It could be something small, like not enough frosting on a cupcake (if they're finicky like that), or it could be huge, such as a falling cake or decorations. Either way, those people will try to contact you, and if they can't, they will tell everyone they know that they are dissatisfied with your service. You definitely don't want to be talked about in a negative way, so the best thing to do is address it straight away.
Whether you have them pick up the product or you drop it off, be sure that the customer inspects the product. Not just a quick glance, but be sure they really look at it: the front, sides, back, and anywhere in between. If the customer paid in full before the date of the event, then technically you can leave right after dropping it off. Just be sure to have your phone on in case there are any questions or complaints, or even compliments. If you accept the final payment upon delivery/pick up (which to me is a recipe for disaster), then you stay until you are paid, which should give the customer plenty of time to inspect the product.
Now let's say they are dissatisfied with what you gave them. Not a little dissatisfied, but they don't like the product to the point of demanding their money back. What do you do?
Well, it all depends. Are they making a huge deal out of nothing? Are they complaining about something that you've explained in the past, or is in your contract? Did they eat the entire cake, was satisfied, but then started to complain days later? Any of those situations are more like personal problems by the customer. Maybe they're having a bad or stressful day, or perhaps they were pressured into complaining by a friend of family member. Whatever the case may be, calmly explain to them why things are they way that they are. If you discussed the subject of the complaint in the past, bring up that conversation. Emails are the best when it comes to those things because now you have proof of what you talked about. Contracts are just as good because you can refer back to it, plus they signed it. If they continue to complain, maybe you can come to a compromise, such as offering them 10% off on their next purchase. Or you can simply apologize for the misunderstanding and put them on your "do not deal with these customers" list.
Real problems, though, are more difficult to handle. Suppose the whole cake slid off of the drum, or it tasted so bad that no one could eat it. In those types of situations, I would suggest refunding them as much as you can, whether that be the whole amount, or whatever wasn't non-refundable. Apologize profusely to the customer, and do NOT defend yourself. Defending yourself will only sound like excuses, and the customer will most likely not care. They paid for a service, and you promised to deliver a quality product, so you need to own up to your mistakes.
A decorator recently took on a cake for a birthday party. Here is the inspiration cake:
|Via Sweet Cheeks Sugar Boutique|
|You get what you pay for.|
|Batman cake with the second cake in the background.|
All these "excuses" the decorator came up with obviously fueled the discussion in that group. Most people were on the customer's side, and only a couple were with the decorator. In my opinion, the decorator should have stuck to apologizing and offering the refund. Burnt cake isn't what you expect from a "professional," and neither is, well, the whole cake. Also, the decorator should have politely asked the poster to take the pictures down, and to discuss the situation in private instead of having words on a public forum. The whole situation resulted in the decorator's business Facebook page being shut down after many personal messages from angry locals.
In all reality, this "decorator" should not have been charging people for cakes they clearly do not have the skills for, so the cake, and business, was doomed from the start. Because of the decorator's bad attitude towards the situation, they will now be known for refusing a refund and denying they did anything wrong instead of being pleasant to work with. When these things happen, it's useful to remember that the customer is always right, even if they happen to be wrong. A little bit of bad publicity can ruin even the best business.