Web hosting payment policy
In the web hosting industry, services are typically ongoing, which means that payment needs to be ongoing too. What happens when payments are overdue? There are several ways to handle this situation, discussed on this page.
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Suspend the account the day that payment is overdue
The reasoning is simple. Continued services haven't been paid for, so the services stop.
While any web hosts could have this policy, it's more likely to be in place with budget web hosting plans. When the profit margin is low, web hosts often can't afford to provide any more than exactly what's paid for. This policy is never popular, but those with higher-end web hosting plans in particular would expect more than a day's grace.
Leave overdue accounts for X days and then suspend them
"X" could be 3, 7, 10, or another number of days, depending on the web host. Having a few days before suspension allows web hosts to send out more reminders in case the account renewal was overlooked.
The higher the number of days, the more goodwill can come from clients who simply overlooked paying for their web hosting. On the other hand, some people will take advantage of a long grace period and pay only when they have to — and not necessarily with the same web host.
Leave overdue accounts alone indefinitely
Ignoring overdue accounts can happen by design or by accident. If there are only a few clients whose accounts are overdue, it won't make much difference to the company's bottom line. However, this way of doing things can mean that those who will never pay are getting continued free services. Also, if any clients have switched to a different web host or taken down their site and not informed the web host, the space taken up by that account is being held for nothing and not generating any revenue.
Tips on enforcing payment policies
- Have more than one email address on file for each client so that if email to one address bounces, you can use the other address.
- Send payment reminders 15 to 30 days before payment is due. Repeat the reminder if payment hasn't been made by or just before the due date.
- Include in the payment reminders the dates that the account will be suspended and then terminated if payment is received.
- Include information about the above steps that you will take in your Terms of Service.
- Ask clients to contact you if they wish to discuss payment arrangements.
- Keep backups of files for terminated accounts for a period of time after terminating the account in case the client really didn't receive the payment reminders.
- If you charge a fee to provide backup files to past or returning clients, keep it reasonable. It might be the last thing they remember about your company, and it isn't uncommon to see complaint threads on the Web Hosting Talk forum about how clients felt about the final treatment from past hosts.
- Whatever your policy, consider making exceptions for long-time clients with a history of paying on time but can't pay on time once. Your goodwill during difficult times can help ensure continued loyalty.
See also
Web Hosting Wiki article text shared under a Creative Commons License.
