6 Tips to Keep Your Equipment Rental Business Out of Hot Water
Running a rental business can encounter risks that can range from merely dissatisfied Customers to lawsuits and more. Below are some protections that every equipment rental business should consider sooner rather than later.
Use Deposits To Protect Your Investment
Renting is a great option over buying, in part, due to the significant discount in pricing. The idea, of course, is that in exchange for a lower price that the item is returned in good shape so that i can be rented to the next client. While we always expect Customers to do the right thing, we know that some do not.
Security deposit for rent became an acceptable way to protect your business against damage or theft of items. Collecting a modest deposit can help to commit your Customer to returning items on time and in good condition to avoid a financial penalty (the amount of the deposit). Deposits should be assignable to products and vary among products (if you so choose). The Deposit amount should be added to the order total at checkout so that your business collects the full contract price (rentals fees, deposit, taxes, delivery/shipping fees, etc.).
When the item is returned on time and , ensure your business has a process to easily refund the Customer a portion of (or all of) the deposit collected.
Write Clear Rental Contracts & Liability Waivers
Nothing is more important to protecting your company than having a professionally-prepared rental agreement/liability waiver that Customers must agree to before fulfilling a rental contract. There are countless examples of lawsuits filed by renters of equipment resulting from Customer negligence to force majeure (acts of God, etc). Having an organized and clearly-written rental agreement can not only prevent frivolous lawsuits, but it can also provide detailed information to the customer in terms of what to expect from rental start to finish.
Common sections of a rental agreement contract include recitals (name of the parties in the contract, rental company name, address, etc.), services included in the context of the rental, privacy policies, how late/damage fees are calculated and more. The more detail provided in this agreement provides greater odds of success in the event of a Customer complaint.
Whether offering rental booking in-store, over-the-phone or online, your business must have a method of not only keeping the rental agreement up-to-date, but also a process to ensure that every customer agrees to your rental contract.
RentMy allows you to add and edit your rental contract to your account, which must be accepted before a rental order can be placed. In the image below, you can see that the “Place Order” button is inactive until the Customer agrees to your business’s rental terms and conditions.
Collect & Retain Signed Rental Agreements
There is no better proof that your customer agreed to all of your rental terms and conditions than having a hard copy of a signed agreement. Even if your process includes collecting a Customer signature on the agreement, unless you have a reliable (and searchable) filing system, finding a hardcopy of the signed agreement can add unnecessary anxiety in an already-stressful situation.
Ensure that your business’s records retention policy meets the requirements of your operating territory and satisfies the guidance of your business insurance policy.
Many rental businesses prefer to store order records, signed waivers and more in a digital file cabinet. Retaining digital copies of orders not only saves a tremendous amount of office space, but also provides your business with instant access to records regardless of how long ago the rental was booked.
Stop Chasing Late & Damage Fees
One of the (many) unique things about operating an equipment rental business is dealing with late fees and/or fees related to damages that may have occurred during the course of the rental. Unless you have a method for collecting fees (even after the Customer is long gone or unwilling to provide payment information for those fees), you may lose money on a rental (or worse, may require you to replace the item.)
Ensure you have a process in place to store or “vault” Customer credit cards so that you can apply additional fees to the card used initially for the order. Select a provider who offers credit card vaulting (for in-store, phone and/or online orders in a secure, encrypted environment).
End Forgotten Rentals (And Late Returns)
Whether Customers book hours or months in advance, it never seems to fail that a percentage of them will either forget that they have a rental starting (or ending) soon. Forgotten rentals can result in an “opportunity” cost for your rental business (if you held out an item for a rental that is later canceled at the last minute because your Customer forgot, you’ve lost a potential rental to someone with a better memory).
Ensure you have a process in place to remind customers both before a rental begins and again before the rental ends . These reminders are just the basics to help keep your business operating smoothly.
Want to take your operation to the next level? Automate reminders and save your staff wasted time on the phone calling Customers. A (very) few software programs allow you to create custom alerts, reminders and other triggers (like a change in order status) to prevent the dreaded phone calls of “Where’s my delivery” and “Can you confirm my order?”.
The best businesses keep their customers informed at every step in the order/fulfillment process. With RentMy.co, you can add numerous triggers to provide meaningful, personalized alerts & reminders to your Customer through their experience with your company.
Wrapping It Up
What separates a “good” business from one that Customers rave about is generally not the “big” stuff, but rather the “small” stuff. Creating a great Customer experiences while also paying attention to the essentials to protect your rental business from the potential for lost revenue (or worse) can make your business one of the greats. There’s no time like to today to work toward greatness.