The Beauty Industry Wearing a Frown Due to Reservation No-Shows 'Noshow'

Sales Hit Due to Many Reservations
Dispute Over Refund of Cancellation Fees
Demand for Increase in Deposit Charge Standards

Lee (29), who runs a nail art shop in Wonju, Gangwon Province, is currently struggling with customers who disappear on the day of their reservation. Lee's shop operates on a system where customers prepay for a fixed number of sessions, and the cost is deducted according to the treatment amount. However, some customers have started frequently canceling their reservations on the day of the appointment, causing losses.

The beauty industry is suffering due to no-shows?customers who do not show up after making a reservation. The reservation deposit regulations established by the government several years ago lack legal enforceability and do not cover the various no-show situations across different industries, leading to criticisms of their ineffectiveness.

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According to a report by the Hyundai Research Institute, the annual revenue loss caused by no-shows in five major service sectors, including beauty salons, hospitals, and restaurants, amounts to 4.5 trillion won. Employment losses due to reservation cancellations also reach 108,000 people annually.

Among service industries, the beauty sector, which operates on a reservation basis, has been hit particularly hard. Kim (30), who runs a one-person beauty salon in Icheon, Gyeonggi Province, lost about 500,000 won in monthly sales last November due to no-shows. Three customers who had booked perm and magic treatments did not show up. Kim said, "Perms and coloring take a long time, so I have to keep several hours free for one customer," adding, "If a customer suddenly cancels, the sales corresponding to the reserved time disappear."

The reservation deposit system, introduced by the government as a last resort, is also not very helpful. According to the Consumer Dispute Resolution Standards revised by the Fair Trade Commission in 2018, if a consumer does not cancel at least one hour before the reservation time, they must pay a penalty of up to 10% of the usage amount. However, this is only a recommended guideline to refer to when there is no separate contract between the parties involved and has no legal enforceability.

Therefore, if customers strongly demand a refund of the penalty, business owners have no choice but to comply reluctantly. Lee, the nail art shop owner, said, "Customers who initially asked to deduct the reservation fee from their prepaid sessions later changed their minds and demanded a refund," adding, "Since it is a neighborhood business, I had no choice but to refund to maintain the shop's image."

Experts advise that the Consumer Dispute Resolution Standards should be supplemented to reflect the characteristics of various industries. Professor Eunhee Lee of Inha University’s Department of Consumer Studies said, "Since the business types differ among self-employed sectors such as dining and beauty, it is necessary to revise the consumer dispute resolution regulations related to no-shows in detail," emphasizing, "At the same time, business owners should also engage in promotional activities regarding reservation deposit refund policies through self-employed associations."