To Do or Not To Do?

DEAR WALDMANS: My question concerns giving prorated refunds if a customer leavesin the middle of the month or any other time before the first of the month. My managersays it's good customer relations to refund the balance of the month along with theirrefundable deposit of $20. I say, if you let them know up front (for example, that we onlyprorate if they are out before the 15th), they will accept this as part of the rules to beabided by in the lease. What are your opinions on this matter?

--To Do or Not To Do in Calaveras, Calif.

DEAR TO DO OR NOT TO DO: Your question is a good one. Prorating is a practicethat is often misconstrued in the business world, being coupled with the belief that it'sgood for the customers because it will make them come back again, they will remember ourfacility forever, etc. The truth is, however, sometimes people are very loyal and rememberthat you saved them some money or time, but when you have a business and you have a lease,then consistency is always the best way to go.

The logic is: You set the rules and you follow the rules. This kind of thinking makesit easier for everyone. What if Mr. Doe returned to your facility two years later? Hetells the new employee (let's pretend that you have been replaced), "Whoa! Wait aminute. You can't charge me that price--I want more of a refund. Ms. Mary, a formeremployee, always let me pay for only 15 days." You, as the new employee on the block,would feel a little nervous about this situation. Maybe your manager isn't feeling soliberal with the money lately. Maybe the facility had a couple of really bad months. Thisplaces you in a difficult situation and makes it hard because the rules have been changed.

We agree wholeheartedly with your belief. Apply the rules in the lease up front,explain the refund rules and your prorate policy. Remember, even if the customercompletely misunderstands and he did sign the lease and rent the unit, then he must abideby the lease. This kind of business operation will make it simple and easy, not only forthe employee, but for the tenant as well. Everyone knows from the beginning what isexpected of them. Whether you use a prorate date or anniversary date, there are nosurprises and no misunderstandings.

In our state, we are required to use a prorate date, but states differ. Many give youthe choice of either a prorate or anniversary date. We have to go by the first day of themonth, known as the prorate date. We are overwhelmed with payments the first of eachmonth. If we had a choice, we would prefer to use the anniversary date, which keeps thebusiness more staggered, allowing more freedom to keep things running on a constant basisthroughout the month. Using the prorate date is a lot more tedious. Whatever option youuse, stick to the rules. Many self-storage facilities completely ignore the codes that areset by their state's regulations. This is great until they get caught for not followingthe rules--and lawsuits are no fun.

Finally, approach your manager about consistency. But be careful--he still is the boss.He sets forth the rules. If you choose to try and change his mind, we wish you luck inenrolling him in your way of thinking.