Thriving Childcare

This Is When A Provider Should Absolutely Charge Childcare Fees

childcare fees

Ever notice how businesses charge extra for things? You know. Like if you need a package to be delivered sooner than the standard delivery. There is usually an extra fee for that. Or if you exceed your limit. Like for banking or a credit card. Or even an extra channel on your cable service. You usually can expect to pay more. Well, the same is true in our childcare businesses. More is more. So today I’m addressing when it might be appropriate, no maybe even suggested that you charge extra childcare fees.

Fair warning, since I know that the notion of charging childcare fees can be such a scary thing, this post is a deep dive. So grab a tea or latte and let’s get into it.

When A Provider Should Absolutely Charge Additional Childcare Fees

Fear of fees

Right off the bat, I know what you’re thinking – “If I charge extra childcare fees, my clients will revolt and leave.” Tell the truth. You were thinking that right?

It’s ok, probably most providers think that. At first.

But the thing is childcare fees don’t always have to be a bad thing. And we will get into that in a minute.

In fact, extra fees, for the most part, are standard business practice. As I said above, many different types of businesses charge for things like additional services or exceeding contracts and plans.

Why shouldn’t you?

Fees can be a good thing

Now before we jump into specific fees, let’s explore what fees are really all about.

As I discussed above, in general, fees are accessed for extra services. Things that aren’t included in basic contracts or plans.

childcare fees
Time to put more money in!

And yes, fees can also be used to deter behaviors or practices like exceeding your credit card limit or having an expired parking meter.

But something that can be missed is that fees can also provide opportunities as well. Like when you really do need to get that package to your aunt for her birthday. You would probably gladly pay an extra fee to make sure she gets it on time.

Fees are not always a bad thing. And even if they are used as a deterrent, the practice of applying an extra fee can be a sound and effective way of getting clients to follow your policies

Here are some incidences where an additional childcare fee would be appropriate if not suggested.

1. Late Pickup or Early Drop-off

I know for many providers, something like an early drop-off or late pickup might not be an issue. They may not see it as a bother. After all, they are probably caring for other children who come early or stay late as well.

childcare fees
More time is more time!

But hang on!

Kinda a big deal!

Consider the fact that most providers are licensed for specific days and hours. In that case, random drop-offs and pickups could cause the provider to be outside of her legal hours of operation. And that’s kinda a big deal!

Not only that, not knowing which children will be in attendance or when could cause a ratio issue. Another potential violation.

Finally, if parents have a habit of dropping off or picking up outside of what they agreed to, they are essentially breaking their contract with the provider.

What’s the fee?

Consider tacking on fees to deter this behavior. Many daycare centers assess a per-minute fee for drop-off and pickups outside of contracted hours.

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2. Late tuition payment

If you have a certain day when you expect tuition payments and parents are not adhering to that, there should be a fee for that.

I have talked before about how when I started my business parents had a habit of paying me late just about every week. I was constantly running back and forth to the bank.

Most of the time, this caused more issues than just annoyance.

I can remember incurring NSF fees and excessive transaction fees not to mention the extra time and gas it cost me.

No more! I had enough!

I set a specific day (and time) when tuition payments had to be submitted or there was a fee added. Just in case you are wondering, my fee is an additional $10 for each day the tuition was delinquent.

Because I had already had the experience of receiving payments late, I had no problem with putting this into practice. And you know what, not one client had anything to say about it.

What could they say?

What’s the fee?

A per-day tuition delinquency fee is standard for many businesses. Set a day and time and stick to it.

3. Bounced checks

Ok, this is probably a no-brainer. But if you ever have a client whose check bounces at the very minimum the client should be charged whatever bank fees are associated with the NSF.

Again, this is pretty standard as with any business.

Additionally, I know many providers who will place a limit on how many occurrences they will allow for returned checks. After which, they will only accept cash payments. Another good practice.

What’s the fee?

Clone a returned check fee from other businesses you deal with. At a minimum, pledge to reverse the bank fees associated with any bounced checks.

4. Extended hours

This one might be a little controversial, but it is something that I found the need to put into practice at my business.

You see I was finding that although parents agreed to certain contract hours of care, instead they would routinely extend those hours. Which was extending my workday.

