Charging a Late Fee? Do they REALLY works?

Late fees are common and accepted in the hosting industry. The key to collecting on them, however, is to keep them reasonable.
 
zomgmike said:
Late fees are common and accepted in the hosting industry. The key to collecting on them, however, is to keep them reasonable.
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you need them reasonable, but at the same time at a price clients are going to think twice about being late in the future
 
Late fees sometimes proper and legal way. As we are storing the user's data and running their services without any issue though they haven't paid so there should be late fees.

Many clients used to pay the bills on time due to late fees.
 
webconfigure said:
Late fees sometimes proper and legal way. As we are storing the user's data and running their services without any issue though they haven't paid so there should be late fees.

Many clients used to pay the bills on time due to late fees.
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I agree, without late fees it would be chaos. Customers would theoretically just pay whenever.
 
charges are not really mean actually late fee are the dates the billing date is still remain same .
And it is really have to happen because it is reliable for us also

Hehe
 
We do charge a late fee but kept it reasonable. Our clients know it is there and it gives them motivation to pay on time. But sometimes life happens and if a client is late and doesn't have a history of being late or making excuses, then i have no issues with removing the late fee as a one time courtesy.
 
I always wonder why people find it difficult to pay late fees on hosting services, while they readily pay all other kinds of late fees such as the ones on their phone bills etc.
 
Kaustubh P said:
I always wonder why people find it difficult to pay late fees on hosting services, while they readily pay all other kinds of late fees such as the ones on their phone bills etc.
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Even some landlords and residential rental companies will impose late charges to your housing rents if your late and even in cases that you pay partially but don't pay the full amount on time. :confused:
 
Harv45 said:
Even some landlords and residential rental companies will impose late charges to your housing rents if your late and even in cases that you pay partially but don't pay the full amount on time. :confused:
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yes more and more companies do this these days and 1 sector has done this for many years (credit card companies)
 
While late fee's I think in everyone's mind sounds a reasonable thing to ask for especially when the customer decided not to pay on time, but collecting it I think is a whole other story which doesn't always end up happening. Let's put it this way if they aren't paying the original amount they owe you, most likely that late fee they aren't going to pay either and they will just move on to the next provider.
 
ronweeks said:
While late fee's I think in everyone's mind sounds a reasonable thing to ask for especially when the customer decided not to pay on time, but collecting it I think is a whole other story which doesn't always end up happening. Let's put it this way if they aren't paying the original amount they owe you, most likely that late fee they aren't going to pay either and they will just move on to the next provider.
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depending on how much they owe, adding a late fee then allows you to take the debt to the next level, but the whole point of adding a late fee is to encourage clients to pay on time It is reasonable to ask for a late fee as while the client is not paying even if you suspend them, their files etc. are still on your server using up space etc. Also you are having to chase the debt which takes your time.
 
Late fee should be added as client's will pay within due-date to avoid late fees.
If you donot apply late fees, then the clients would take the billing system for granted and it will affect the overall accounting.
 
We have tried late fees and the money gained was far outweighed by the extra customer churn this created.

However, we moved up the suspension, so you get suspended the day after the due date. This does get people to pay and doesn't annoy them as much as late fees and has the added benefit of them understanding the consequence.

We understand that we could lose customers this way, but "no payment, no service" is easier to understand than late fees.

Since the API for PayPal "Billing Agreements" has come along the customer now has to make an effort not to pay, the default is that they will pay.

Stripe are making recurring billing agreement changes to their API and as soon as they are ready for production, we will implement those too.
 
ughosting said:
Since the API for PayPal "Billing Agreements" has come along the customer now has to make an effort not to pay, the default is that they will pay.
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Yes we had various issues over the years with PP subscriptions, so moved to the PP billing agreements, which allowed us to try and take the funds if the client failed to pay
 
In some cases late fee is good but in some cases it not. We pay our bills on time just because we know if we will not pay on time then we will have to pay some extra charge as a late fee. So in this case many people prefer to pay bills on time.

But some cases late fee irritate a lot and put a question on loyalty.
 
techperx said:
In some cases late fee is good but in some cases it not. We pay our bills on time just because we know if we will not pay on time then we will have to pay some extra charge as a late fee. So in this case many people prefer to pay bills on time.

But some cases late fee irritate a lot and put a question on loyalty.
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late fees should not irritate anyone or put a question of loyalty as if clients pay on time then late fees will not bother them.

In the UK all utility companies use late fees if you pay late.
 
cloudcone said:
It works but in my opinion it is not targeted to make a profit but to avoid customers making late payments.
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yes you are correct as the last thing you want is clients paying a late fee.

It is just a consequential result placed on a client who has not paid their invoice on time and most times several days after the due date.

Simple thing to prevent paying a late fee is for the client to pay their invoices on time or contact their host to say they will be late in paying, so the host can extend the time for you to pay the invoice.
 
Late fees results in such a bad customer experience I am totally against it.

With shared hosting you don't really have an immediate cost if the customer doesn't renew on time. Why penalize them? Especially as it can potentially drive them out the door (the bad customer experience). A grace period if much more soft about this.

Now if you're leasing dedicated servers and reselling them sure you might have an immediate cost so MAYBE it becomes more acceptable but even still, I am against it.

Fact is, people don't really read the terms of service. Most customers won't even know you have a late fee policy. A day or two late they come with intent to pay, see the late fee and now they have 2 options: Pay the invoice inc late fee or move to another provider.
 
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