When it comes to accepting credit card payments, there are two options regarding the fees associated with processing credit card payments. One is to absorb the fees as a cost of doing business and the other is to charge a convenience fee for credit card payments.
In the first case, your utility simply absorbs the cost and your customer only pays the full amount of the bill. In the second case, your customer pays a convenience fee, over and above the amount of the bill, and your utility pays the credit card fees from the convenience fee collected.
Some credit cards, such as reward cards and business cards, incur larger fees than others. Many utilities don’t want to incur the cost of credit card fees and they feel uncertain about charging a convenience fee, not knowing if the convenience fee will cover all the costs associated with accepting credit cards.
Third party convenience fees
A third option is third party convenience fees. If a third party provides your online bill pay or IVR service, such as Logics does with Logics WebPay and Logics PhonePay, the third party processor can charge the fee and your utility still receives the entire about amount of your customer’s bill. In this case, it is up to the third party to pay the associated fees from the amount they charge.
Additionally, convenience fees are not allowed by law in some states. If your utility is located in one of these states and you want to avoid the costs associated with taking credit card payments, third party convenience fees are the solution for you.
In office payments
Obviously, third party convenience fees can’t work for in-office payments because no third party is involved.
But, is there a way to charge a convenience fee for in-office payments?
One solution employed by some utilities is to install a payment kiosk in the lobby and direct customers who wish to pay by credit card to the kiosk. This need not be an expensive kiosk – it can be as simple as a retired desktop computer or a tablet device mounted in a frame so it can’t be stolen. The kiosk is configured to access only your online bill pay site and customers use this to pay by credit card in your office.
A side benefit of your customers using a kiosk in your office is they become familiar with your online bill pay site and may make future credit card payments from home.
Are you considering taking credit cards?
If your utility is considering accepting credit cards and you need assistance determining how best to go about it, please give me a call at 919-232-2320, or email me at firstname.lastname@example.org for more information about how a business review could help.
© 2017 Gary Sanders
Happy New Year!
Let me start by wishing you and yours a Happy New Year for 2017! 2017 marks the 6th anniversary of the Utility Information Pipeline and I look forward to another year of offering insights into how your utility can operate more efficiently and better serve your customers. As always, if you have suggestions or ideas of a topic for me to cover, please email me!
The last Utility Information Pipeline included the results from a poll asking if reader’s utilities have a formal customer service policy. It went on to explain why I believe having one is important. I promised this issue would address what should be included in a customer service policy.
Elements of a formal customer service policy
Let’s take a look at some key items that should be included in a customer service policy…
Application for service
For starters, your customer service policy should include what is required of a customer applying for service. What forms of ID do they need to provide? Are they required to pay a security deposit or an application fee?
If you do require a security deposit for new customers, the amount of the deposit should be plainly stated in your customer service policy, as should any nuances in how the security deposit is determined.
Do you charge a different deposit for renters than homeowners? Do you perform a credit check to determine the amount of the customer’s deposit? Do you retain the deposit until the customer leaves or do you refund it for good credit customers? All of these should be clearly defined in your customer service policy.
Rates and fees
Your rates and fees should also be set forth in your customer service policy. In addition to rates for the services you provide, your customer service policy should also include any fees, such as returned check fees or any other fees you charge.
And, of course, be sure to update your customer service policy each time your rates and fees change.
Due dates and disconnection for non-payment
The section most often referred to in many customer service policies is the one dealing with late payments and disconnection for non-payment. Be sure your policy clearly states how the due date is determined and how much the late fee will be if not paid on time.
If your utility cuts off for non-payment, your policy should also accurately describe when an account is subject to disconnection and how the cut-off fee is charged.
How many ways can your customers pay their bill? Do you charge a convenience fee for credit card payments? Can your customers pay their bill online? What must your customers do to sign up for bank drafts? All of these questions should be answered by your customer service policy.
Does your utility offer budget billing? If you do, your customer service policy should explain the details of how the monthly payment is calculated and the requirements for customers to sign up for budget billing.
Your customer service policy should outline what options are available to customers who believe their bill was incorrectly calculated. It should also describe the details if you offer leak adjustments or summer sewer adjustments.
Do you have a formal customer service policy?
If your office needs assistance developing or updating your customer service policy, please give me a call at 919-232-2320, or email me at email@example.com for more information about how a business review could help.
© 2017 Gary Sanders