After work, parents have told me that they have gone home, cooked dinner, taken a shower, or gone shopping. All before picking their child up on time. And since they technically picked up during my business hours (barely), they found no problem with it.

Oh really!

So I adopted a 9-Hour cap on basic childcare services. This means that parents are required to pick up their child 9 hours after their scheduled, contracted drop-off time. Yeah, I had to put in “scheduled, contracted” in my contract because I had some parents who thought that meant they could change the time from day to day.

If they do not pick up on time, they can expect a late pick-up fee (see above).

All that being said, this is one of those opportune fee situations. Because if at enrollment a parent indicates that they will need childcare hours that extend beyond 9 hours, I can make a decision to approve an extended day contract option with that client. Or not.

What’s the fee?

This fee is different than the Late Pick-up or Early Drop-off fee. Instead, this fee refers to an agreed-to option to extend the hours of childcare for a client.

For this, I usually simply quote a different tuition amount instead of a per-day fee. Also, I make sure to make it clear in the contract what days and hours this includes.

Related Reading:

5. To hold a spot

Oftentimes providers will have parents who contact them about holding an enrollment spot for some time in the future. Sometimes they are expectant parents and other times they are relocating to the area.

Years ago, I would hold these spots without requiring a deposit or fee. But oftentimes I would get burned in the end when the parent would not enroll.

I was left with an open spot when I might have filled it if I hadn’t held it open.

Eventually, I created my Pre-enrollment Program which several parents have taken advantage of over the years.

The basic principle here is that many times people will walk away if they have no skin in the game. It is, therefore, a good practice to require some sort of deposit or fee to hold an enrollment spot.

Since this fee is usually less than the regular tuition amount, it is also a good idea to set a maximum time limit a spot will be held.

What’s the fee?

This can be completely customized to your business. You may decide to charge a percentage of the total regular tuition amount. Or you could have a set amount for each week or month you hold a spot.

Either way, if you do decide to hold spots for a fee I would suggest you make that fee nonrefundable. And a dollar amount that makes walking away less likely.

Related Reading:

Additional Fees Worth a Look

We have looked at 5 childcare fees, however just as every business is different, you might have the need to add more, less, or different childcare fees.

Here are a few other fees you might want to consider:

  • Insurance – Liability insurance (full or partial)
  • Supplies – Basic needs, art & projects, etc.
  • Transportation – Pickup or drop-off
  • Damaged items – Excessive or value of an item

Don’t Nickel & Dime

Before I go, I do have one more thing to say about fees. Although I think it is quite appropriate to charge additional fees for additional services, do be careful.

I don’t mean be careful in a bad way like fear of turning off your clients.

What I mean is to be deliberate with your fee structure. Have a deliberate intent for why you charge the fee and what the fee is to accomplish or compensate for.

Also, take care not to be fee happy and not to nickel and dime your clients. Disclose your childcare fee structure in advance and notify clients of any changes to those fees.

Related Reading:

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3 Responses

  1. I am so grateful for you covering how to handle holding a spot. I have been burnt giving individuals the benefit of doubt that they would use my services. As a result, I have been delaying the start of my business. But now, I feel more confident in requiring a non-refundable deposit to hold an enrollment spot. Thank you so much for your cander!! It’s people like you that strengthen and encourage me. I will help others as you have helped me. Blessings.

    Cynthia Mobis,
    Harrisburg, PA

    1. Thanks, Cynthia! I know that it can be a touchy subject and one that can be a little tricky to handle. But sometimes all we have to do is to look at other business models to figure out what’s an appropriate way to handle something for our business. I think as providers we have a “Fear of Fees”. Fear of turning off our clients and them revolting. But most other businesses charge fees routinely so if it’s appropriate we should as well. Thank you so much for your comment!

  2. Great article!!!
    I charge a yearly insurance fee ( instead of a registration fee). It’s due each September.

    I also charge a $20 month crafts fee which helps
    Off-set the cost of supplies for arts, science experiments, a cooking project, etc.

    I am just about to offer an after care option of $20 weekly ( used or not) for those that tend to arrive late. It’s optinal but it may save them the $1 per minute rates. We’ll see how this takes shape.

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Adrienne Bradley Thriving Childcare

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