A cancellation fee is a charge imposed by an establishment when a customer decides to cancel a reservation or appointment after a certain period. This fee acts as compensation for any losses incurred due to the cancellation, such as lost revenue from other customers who could have taken the vacant slot or table. The amount of the fee may vary depending on the policy of the establishment and the nature of the service being cancelled. It is important for customers to be aware of these policies before making a reservation so they can make informed decisions about their plans.