whiteboard
Say your typical screen repair makes you $90 gross profit — sell price minus landed part cost, hypothetical numbers throughout. Now a customer wants a repair needing a $180 special-order part. If they vanish, you've lost $180 of cash tied up in a part with no ready buyer. It takes two completed average jobs just to claw that back. Two ghosted special orders a month and you've quietly donated four jobs' worth of profit to nobody. A deposit of the part's landed cost makes that loss zero: worst case, the customer has paid for the part and you've lost only the labour you never performed.
Notice what the rule deliberately ignores: how trustworthy the customer seems. Everyone seems trustworthy at the counter. The person who ghosts you was friendly on the day. Base the policy on the part, not on your read of the human, and apply it to every customer the same way — it's easier to defend and nobody feels singled out.
How Much Deposit Should You Charge?
Charge the full landed cost of the part, rounded up to a tidy number. Not 20%, not "fifty bucks to show commitment" — the landed cost. The purpose of the deposit is to transfer the exact risk you can't control (the customer walking) while you keep the risk you can control (your own labour and workmanship).
Landed cost matters here, not the supplier's sticker price. Parts coming into Australia carry more than the unit price. Worked example, framed hypothetically: a genuine-quality replacement display listed at USD $100. At an exchange rate of, say, 0.65, that's roughly AUD $154. Add a share of the consignment's express freight — call it $15 for this unit — and you're at $169 before GST on the import. If you're registered for GST you'll generally claim that import GST back, so your working landed cost is around $169. Round the deposit to $170 or $180. If you only quote off the USD sticker, a soft Australian dollar between order and invoice eats your buffer, so build a few per cent of exchange-rate movement into the number.
If working out landed cost per part sounds like a chore, it's exactly the kind of number your inventory management records should already hold against each SKU — supplier price, freight share and the date you last paid it. Quote deposits off that figure, not off memory.
The 50%-of-quote shortcut, and why it's second best
Plenty of shops take 50% of the quoted repair price instead. It's simpler to explain at the counter, and on high-labour jobs it produces a bigger deposit. The problem is at the other end: on jobs where the part is most of the price — which is precisely where cancellation hurts — 50% of the quote can be less than the part costs you. A $300 quote with a $180 part gives you a $150 deposit and leaves you $30 exposed. If you want one policy that never leaves a gap, part cost beats percentage. If you insist on a percentage for simplicity, use it with a floor: 50% of quote or the landed part cost, whichever is greater.
Deposits, GST and Your Books
The tax treatment of a deposit depends on what it actually is. Money taken as a part payment toward the repair is generally treated as consideration when you receive it, whereas a genuine security deposit can be treated differently — GST consequences may not arise until the deposit is applied to the job or forfeited. Which category your deposit falls into depends on how your terms are written and how you handle the money, and the distinction has real consequences for when GST is attributed and how refunds are documented.
Don't guess this one. Have a five-minute conversation with your accountant about how your specific deposit terms should be treated, and set up your billing and invoicing so every deposit is recorded against the job with a receipt issued on the spot — a deposit that lives in a technician's memory or on a sticky note is a reconciliation problem waiting to happen.
What Happens When the Customer Cancels?
This is where sloppy deposit policies fall over. "All deposits non-refundable" written in six-point font is the kind of blanket term that invites trouble under the Australian Consumer Law — broad non-refundable clauses and terms that let you keep money well beyond your actual loss can run into problems with unfair contract term rules and misleading-conduct provisions. The safer shape is a deposit that's refundable except to the extent of your genuine loss, stated plainly before the customer pays.
In practice that gives you three scenarios worth writing into your terms:
- Customer cancels before you've ordered the part: refund the deposit in full. You've lost nothing, so keeping anything is indefensible.
- Customer cancels after the part is ordered and it can't be returned to the supplier: you may retain the part cost from the deposit — and it's worth offering to hand the part over to the customer, since they've effectively paid for it.
- Customer cancels and the supplier accepts a return: refund the deposit less any restocking fee and return freight you genuinely incur, and tell the customer that figure before you process it.
Supplier terms drive a lot of this. Many overseas parts suppliers won't take returns at all, or charge restocking fees that make returns pointless on cheaper items, and return freight from Australia often kills the economics regardless. Know your main suppliers' return terms before you write your customer-facing policy — your policy can't be more generous than your supply chain.
One plain hedge: this is general guidance, not legal advice. Consumer law exposure depends on your exact wording and conduct, so have your terms looked over by a lawyer or check the ACCC's published guidance before you print them.
The Counter Procedure, Start to Finish
A deposit policy only works if the person at the counter runs it the same way every time. Here's the sequence:
- Quote the full repair price and identify whether the part is stock or special order. If it's special order and the landed cost exceeds your average job profit, a deposit applies — no discretion at the counter.
- State the deposit amount and the cancellation terms out loud, then get them acknowledged in writing on the ticket or by digital signature before taking payment. Terms disclosed after payment are worth very little.
- Take the deposit through your point of sale as its own recorded transaction against the ticket, and issue a receipt showing the amount, the job it applies to, and the terms.
- Order the part the same day and record the supplier, price paid and expected arrival on the repair ticket, so anyone in the shop can answer 'where's my part?' without hunting through emails.
- When the part lands, notify the customer immediately with a clear ask — book a time or drop in — and log the contact attempt. A dated trail of messages matters if the deposit is ever disputed.
- Set a collection deadline in your terms (30 days is common) and state what happens after it, including any storage handling, so an abandoned job doesn't sit in limbo forever.
Step 5 deserves emphasis. Most "ghosted" jobs aren't malicious — the customer got busy and your one text sank without trace. A follow-up sequence at arrival, three days, and seven days recovers a decent share of these jobs before the deposit terms ever get tested. Automating that through your customer communication tools means it happens even on the days the counter is slammed.
The Policy on One Page
Deposit required when the part is special order and its landed cost exceeds your average job's gross profit. Deposit amount equals the landed part cost, rounded up. Fully refundable before the part is ordered; after that, refundable less your genuine, documented loss. Terms stated and acknowledged before payment, every transaction receipted, every part order logged on the ticket, and a written follow-up sequence when the part arrives. Write those five sentences into your own numbers this afternoon, brief the counter staff tomorrow morning, and the next $180 no-show costs you a shrug instead of two jobs' profit.