Money · 5 min read

Deposits and damage: how to charge without losing customers

30 June 2026

Damage charges fail for one reason: at the moment of the argument, you cannot prove what the item looked like when it went out. Everything else — the size of the deposit, the wording of the contract, how firm you are on the phone — is downstream of that.

Photograph at both ends, always

Two photographs, taken at handover and at return, attached to the specific rental. Not a folder on someone's phone. On the contract, where both you and the customer can see them. This takes about fifteen seconds and settles nearly every dispute before it becomes one.

Size the deposit to the risk, not the price

A deposit is not a proportion of the hire fee. It is what it would cost you to be without the item while it is repaired. A cheap tool that takes three weeks to replace deserves a bigger deposit than an expensive one you have four of.

Separate the deposit from the revenue

Deposits held are a liability, not income. If they sit in the same total as your takings, your month looks better than it is and your cash-up never balances. Track them as their own figure and reconcile them like you would a float.

Charge quickly or not at all

The window for a damage charge is the day of return, while the evidence is fresh and the customer is standing in front of you. A charge raised a week later reads as an afterthought and gets disputed. If you are not going to raise it that day, write it off and move on — the goodwill is usually worth more than the money.