Web Hosting Talk : Web Hosting Main Forums : Running a Web Hosting Business : Do you charge a reconnection or re-activation fee?

[okihost]

I have had some issues in the past with clients not paying on time and ignoring emails informing them of outdated cc, declined card and so on.

So about 4 months ago I started adding a $25 'reconnection' fee to all accounts which are 45 days or more past due to try and defer people from being so lax about making payments.

The main reason for this is I run several Ensim boxes and it is honestly painful when you have a reseller with 30+ sites that you need to suspend each site which takes 2-3 minutes each then suspend the reseller so it was becoming quite time consuming.

My question is do you have any type of fee like this for non-paying clients? It has honestly helped out a bunch with getting payments on time once it happened to those abusing the system but some have told me $25 seems too 'steep' personally I dont think so, after 10 warning emails have been sent I think it is in line but would like some feedback from other on this.

 

[Devil Inside]

I think $25 is a bit steep
What about tiering it?

1st offense - $5
2nd - $10
3rd - $20


that kinda thing...

Also - I feel that you wait too long before taking action. Once it's a day past due I send out an email stating that they must pay withing X days or their account may be suspended. That usually get's em going.

I don't really see the need to suspend a resellers entire clientbase either - just hit his main site - that would piss anyone off. No need to get his clients to leave him because he can't pay his bills. That may get him to leave you and you'll be out a reseller client. If you don't care about that - then just kick him to the curb as a recurring non-paying client.

[bhalsted]

Yes, we usually do a first offense with big warning and go from there. If someone does it all the time, get rid of them asap. Business is business.

[JayC]

I don't think $25 is necessarily too much, as long as you've made a good effort to avoid it getting that far. But another consideration would be how much people are paying for service anyway. If it's $2 a month, yeah $25 to set back up seems like a lot. If that itself is $25, then not so bad.

I guess I might lean towards limiting the amount for reconnection to the amount of one month's regular payment.

[jubinrr]

exactly,
when you don't pay for your servers form the place your leasing them, do they wait 45 days for you?
i'm pretty sure not, business is business, if they can't pay the hosting fee then they don't get the service...

that might sound somewhat "mean"
but its the truth, you need to pay your bills and so do they

[mrzippy]

Our terms of service stipulate that we MAY charge a "re-connection" fee. (we call it something else)

However, it is charged on an individual basis... sometimes we do and sometimes we don't.

Generally, for first offense we do not. For second offense we do.

For third offense we cancel their account and do not allow them to return.

Customers that don't pay more then twice are not worth having around...

[ajitknox]

Put it this way. When you dont pay your Cellphone bill or when you exceed your "Anytime" minutes, what do they do? Put a charge. The customers need to be more educated that hosting business is not a piece of cake. Business is business.

[Deb]

AJ is correct. If you do not pay your bills then ALL of your clients will go down. When your clients do not pay you it can hinder your ability to pay for the services they and others are using.

We deactivate accounts that become too far past due after sending notices alerting them to this fact. A business cannot afford to lower its quality of service for the paying customers because of becoming too lax with the nonpaying customers and trust me..the more lax you become the more non/late payers you will have as time goes on

If they have opened a line of communication with you, then by all means do what you can to work with them but if no communication has been opened to setup an appropriate payment plan then it's time to cut the service. Many people "cancel their accounts" by not paying... they often ignore a host's cancel form leaving you holding the bill for the hosting you provided that they have long forgotten about.

We do, if it comes to the account being deactivated, charge a $10 reactivation fee. We also delete accounts that have been deactivated for over 30 days.

[Yaser]

I agree with AJ. Since we are not given any chances for late bills, so we should also charge. But then its not about chances its about the cost incurred by having people who dont pay or reactivate their accounts, why should we keep them on our server and let them use our resources. Just for the reputation sake i would give them a warning and include in TOS from before the terms of defaulting on payment, reactivation etc.