A client pulls the plug on the entire cabinetry portion of their project after weeks of sourcing, revisions, and vendor coordination. The order was never placed. The question is whether the procurement fee goes back to them.
You have been on this project for weeks. Four rounds of revisions on custom-built-ins. Vendor coordination. Construction documents finalized. The client approved and paid the invoice. You were on the verge of placing the order when they called to cancel the cabinetry, the countertops, and all the hardware.
Nothing was ordered. But everything else was done. Your time, your vendor relationships, your documentation, and multiple rounds of client revisions all of it sits behind a cancellation that came in at literally the last hour.
Now they want the money back.
This exact situation was brought to Interior Design Community as a Question of the Day, and it opened up a thorough conversation about what procurement fees actually cover, how contract language does (or doesn’t) protect designers in moments like this, and how to move through the conflict without it blowing up into something worse.
What This Question Is Really About
On the surface, the question is about a refund. Underneath it, it is about how designers define and communicate the value of procurement work.
Most designers charge a procurement or purchasing fee to compensate for the labor involved in sourcing, specifying, coordinating vendors, managing revisions, and getting a project to the point where an order can actually be placed. That work does not begin when you click submit on an order. It begins the first time you open a vendor catalog, contact a rep, or start building specifications.
In this case, all of that work was completed. The only thing that had not happened was the final submission.
The designer had a contract stating that refunds were at their discretion and explicitly outlining the procurement fee structure. That is a strong position. But having contract language and knowing how to apply it confidently in a live situation are two different things.
When a client does not understand what a procurement fee actually covers, they will feel blindsided when you tell them you are keeping it after an order never went in. That gap between designer expectation and client understanding is where most of these conflicts live.
“I’ve found I’ve had to really make it clear what procurement means, to us it’s obvious but to a lot of clients they think it’s just the actual purchasing not all the work in the lead up. No advice for this exact situation but going forward I’d suggest to walk clients through what the procurement fee covers xx”
@millieturnerdesigns
This is one of the most practical observations in the entire conversation. The fix is not a different contract the fix is a different onboarding conversation. Walk the client through what the fee covers before they sign anything, not after they have decided to cancel.
Why This Matters to Your Business
If you return the full procurement fee every time a client cancels before an order is placed, you absorb all of the risk. You do the sourcing. You manage the revisions. You coordinate with vendors and produce documentation. Then the client changes their mind, and that work costs you nothing to undo.
That is not a sustainable business model.
The labor the procurement fee compensates for has already been delivered. Returning it in full just because the physical order was not placed treats pre-ordering work as if it has no value of its own. It also sets a precedent with that client, and potentially with others in their circle.
“I always say you can choose to be nicer than your contract, but you can never be more strict than your contract. I’m glad that you’re charging a procurement fee to compensate you for your time and effort outside of what you’re charging for the product! Definitely, keep that; you’ve earned it as well as any fees that you owe the vendors. And beyond that, it’s probably not worth the fight. I’d refund what they paid toward the product itself if those orders truly have not been placed.”
@thecollectivefordesigners
This is the practical middle ground most experienced designers arrive at: retain the procurement fee, return the product funds if no orders were placed, document the decision clearly, and move forward. You have earned what you charged. The product money belongs to the client if no order was placed on their behalf.
If you have ever wondered whether your fee structure is actually protecting your time across different project stages, “Do You Actually Know What Your Interior Design Business Is Making?” is worth a read.
What to Do When This Happens
Slow Down Before You Respond
Your first instinct may be to respond immediately either to defend yourself or to make the discomfort go away. Neither reflex serves you well here. Before you send a single email or make a phone call, pull your contract and read it carefully. Know exactly what it says.
Then consider asking why the client is canceling.
“Before you react, I think you should sit down with them so you can understand why they are getting cold feet. It might be an easier fix than you imagine. They might just need reassurance that this is the right direction and everything is going to turn out beautifully. It’s a really big ticket item, so if they really truly don’t want it, I would refund them but let them know that your fees and profit will be deducted from the total, and this is a one-time thing and you won’t be doing this with anything else on their project.”
@lsi_workshop
Sometimes, a client who cancels cabinetry at the last minute is not actually done with the project. They may be scared of the scale of the investment, second-guessing the direction, or under undisclosed financial pressure. A conversation about why it can sometimes change the outcome entirely.
Document Everything the Fee Covered
Before you have the financial conversation, prepare a clear record of what the procurement fee compensated for: the number of vendor contacts made, the iterations completed, the construction documents produced, the sample requests sent, and the timeline coordination managed. Make the work visible.
This is not about building a legal case. It is about helping the client understand what they paid for. Clients who can see a documented list of completed work are far less likely to fight a fee than clients who feel like they are paying for something invisible.
If you are not currently tracking hours on procurement work, this situation is a strong argument for starting. Why Interior Designers Should Track Their Hours (Even on Flat Fees) covers why that habit protects you even when you bill flat fees.
