This came from another thread, I wanted to hear what you guys thought about it.

"He did get an invoice 7 days in advance of his renewal date, he put in a cancellation request 2 days before his renewal date, which is not the 7 days notice we require and is clearly stated in the TOS. He got angry with us after being informed of that and then admitted in the ticket that he did not ever even read the TOS. The reason he got the late fee is that he refused to pay the invoice and then his account was automatically suspended later and a late fee was added."

So, what I gather from that is if a client has a shared host/vps, they need to cancel 7 days before the next billing cycle, or they get charged a fee?

Hosting is always prepaid, why would you charge a fee to a customer for service they did not use?

I'm open to suggestions, what is your cancel policy?

I think 7 days is a little too tight IMO. I would say 30 days for annual, semi-annual and quarterly .. For monthly plans, it's hard to do it within 7 days.

In general, I'm on the lenient side. If I were to terminate/suspend my customers after 7 days of late payment, I think I would have lost quite a few of them. Plus, once you get on the bad side of things there's no return. I know your customer already intended to leave but you'd be surprised how many return or refer others.

Again, it all depends on your management style and audience.

Regards

I have seen this happen before and most tend to offer a full refund.

At the end of the day, why shouldn't you refund it? - they haven't recieved what they paid for yet, you haven't lost anything.

I offer a prorated refund if they cancel within the first 30 days after their renew date. This prevents chargebacks. regardless of your TOS there is no guarantee they read or understand it. By giving leniency you reduce your financial burden of chargebacks and negative PR.

In my opinion this issue has no single straightforward answer.

For me two days or three days looks very less. 7 days looks reasonable. Many times I procrastinate during the weekdays
due to to time pressure and finish most such payments etc during the weekend. Mostly on Saturday mornings. I would expect any
one to have that kind of leverage in this busy world.

I definitely understand for the business owner, it is a drain on resources, but it is part of the game. It would be ridiculous to pull the plug too early.

I have been thinking about this topic for a while. Given to me, I would suspend a non paying customer after 48 hours and pull
the plug completely after 168 hrs (7 days).

Blocking resources beyond that point is not healthy for any business, and i think it is reasonable time for a client,
if one really wants to continue.

I am definitely looking for some standards on this, but there does not seem to be one in the industry. It is the market that seems to be deciding.

Just my 2 cents.

We send our invoices out 10 days before payment is due. We send a reminder about the unpaid invoice on the due date.

Then we send an "overdue" notice every day, until 5 days overdue.

On the 3rd day, we personally call the customer at whatever phone number they have in our system, and to try contact them. If nobody is home, we leave a voicemail message.

On the 5th day, we suspend their service.

On the 10th day, we terminate their service.

There are no exceptions. If the customer wants to play games with payment, then they should go somewhere else.

It always amazes me when a customer comes to us after their service has been suspended, and they are actually UPSET that we suspended them...

When this happens, we politely expain that we do not work for free.

One small point I'd also like to add, is that if service is suspended for non-payment, we absolutely require them to submit a credit card authorization form to make their payment.

This protects us from the crazy customers who would simply pay their bill to unsuspend their service.. then take their files and go somewhere else.. and then do a chargeback.

If the customer is legitimate, and you provide high quality service.. then they should not have a problem with any of this.

I don't think the OP is talking about late charges. I think he's referring to how some hosts require that you cancel your servers X days in advance of the due date or another month of service is charged.

I think this is more common in the VPS/Dedi market as they have fees that they incur per VPS/Dedi and if they don't get proper notice of cancelation, they're responsible for the fees without payment coming in.

I could be wrong, but that's what I'm thinking.

If this is the case, I think it's reasonable to ask for a 7 day notice for cancelation, but they would have to give an invoice notice GREATER than the 7 day cut off. Perhaps give an invoice notice 14 days before due date with a note in the invoice that they have 7 days prior to due date to cancel without being subjected to next month's fee. I know that it may already be stated in the TOS, but, lets be honest, not everyone reads them and it's just good customer service to remind them whenever applicable.

Correct, that's what I mean. I see shared/vps hosts doing it, don't really understand it. Seems like it's just a shady way to try to make more money.

Yeah, I don't know why shared/reseller hosts do it. It's kind of like setup fees. Most people automate the setup of shared/reseller accounts so there's no reason to charge a fee. In my opinion, they're just gouging their clients. It makes sense for VPS/Dedis, because there's a lot of manpower that goes into those setups and initial costs involved, but shared/reseller is a no-brainer and adding on extra fees just shows how much you really respect your clients.

