Administrators and Staff Users can request customers to return rented out Items. However, if the customers fail to return your equipment back to you on time, or worse it is lost or stolen, it impacts your ability to deliver on your promises to other customers. Eventually, it harms your business. Not all products are easily replaceable, or it is not possible to purchase additional products to fulfill orders due to late returns.
All rental businesses rely on their customers to return their products on time so that they can ensure other customers will have their rental product when the order date arrives. For this reason, we offer EZRentOut users to charge late fees to their customers for assets and asset stock that are not returned on time.
In EZRentOut, a late fee is a charge that a customer pays for items that he/she has not returned after the due date. Late fees encourage consumers to return items on time. The fees may vary. You can either set a flat rate or choose to apply late fees per minute, hour, daily, weekly, and monthly.
Below we have detailed the process about how you can set up and charge late fees to your customers!
Adding late fee charges to an Asset or Asset Stock
1. To start, go to Settings → Add Ons → Late Fee → Click ‘Enabled’, and hit ‘Update’ at the bottom.
Please note that you can add late fee rate to both assets and asset stock in your account.
2. Once the feature has been enabled, go to an Item’s Detail Page. Say, you’re adding late fee charges to a previous item added in the system, e.g. Dell Inspiron Laptop n4050. To do that, click ‘Edit’.
3. Scroll down to the Late Fee field and enter the amount a customer will be charged if this item is not returned on time. You can either set up a flat rate to charge your customers or on the basis of per minute, hourly, daily, weekly, or monthly – whichever suits your business model. See image below:
Note: You can add a late fee amount to an item while adding a new one or editing a previously added item.
Late Fee in Order Details Page
If a customer returns your rental items late or does not return them at all, a late fee can be charged. This late fee is in addition to the rental fee for the items. The late fee is payable for each item in an order that is not returned and has late fee defined. If late fee setting is enabled, the order is rented out and the expected return date has passed then this is what you will see:
By default, a late fee is not editable in the order line items table the way you can edit rental prices. However, EZRentOut enables an admin and a staff user to edit the late fee on an Order Details page if the setting is enabled. To enable it, go to Settings → Add Ons → Late Fee → Select the setting to enable an Admin/Staff user or both to edit the calculated late fee.
On enabling it, add a column for ‘Late fee’ by clicking on the pen icon shown on the Order Line Items table. Once done, the admin or staff user can edit the late fee by clicking the value.
Another way to do it is to edit the late fee from an item’s detail page.
Additionally, you can remove late fee charges on an order if you don’t want to charge them to a customer. The option to apply them is also available on the order line items table.
You’ll see a summed up amount of late fee charges for all items (with late fee rates defined) in the pricing row under the ‘Items Sub-total’. These charges are added to the total ‘Payable Amount’ in the Order Line Items table (see image above) to be paid by the customer when items are returned.
Late fee rates added to assets/asset stock is applied on all overdue orders (rented out) having those items. For new orders, these rates will be applied automatically. However, late fee charges will have to be manually applied on old overdue orders. Simply do so by editing the late fee field as shown above.
Things to know!
Partially Returned Item(s) in an Order: If an order e.g. Order #113 has been partially returned – say, 2 out of 4 items have been returned by the customer. Now, in this case, late fee charges will be applied on Order #113 for the remaining items (ones with late fee rates defined) if not returned on time.
Rental Price on Overdue Items Vs Late fee on Overdue Items: Say, you have set a rental price of $5 per day on Item #65 and a late fee of $2 per day. In a scenario where this item is rented out on 1st June and expected return date is 3rd June. Now, if the item is not returned within expected return date, the rental price won’t apply on this item after 3rd June. In fact, late fee charge of $2 per day will now apply until the item is returned. Please note this happens only if late fee feature is enabled and the order items have late fee charges configured.
Billing Vs. Return Date: If a user updates the expected return date from order details page then the late fee will be calculated from that date to the date the item is being returned. Even in case of separate billing and rental rates, calculation of late fee is based on the rental dates.
Learn more: Here’s how rental durations work with calculations
Expected Vs. Actual Return Date: There’s an option to edit the ‘Expected Return Date’ in an Order’s detail page, however, the same cannot be done on the ‘Return Order’ form. If items are not returned within the Expected Return Date, the field turns red and late fee kicks in. The late fee is automatically updated whenever a minute, day, week or month passes, depending on which variable you’ve selected to charge the fee on.
