What happens if a customer cancels a class but I don't add a cancelation fee?

Question:
So I am setting up my website and I offer pilates classes. People can pay per session or I offer a package with 10 sessions for a discounted price.

While setting things up I saw I can add a cancelation fee for when users cancel their session.

My terms are: you can cancel freely up to 12 hours of the session and you can reschedule. In those 12 hours before the session, you lose your money. It is already set that users can cancel or reschedule their session up to 12 hours before the session.

What happens when they are in the 12 hour window? They can’t cancel? They loose their money as I told them so?

Or do I really have to add the cancelation fee for this? Because how I read it, the cancelation fee is additional to the price they already paid.

Product:
Wix studio - cancelation fee

What are you trying to achieve:
What I want is this:

A user books a session with their previous booked ‘10 session package’. They now have 9 sessions left. But: they want to cancel.

So: when they cancel up to 12 hours before the booked session, they will get their session back in their package and they are back to 10 sessions they can book.

And: when they cancel within 12 hours before the booked session, they will lose their session from the package as if they would have come and their total sessions left in their package stays 9.

As for one time users with no package deal:
If they cancel up to 12 hours before the booked session, they will get their money back.
If they cancel within the 12 hours before the booked session, they will lose their payed money.

What have you already tried:
I am just setting up, nothing tried yet.

Additional information:
I am just curious if the system works like this already, or if the cancelation fee is something that I must add. I don’t want to have my customers pay double.