Now there are exceptions where set up fees may be appropriate, but these are few and far between.

I have seen this happen before and most tend to offer a full refund.

At the end of the day, why shouldn't you refund it? - they haven't recieved what they paid for yet, you haven't lost anything.


Other than this more than likely the op will just do a charge back, and then might as well charge back the rest of the charges as well. Then you get to spend time fighting it.

For what? 10-30 bucks? not worth it in the end they win. So save yourself the headache and just refund it.

I think this is more common in the VPS/Dedi market as they have fees that they incur per VPS/Dedi and if they don't get proper notice of cancelation, they're responsible for the fees without payment coming in.


This is only the case if someone is simply a reseller. For those of us who have cage space etc we do not incure these costs.

Not bashing resellers but when stuff like this starts happening and causing problems with customers due to one month fee's due to cancellations it really creates a headache and puts no trust in hosting companies from a customers point of view. And hence can end up making everyone elses lifes crap in the future.

If you can't afford to incure losses in your business model, your doing somthing very very wrong.

I've let the best of me cost me money in the past when it came to dealing with overdue clients. We have a 7 day cancellation notice for VPS and dedicated servers as we have fixed costs that we must pay and I believe that is very reasonable to ask for.

In the past I've allowed clients to be a few days late as they have issues with Paypal or their merchants were delayed in depositing their funds, but I'm starting to tighten up since I've had a few clients now that just stop responding and leave me with unpaid invoices. For those clients that I talk to on a regular basis and have developed a relationship with, nothing ever comes as surprise as they inform me if they will be a few days late or not. If it's a customer that never responds to my customer service inquiries about how their servers are doing, I don't tend to be as easy with the overdue invoices since those have been the type of customers in the past that have cost me thousands in lost revenue.

I've even tried the whole, pay me for half the month deal to be helpful of their situation, but it seems like a waste of time.

It's a difficult one. In many ways if it's in the TOS, it's the user's own fault for not reading it properly. This happened to me before - I was staying with the same VPS company, but decided I wanted to downgrade (and *thought* I remembered someone saying that this company didn't accept downgrades). So I created a new account, then submitted a cancellation request (on the old account) 3 days before the next invoice was due. The billing staff member got annoyed with me ("Why didn't you simply ask to be downgraded?" etc) and charged me a $10 late fee.

This was, I guess, fair enough since it was in the TOS (which I did read, but years ago when I signed up to this host).

Although in principle if seems very harsh to have a 7 day cancellation period - I see no real reason for such a policy. Maybe a 2 business day cancellation period (so that the host can have enough time to cancel the user's hosting before their invoice is due), but 7 days seems arbitrary and a bit harsh.

I think it has to do with the fact that some big companies need to do a whole was of processing in the back end when there's a cancelation, so they need to know 7 days in advance to give them a chance to remove the billing and set the service to pending delete.

This brings up a good thing and is actually a reminder. I've been meaning to change the required notice to a shorter amount of time. I used to have 10 days, but, we had a staff meeting like 3 weeks ago and I threw in the idea that we should shorten up the time and I wanted to see what the rest of the team thought, they agreed to 48 hours (Which is what I wanted to shorten it up to). I had an investor (who backed out on me) that said he would only invest if we had a 10 days notice policy.

I'm thinking 48 hours is a good amount of time, depending on how you process cancellation requests. The way we do it is the customer submits the cancellation request, we see it, and send a response asking for a certain piece of information as well as a confimation about what all they want cancelled, (which packages, do they want to cancel their domains? etc.) and require a response for confimation. Sometimes this can take around 48 hours depending on how active the client is with his emails.

Our late fee policy is 5 days incurs a late fee, 7 days is suspension. These are shared hosting accounts, we only deal with shared and shared resellers. We are very lenient if we actually get an email from a customer that asks for an extension. That is even part of the welcome email the billing rep that handles their account creation/verification and creating a custome coupon code for their friend to use, as well as the welcome email I send them.

I've let the best of me cost me money in the past when it came to dealing with overdue clients. We have a 7 day cancellation notice for VPS and dedicated servers as we have fixed costs that we must pay and I believe that is very reasonable to ask for.

In the past I've allowed clients to be a few days late as they have issues with Paypal or their merchants were delayed in depositing their funds, but I'm starting to tighten up since I've had a few clients now that just stop responding and leave me with unpaid invoices. For those clients that I talk to on a regular basis and have developed a relationship with, nothing ever comes as surprise as they inform me if they will be a few days late or not. If it's a customer that never responds to my customer service inquiries about how their servers are doing, I don't tend to be as easy with the overdue invoices since those have been the type of customers in the past that have cost me thousands in lost revenue.

