When you set a Cancellation Fee on a service, these are the only times the fee will be charged:
Scenario #1: If the customer cancels their appointment outside of your policy, the booking app/online booking will give them a warning popup that to cancel their appointment they will be charged the cancel fee. If the customer accepts the charge, it will be charged to their card and their appointment will be cancelled. If the customer does not accept the charge, they will not be able to cancel their appointment.
Scenario #2: If you cancel/no-show the appointment, a popup message will appear for you to charge the cancel fee - You will be able to select "Yes, charge client" or "No, do not charge client"