When do you charge your cut-off fee?
I’ve written about when to charge the cut-off fee in a previous article about cut-off policies, and even devoted a full article to the topic. However, it’s been four years since the last article and I think this is a topic that merits revisiting.
Recently, I’ve done sales presentations for a few utilities that still charge the cut-off fee only to accounts that have been cut off, rather than charging it to every account on the cut-off list when the list leaves the office.
Fee Survey results
In the 2015 Utility Fee Survey, 71.9% of the utilities that cut off for non-payment charge the cut-fee as soon as the cut-off list leaves the office. I’m pleased to note this was an increase of 10% from 61.9% of the utilities responding to the 2012 Utility Fee Survey.
But this still means that nearly 30% of utilities aren’t charging the cut-off fee to everyone on the cut-off list when it leaves the office. My goal is for 100% of utilities to adopt this policy!
Let’s look at some of the reasons why I believe so strongly in charging the cut-off fee to all accounts at the same time…
It’s more equitable
Customers on the cut-off list have avoided every opportunity to pay their bill. Most utilities process the cut-off list in the same order each cut-off period. Once the first customers start getting cut off, the underground network that seems to exist in every utility’s service area kicks in and customers start showing up to pay.
Is it really fair to extend some customers a few more hours because they are toward the bottom of the cut-off list?
Charging the cut-off fee to all customers at the same time also removes the field service technician from the uncomfortable position of a customer pleading for time to get to the office before being disconnected.
Avoids confusion in the office
If every account has already been assessed the cut-off fee, there is no need to radio or call the field technician each time a customer on the cut-off list comes in to pay. This eliminates confusion in the office and allows the field service technicians to be more productive.
More efficient process
Administratively, it’s much easier to apply the cut-off fee to every account automatically rather than manually adding it to each account as they come in to pay.
Also, if you offer on-line bill pay, there is no way for the on-line bill pay website, unlike a cashier when paying in person, to know if the customer has been cut off or not. To solve this, some utilities don’t allow customers on the cut-off list to pay online. How inefficient is that?
Finally, by assessing the cut-off fee to every account, your utility will generate more revenue from cut-off fees. What utility wouldn’t want that?
Could your cut-off process be more efficient?
If your office is still charging the cut-off fee to only those accounts who are actually cut off, or if you think your cut-off process could be more efficient in general, please give me a call at 919-232-2320 or e-mail me at firstname.lastname@example.org to learn how a business review could help your utility.