I've even tried the whole, pay me for half the month deal to be helpful of their situation, but it seems like a waste of time.

it is always unfortunate not to get paid for the service you deliver, be that web hosting business or any other. but the op didn't asked about overdues, he asked about cancellation procedure. for instance, if i ordered your service on march 14, and today (april 12) i submit a ticket in which i state that i want to cancel my hosting. what do you respond to that?

For those withing our 30 day money back guarantee, no matter if it is one minute before the processing time (9am Central US Time) of that 30 days, we will cancel their account and issue a full refund even if we don't get to the ticket for a few hours, or days, or a month lol. Tickets don't last that long with us, but, I'm just trying to give a visual for ya :)

7 days isn't just for the host. I have numerous clients that canceled with the required 7 days and the day AFTER their due date they were calling begging not to shut it off. Fortunately for them, since we appreciate their cancellation 7 days prior to their due date, we usually give them another 3 days grace period to ensure that there is no lost data on their part.

I'm looking to shorten my time as well but right now it seems that 7 days keeps the client on their toes and I want to make sure that nobody loses any data.

For those withing our 30 day money back guarantee, no matter if it is one minute before the processing time (9am Central US Time) of that 30 days, we will cancel their account and issue a full refund even if we don't get to the ticket for a few hours, or days, or a month lol. Tickets don't last that long with us, but, I'm just trying to give a visual for ya :)

i'll be a pain in the ass now :) but what if a cancellation has nothing to do with money back guarantee? so, customer doesn't want any money back, you require 7 days cancellation notice, but customer gives you only 2 days notice?

If I didn't invoice two weeks in advance, I wouldn't have a problem with it, but if a client knows they're going to cancel then the invoice should at least trigger that action to give notification.

This came from another thread, I wanted to hear what you guys thought about it.

"He did get an invoice 7 days in advance of his renewal date, he put in a cancellation request 2 days before his renewal date, which is not the 7 days notice we require and is clearly stated in the TOS. He got angry with us after being informed of that and then admitted in the ticket that he did not ever even read the TOS. The reason he got the late fee is that he refused to pay the invoice and then his account was automatically suspended later and a late fee was added."

So, what I gather from that is if a client has a shared host/vps, they need to cancel 7 days before the next billing cycle, or they get charged a fee?

Hosting is always prepaid, why would you charge a fee to a customer for service they did not use?

I'm open to suggestions, what is your cancel policy?


Referring back to that thread, confusion, or at least surprise, might have been avoided with a concrete example in the FAQ, with a pointer to it from the TOS. The terminology can be confusing to anyone. But, if you will recall, the customer was from Egypt reading a TOS written in English.

If the TOS had said, for example, "we bill on the 23rd day of the month, and cancellations are required to be made by the 16th of the month", then there might be very little discussion. Specifics are always good. As you can see, even in this thread there was some confusion as to the situation being presented.


If a business charges on varying days, then an example using actual examples can help in the education process. If a business chooses confusing wording and interpretations for their TOS, then the business ought to be prepared to take the lumps. Certainly, there is a long standing legal theorem wherein ambiguous contract wording is held against the author of the document as the author ought to have been able to express the intent clearly and without ambiguity.

In my book, my reaction would depend on what I was selling and what it cost me. If it was, say, a resold dedicated server I was adding management on top of, I would insist upon advance notification so I'm not stuck with paying the extra month for a server.

In our case, just today my wife fulfilled a cancellation request for a $5/month service who's invoice became overdue yesterday. This is for a service that costs us little to provide, and sure by our ToS we could have smacked him with a late fee and insisted he pay another month and yada yada yada - but it'd probably be the most expensive $5+ we'd have made so far. Better in this case to just eat the "$5 lost" and call it a day rather than making an enemy.

So while I do think it's important to have a strict terms of service as a tool to protect you from someone trying to do you over, sometimes depending on what it will actually cost you it's better just to let that money slide so even if the customer's leaving, they leave happy.

i'll be a pain in the ass now :) but what if a cancellation has nothing to do with money back guarantee? so, customer doesn't want any money back, you require 7 days cancellation notice, but customer gives you only 2 days notice?

Well, we're covered there :) We have changed our policy, I posted an announcement on it, just not changed our ToS. We now only require 48 hours before the invoice is due (everything is updated at 9am Central Time, every day).

However, whether or not the client wants their money back we will give them a refund if it is within our 30 days. Its just easier that way. Chargebacks are annoying.