Package Management Fees… or Free?

Implementing fees for onsite amenities is on the rise. While there are some regulations around the what and how of resident fees, more properties are utilizing various fee structures to off-set operational expenses.

Here are a few ways of utilizing fees for resident package management.

‍

Types of fees for resident package management

There are several different ways to encourage residents to effectively leverage the system you have in place and pick up packages in a timely manner to keep the system running smoothly.

‍

Sign up/Registration Fees

This is generally a one-time fee that is collected as soon as the resident enters their credit card and authorizes the charging of the fee. 

‍

Note: Some vendors will automatically charge (and keep!) these fees for all new residents to off-set service fees. Be sure to check your contract language so you know what to expect. 

‍

Ongoing/Subscription Fees

This has recently become more popular. Properties charge residents a monthly fee (either as a separate package management charge or added to an existing amenity fee). Oftentimes this is designed specifically to off-set service fees charged by the vendor and is sometimes treated as a cash-flow opportunity. (Vendor charges $15/mo per unit in service fees, property charges $17/mo per unit in service fees).

‍

Activity-Related Fees

There are a variety of options for activity-related fees. Generally, these will also require a credit card on file. Here are a few common fee structures:

• Per delivery charge - A charge per package delivery. Sometimes a threshold is set and fees are charged after a set number of packages have been delivered to the system.

• Storage/daily fees - This is the most popular as it keeps packages flowing vs locking up space for incoming packages. It’s common to see a small $5-$15 fee for packages not picked up within 3 days.

• $ outbound shipping - Generally charged per package for any outbound returns.

‍

Collecting fees

There are two common ways fees can be collected:

Collected by the vendor

Generally, if the vendor charges the residents and collects the fees, the amount collected is split with the property (split varies by vendor), and a monthly commission check or credit is sent to the property for their share.

Collected by the property directly

This is fairly straightforward for Sign Up/Registration Fees and for Ongoing Fees. To collect for Activity-Related Fees, the vendor will need to have an integration available or the property will need to have access to pull reports from the vendor’s system.

‍

Important considerations 

Be sure to understand your options and consider them carefully when looking at a fee structure. Reach out to your vendor for assistance in understanding the options they provide.

• Consider fees at the time of implementation. Adding fees to an existing amenity can be quite challenging and generally met with quite a bit of resistance from residents.

• Many fees will require the resident to enter a credit card into the vendor's system. Requiring a credit card on file can create a barrier to residents using the system you have purchased. Some residents are resistant to the possibility of having additional charges for an amenity they feel they are already paying for.

• Property management may have to field more resident inquiries and complaints about the system (than if they didn’t charge additional fees), especially if they are charged through the vendor system or as a separate line item on their monthly rent.

• Be certain to familiarize yourself with any and all regulations related to resident fees & notifications.

‍

For More

• A new option for an overflowing package system.

• Are you looking at the right-sized system? Everything you need to know capacity of a package management system.

‍