“This is tough – if you weren’t ready to pull the trigger on ordering, you shouldn’t have requested payment from the client. Technically design fees cover the steps leading up to procurement – concept, specifications, drawings, etc. We define procurement as the purchase, logistics, QC and delivery/installation management. Also, since you mentioned you went through a few rounds of changes – make sure you have a CYA clause in your contract stating that hourly billing will apply after X number of revisions or reselections.”
@gebblebrown
This feedback is worth taking seriously. How your firm defines procurement and when payment is requested relative to when orders are placed shapes how clients interpret what they paid for. If your definition includes all pre-ordering work, your contract needs to say that explicitly. If it only covers post-order logistics, then this situation reveals a gap in your fee structure.
Know Your Floor Before the Call
Decide ahead of the conversation what you will retain and what you will return. If no orders were placed, returning the product funds is the right call for most designers. The procurement fee stays.
“You should get paid for the work you’ve done regardless if the client executes. If you have not procured though then you shouldn’t charge a procurement fee.”
@war.art.interiors
This reflects a useful framework: whatever your firm defines as procurement, the fee applies to what was actually done. Work completed equals compensation owed. Work not yet begun is a different conversation.
Your floor is that all delivered work deserves compensation. Whether that comes through the procurement fee itself or a separately articulated labor charge, the labor has value, and your contract should protect it.
Have the Conversation, Then Confirm It in Writing
After your initial discussion, follow up with a written summary. Note what will be refunded, what will be retained, why, and what the next step for the project looks like if the working relationship continues. A written record protects both parties and removes the ambiguity that fuels disputes later.
“You politely remind them of the contract and keep or charge your fee.”
@designrchick
That is the whole move. Be matter-of-fact, not apologetic. The contract exists. The fee was disclosed. The work was completed. You are not taking something from the client you are keeping what was agreed to.
“I would definitely have the discussion with them as to why they are pulling the plug on this – especially after all the time and work you have put into this already. Refund them but definitely deduct your fees, and then remove yourself from the project. They may not be your clients, and this could be a sign of things to come, should you continue.”
@corihalpern
Not every client who cancels at the last minute is a client worth keeping. A late-stage cancellation on a large scope item, after multiple rounds of revisions, can sometimes signal a pattern. Your contract protects you in this situation. Trust it.
What to Tighten in Your Contract
Use this situation as a prompt to review and strengthen your standard agreement. A few specific areas to look at:
Procurement fee scope: Define explicitly what work the procurement fee covers. If it applies to all pre-ordering activity vendor outreach, sourcing, iterations, and documentation, say so in clear, non-technical language. Do not assume the client will interpret it the way you intend.
Cancellation fee: Add a cancellation clause specifying a flat fee or percentage that applies when a client cancels after an invoice has been approved and paid, regardless of whether an order has been placed. This separates the question of product refund from the question of your labor.
Revision limits: If you went through four iterations on these built-ins, a clause capping revisions with hourly billing applying after a defined threshold protects your time and signals to clients that changes carry a cost.
Payment-to-order timing:
“I clearly state in my contract that there are zero returns and cancellations once approved invoice is signed and paid for…I do not give that until it is completely finalized. I don’t understand how if you have a finalized invoice approved and payment collected, that you didn’t place the order right away but that is just me.
As soon as payment clears I place the order within 24/48 hours unless it’s a weekend. If you decide to allow the refund for the product that’s totally up to you but I would not refund any of the procurement fee or design hours spent towards them as that is your time and it’s valuable. You could charge a percentage of cancellation as a cancellation fee. Best of luck.”
@timeless_interior_design_
A tight window between payment and order placement reduces the opportunity for last-minute changes. If you routinely wait several weeks between collecting payment and placing an order, you create a window in which situations like this can develop.
Moving Forward
This is an uncomfortable situation, but it is one of the more common hard conversations in the design business. Clients who cancel late are not always bad clients. Sometimes they are anxious ones who needed a different conversation earlier in the project. Sometimes they are clients who were not ready for the scope they signed on for.
Either way, you did the work. Your contract supports your decision to keep the fee. Walk through the documentation, have the conversation clearly, put it in writing, and use this project as a prompt to review the language in your agreement.
If you want to see how other designers navigate the moment when a client changes their mind after a decision has been made, When the Custom Sofa Arrives and the Client Wants Out: What Interior Designers Should Do covers a related scenario and for clients who seem hesitant long before that point, Why Interior Design Clients Ghost After the Consultation (and How to Stop It) is a useful read on spotting commitment signals early.
The Interior Design Community thread on this one is worth bookmarking. The range of perspectives from holding the line firmly on fees to sitting down with the client to understand what is really going on reflects how layered these situations are in practice. There is no single right answer, but there is a right process: know your contract, document your work, and have the conversation with clarity.