Head to Settings>>Registration, where you will find the cancellation notice period to control how much notice your customers must give you when cancelling classes.
If a customer cancels after your cancellation cutoff they will lose any class credit and won't receive a refund if they were paying a drop-in. The customer will also appear in your reports as a late cancel.
Advanced settings allow you to set different cutoff times for different class types.
For example, you could set a lower cutoff time for your more popular classes, that you know will be filled easily.
Or set a higher cutoff time for classes that may be harder to find replacements for.
Note. if you are using a Nightly Black Out Period, the time during the black out period will not count as notice period.