Cancelation fees?

Discussion in 'Business Operations' started by ponyboy, Mar 21, 2008.

  1. ponyboy

    ponyboy LawnSite Bronze Member
    from ny
    Messages: 1,585

    Phone companies,gyms and others charge the customers cancelation fees why shouldn't we. Monday I had two different people call and say they no longer want my services after sending back their signed contract am I wrong for charging them a fee to stop service? 1 month service, i have already turnrd away othres because we were booked on that day now i have an open spot. Thoughts
  2. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    Yes and no, I probably would skip it unless you have tons of work because of the economy but whichever you decide you have to let them know in advance, in that very contract they signed there needs to be a short paragraph to the effect.

    Read: Enforcing or enacting such a clause can and will hurt future business.
    But yes I understand this predicament well, that is, from your side of the fence.
  3. ffemt1271

    ffemt1271 LawnSite Bronze Member
    Messages: 1,285

    my contracts have a 30 day notice, either i get to con=mplete toe 30 days or they can buy my 30 days out, either way i get 30 days worth of $
  4. CrimsonLawnCare

    CrimsonLawnCare LawnSite Member
    Messages: 95

    we added early cancellations fees to our contracts this year, last year we gave them a deal if they signed up for a year.. we had a couple call back like one month in and canceled.. after they had already got the free mow :( so this year we added a early termination fee and all discounts are taken off at the end of the season :) we also have the thirty day written notice as well
  5. georgiagrass

    georgiagrass LawnSite Senior Member
    Messages: 970

    We include the following language in our regular agreements (There is different language in our annual flat monthly rate agreements): "We require a 30-day advance written notification for cancellation of service. Service and billing will continue during this notice period."

    We don't always enforce the provision, depending on what the circumstances of the cancellation are and our relationship with the customer.
  6. grass-scapes

    grass-scapes LawnSite Bronze Member
    Messages: 1,552

    I have a 90 day period of payment OR the normal charge for services completed to the point of cancellation, whichever is GREATER.

    Too many people sign up in April, get a 12 month payment plan (lower payments because they are spread out longer), and then try to cancel in December. The above statement stops that.

    It sounds like a lot, but why give someone an opportunity to screw you over.
  7. quipit

    quipit LawnSite Member
    Messages: 29

    If the client is filing for bankruptcy, moves, dies or just isn't satisfied with your services and they don't tell you this when they terminate service and you keep servicing them for another 30-90 days as per clause/contract....ouch. I would just charge them the cancellation fee, but I doubt that you will have any luck collecting it from these examples.
  8. nlminc

    nlminc LawnSite Bronze Member
    from GA
    Messages: 1,671

    On 12 month payment contracts I have everything built into the contract the explaination of money owed when the customer or myself cancels the contract. There's a 30 day, but one of us may owe the other money depending upon what month the cancelation falls in the contract.

    It's all spelled out on a spead sheet showing what they pay for each month in relation to what they're payment is broken down to over a 12 month period to make it easier for them to same payment/12 months.

    The ones who don't like the details of the contract are usually the ones who want to use you during the busy season and then drop you. I like contracts but again, I can make more from someone who pays by the month sometimes for services provided that month. In my area contracts are popular so I offer them.

    I had a customer tell me the "she supports me" thru the winter by paying me during those months! When I explained that I was supporting her by finacing 8months worth of work over a 12 month period to help "support" her and keep her payment down........she came back down to reality. That was when I knew I needed to rework my then simple contract that I used for years. With the economy making people tight with $$ have to watch you back. Bottom line you always do.
  9. grass-scapes

    grass-scapes LawnSite Bronze Member
    Messages: 1,552

    of course you will always find exceptions to everything. I have been stuck. I have a customer in forcloseure. They were 2 months due (winter time so stopping service wasn't an option)and I called. They explained their situation and sent me a check for one month. of course, it bounced. They owe for 4 months to finish out the contract. I likely won't see any of that money, but as a business, you put yourself at risk all the time. I also have another former client who I did work for WITHOUT a contract. Mowed about a month and a half and did some bedding work. She kept avoiding me. I stopped service and have been trying to collect for over a year. collection agencies, letters, etc. Got a letter yesterday that they filed for bankruptcy and I MIGHT get 32% of what they owe me but other creditors come first because I had no contract with them.

    NOTHING will prevent you from getting ripped off sometimes. You just have to grin and bear it.

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