When booking in advance – a holiday, a flight, a hotel stay, a restaurant table, a cinema ticket, etc. – you’re often required to put some money down to secure the service. It’s only logical then that you may be asked for a down payment when booking a move as well – the movers need a guarantee that you won’t bail out and cancel the job at the last moment, costing them money in lost time.
Charging a moving deposit is a standard practice – many moving companies request a down payment to reserve a moving date, especially during peak moving season when their services are in high demand. It is a kind of insurance for the movers – if the customer cancels the move, they will have some compensation for their lost profit opportunities. The moving deposit, however, should be only for a small amount and should be refundable with sufficient notice of cancellation.
So, when looking for moving help and comparing the services of different moving companies, you’re strongly advised to compare their payment policies as well and find out if they charge a deposit or not before making your choice.
Do moving companies require a deposit?
It is not uncommon for a moving company to request a small down payment to hold a moving date, but not all movers charge a deposit – it’s up to the company. According to the law, every individual mover is allowed to set their own rules for deposits and terms of payment (the mover, however, is obligated to disclose these rules and terms to each customer in writing).
Therefore, charging a moving deposit gives no indication of the legitimacy or trustworthiness of a company – a good mover is equally likely to request or not request a deposit.
Yet, practice shows that most reputable companies do ask for a deposit, especially in big cities where the rate of house moves is very high.
Why are moving company deposits required?
Most moving companies have reservations calendars that help them plan their time and available resources, so that they can accommodate as many moving jobs as possible and provide quality services to their customers. This is especially important for reputable movers:
- Their services are always in high demand, so they need to be very careful when scheduling their time and accepting new jobs;
- They care about their good reputation, so they always keep their commitments.
Any last-minute changes to their reservations calendars disrupt the movers’ work and may affect other customers, so the moving companies want guarantees against such changes. They collect deposits to make sure that a customer won’t cancel the booking at the last moment – moving services take a lot of time and cost a lot of money, so the companies don’t want to send a crew only to find out that the customer has already moved or hired another carrier. The collected deposit is meant to compensate the losses incurred in such case.
So, a moving company deposit means commitment – both from the movers and the customers. It also provides some assurance of the reliability of the moving company – a carrier that requires a deposit is likely to be busy and being busy usually means that the company is thriving and successful and trustworthy.
Paying upfront, however, is always a risk – some rogue movers may simply disappear with the money. Besides, advance payments further complicate the process and may result in lots of headaches if you need to cancel the move.
What is a reasonable moving house deposit?
As already mentioned, asking for a deposit has become a common movers’ practice all over the country. Yet, every moving company sets their own terms and conditions and has its own policy. Therefore, the amount of the requested moving deposit may vary from one mover to the other and from one location to the next:
- The more expensive the city or state is, the higher the deposit will be because the cost of moving labor will be higher;
- The down payment amount will be larger when moving on a weekend or during the busy summer months;
- Deposits for long distance moves will be higher than deposits for local moves;
- The required amount will depend on the size of your move as many movers base the deposit on a percentage of the final moving cost.
In any case, however, the deposit should be a few hundred dollars at most – anything between $100 and $500 is considered reasonable. Larger down payments are not typical and should be seen as red flags of moving fraud.
Are moving deposits refundable?
It all depends on the moving company cancellation policy, but moving house deposits are typically refundable within a certain period of time.
In most cases, you will get a 100% deposit refund (with two weeks’ cancellation notice) and no reschedule fee (provided that you notify the company at least 5 business days in advance). If your new moving date doesn’t fit the moving company schedule, the deposit may or may not be refunded, depending on the company’ policy and the time-period of your move.
You’re strongly advised to check if deposits are refundable or not (ask about the company’s deposit policy and cancellation notice requirements) BEFORE booking your move, so that you don’t lose your deposit money in case you need to change your moving date or cancel the move.
Good to remember: The cancellation notice must be postmarked and mailed to the moving company by prepaid US Registered or Certified Mail, return receipt requested. No letters sent by regular mail and no e-mails, facsimile or telephone calls are deemed to be proper cancellation notifications.
What to be careful about when asked for a moving deposit?
While there’s nothing wrong with a mover asking for a down payment, you should be aware that:
- The deposit has to be for a small amount – Moving company deposits should not exceed 25% of the final moving cost. If a mover requires you to pay half of the total costs upfront, then it is likely that you are being scammed. An honest and reliable mover will never ask you to put down a large amount of money before the move takes place;
- The deposit is not a separate fee and should go toward the final cost of the move;
- Moving brokers always require deposits. The down payment, however, may not go towards the move itself – brokering companies often charge separate deposits that are used as fees for arranging the transportation of the household goods. You may think that you’re paying the moving company, but in fact you’re paying the middleman and may not even know who the movers are until the day of the move. Besides, when working with a with a moving broker, you may get an estimate that is much lower than the actual price you’ll have to pay for your move, as brokers usually give estimates online or over the phone and such estimates can never be accurate (click here to find out how to get an accurate moving estimate);
- Never pay the required moving deposit in cash – use a check or a credit card. It will be much easier to recoup your deposit this way (if it comes to that).
Good to remember: Do not assume that a moving company is operating a scam just because they request a deposit. However, do not pay any money or sign any documents until you have researched the company either. Verify the carrier’s licensing and insurance information, check their business rating, read moving reviews left by previous customers of the company, ask for references and recommendations, check the company’s complaint history, and examine the mover’s paperwork. If everything checks out, then you have nothing to worry about and the required deposit is just a guarantee of the finalization of the deal. Have a safe and smooth relocation!