Now when you return an order, a form pops up. You are not allowed to edit the expected return date here (you can do that in the Order details page), but you can edit the ‘Return Date’. Based on the ‘Return Date’ on this form, your late fee charges will be calculated. The late fee charges will be applied for a period between the Expected Return Date and Return Date. See image below:
Real-time calculation of Late Fee: You can always get an estimate on late fee charges because the Late Fee line item row is automatically updated whenever the number changes in the Order Line Items table.
Late fee on Recurring Orders
If recurrence is enabled on an order, a late fee is charged on items in last recurring order if the items are not returned within due time. Please note that for the last recurring order, the amount will have to be manually charged when the order is being returned.
Late fee on Bundles
Say, late fee rate for HP Probook is $0.05 and $0.10 for Nikon Camera. Now, associate these two items with a bundle and add this bundle to an order. If not returned on time, the system will charge your customer a cumulative $0.15 (sum of late fee rates $0.05 and $0.10 for both items). Customer will have to pay $0.15 if the bundle is not returned on time.
Learn more: Bundle items together to rent out in EZRentOut
View Late Fee Charges on Customer Portal and Webstore
If the setting is enabled from Settings → Add Ons, you’ll be able to customize your webstore view from the Store Settings → Webstore View → Select the information you want to show on different pages → Add Late Fee to relevant sections e.g. Item Details Page. See image below:
A customer is able to view late fee charges on an order details page via customer portal and webstore as well (see image below).
On the customer portal only, a customer will also be able to see real-time or reculated late fee value every time the value changes.
Customize ‘Late Fee’ Column View on Order Line Items Table and Listing Pages
On the Order Line Items Table, the late fee is shown in the pricing row and is summed up in the total payable amount section. To view late fee for individual items, you can customize the table’s view from the pen icon as highlighted above.
You can do the same for listing pages. You can customize the items’ listing pages from the pen icon and show ‘late fee rate’ column for each item separately.
An email alert for ‘All Overdue Orders’ is generated when a rented out order is not returned by the customer in due date. But with a late fee set up on an item, an admin will receive this email alert with additional information i.e. details on the late fee charges. You can enable this alert from Alerts → All Overdue Alerts. See the image below:
Learn more: How to customize email templates in EZRentOut
It always is a good practice to mention your late fee policy in your initial agreements. This minimizes any conflict that may occur later. Another technique is to make sure that late fees are listed on all of your invoices. A simple line in the footer that says “A $5 late fee will be applied to all invoices if items are not returned within expected due date” can be a very specific notice. Something a little simpler may also be sufficient and may say “Late fees may be applied for items not returned on time”.
You can customize your order printouts (agreements, invoices, receipts, etc) accordingly in EZRentOut. Go to More → Printout Templates → Select ‘Order’ tab. From the tab, you can either create a new printout template or clone and edit an existing one.
Add ‘Late Fee’ element within a section: If you’re customizing an order printout, say an invoice template for future orders. You can add ‘Late Fee’ or ‘Late Fee Rate’ as an element in the Order Line Item section in the invoice printout. This will enable you to highlight late fee or late fee rate for each item individually in the order.
Format ‘Late Fee’ in the Pricing Row: When customizing an order printout, you can format the ‘Late Fee’ row as per your requirement. To do this, select ‘Click for more options’ under the ‘Pricing rows detailing…’. See image below:
You can also add ‘Late Fee’ as an element in the ‘Details after line items’ section. Click ‘+Add’ to do that.
Learn more: Here’s how you can customize your Order Printouts in EZRentOut | Sending Emails to Customers via EZRentOut
You can also get into more insights that involve late fee details from Reports → Order Reports → Order Line Items and Reports → Custom Report → Select a Module i.e. Asset/Asset Stock → Choose ‘late fee’ column to display. These reports can be filtered. You can export these reports to CSV format or upload them to your Dropbox account.
Sync Late Fee Data with Accounting Software
You can sync late fee data with all accounting software integrated with EZRentOut i.e. QuickBooks Online, QuickBooks Desktop, and Xero. This will enable you to keep track of all late fee charged on items not returned in time by the customers.
Once the sync takes place, this is what happens! A separate line item for late fee charged on an asset/asset stock not returned is created for every order each time. Say, there are 3 assets in an order so 3 late fee line items will be created separately.
Charge Late Fee for Items not returned on time using EZRentOut!
No business WANTS to get behind on orders. And no business WANTS to have to charge late fees. But if the event of returning items occurs more than usual, then automate the process of charging a late fee to customers using a software. EZRentOut is an online rental software that helps thousands of businesses manage rental orders, track equipment, improve customer satisfaction, and streamline processes all over the world.
You can try out our equipment rental software by signing up today for a free 15-day trial. For more assistance, drop us an email at firstname.lastname@example.org.