What If A Customer Refuses To Pay A Late Fee?

DerekBrett

Our facility offers many ways to pay rent. In person, over the phone, online, autopay, drop box. We also send out invoices 10 days prior to the due date. But yet every month we get tenants who pay late and believe they shouldn't have to pay the late fee. They try to hustle their way out with stories or just get mad and say it wasn't their fault.

What do you do or say when your tenants don't want to pay their late fees?

holly_fiorello

I had a client who told them they would remove the late fee one time if they left a positive review for them on google or yelp. Next time they were late the fee wouldn't be waived but it ended up working out for their benefit! 

Keep in mind Google is not going to like that you are incentivizing people to leave a review as it's against their terms and conditions. However, a lot of people have done it and have not been penalized. So try at your own risk.  

i43storage

I leave the late fee on their account.  If it is still there when they move out, it is removed from their security deposit.

ThriftyStorage

the electric company does not waive late fees!

DerekBrett

holly_fiorello said:

I had a client who told them they would remove the late fee one time if they left a positive review for them on google or yelp. Next time they were late the fee wouldn't be waived but it ended up working out for their benefit! 

Keep in mind Google is not going to like that you are incentivizing people to leave a review as it's against their terms and conditions. However, a lot of people have done it and have not been penalized. So try at your own risk.  

Hey that's some savvy managerial thinking!

StoreHere

Offer to waive the late fee if they sign up on auto CC.  Now it will be the tenant saying no and not you.  If you happen to get one that says yes, you have solved both of your concerns.

Freddy

StoreHere that is an EXCELLENT idea. I will do that myself.

skinman

We do that as well...if they set up auto pay with a credit card, I will waive the fee. otherwise, I won't. Our tenants are given 6 full days to pay, but rents are due on the 1st. if they are late, I process it as a regular payment, so the system pays the late fee first, then applies the rest to the rent balance. 

JohnV

I believe it all begins at the inception of the agreement and making sure that you thoroughly explain the agreement and the fee schedule and remaining firm on that. If for an serious life changing event you could offer to waive the late fee once in a 12 month period.

I think the best thing to do is what had been mentioned by StoreHere as I have had a lot of success when doing that, as skinman mentioned make sure that you are applying the late payment to the fees first and to the rent last because if this happens they will still be overlocked at the gate and unable to access their storage until full payment has been made.

I believe since we (storage industry) don't report to a credit agency for late payments is why we have a lot more people taking advantage of paying late, its almost feels like we are the last on someone's priority list sometimes.  Regardless make sure your policy is in place and firm all the time for all tenants and that all managers follow suit and when the customer wants to complain to a supervisor they will be informed of the same policy and just quit fussing and pay the bill.  

In regards to what holly_fiorello had commented on I would say to stay away from any bribing for anything because when that is over the customer will expect you to bribe them again next time. I'm not saying it is a particularly bad idea nor am I saying I haven't seen this before but it is against Google's policies and it could cause problems later on especially if the customer let's it be known publically that they are upset that you bribed them for a review. They will probably feel like they have a certain control over you and that they could also just change that good review around to a negative review and hurt the business reputation. Reviews should be real and honest and should be given by a customer by the service they received, so just be respectful and remember that you can't please everyone in this world.            

CVSSSTORAGE

We don't waive late fees, we give them 10 days past their due date to pay. If they cannot pay before the late fee that is not our problem. I tell them I cannot accept anything but what is on the screen and that I don't have the ability to change their balance. I also let them know it is in their lease that they signed and it is also circled.