AppFolio Launches $2.49 Transaction Fee For eChecks
Effective July 31, 2023 leading property management software AppFolio began charging a transaction free of $2.49 for all payments made via electronic check (eCheck). The fee applies to tenants paying rent at multifamily properties and owners paying HOA dues. Property and community managers who do not want to pass on fees to residents can pay a reduced rate of $1.00 per transaction. In either scenario, these new fees are going to create major headaches for property and community managers.
Unfortunately, there is not much property and community managers can do in this situation. Most lack the authority to accept the $1 cost directly or change to a new software. As a result, property and community should be prepared to handle an onslaught of complaints about AppFolio’s newest transaction fee.
Potential AppFolio Transaction Fee Complaints
Some percentage of residents and owners accustomed to paying no fees are going to be angered and upset about Appfolio’s new transaction fees. While it is only $2.49 per month, people simply hate processing and transaction fees no matter how big or small. According to WealthGang, 47.5% of people say avoiding unnecessary fees is extremely important to them. Housing was also ranked 3rd on a list of industries where American’s hate paying fees.
Additionally, many people initially setup eCheck payments for their rent or HOA dues to avoid paying AppFolio’s credit and debit card processing fees. Property and community managers are likely going to face a rash of complaints over the new eCheck fees. Here are a few complaints and questions property managers can anticipate:
- Why are we being forced to pay this fee?
- Can I pay another way to avoid these fees?
- Where is this transaction fee going?
- Who is responsible for this new transaction fee?
Unfortunately, it is almost guaranteed property managers will receive complaints about the new fees. Even if complaints are limited, residents are going to ask questions. As a result, property and community managers should prepare for potential complaints and questions ahead of time.
5 Tips For Addressing Resident Complaints
While transaction fees might be a new issue, Property and community managers should not change their approach to dealing with complaints. Here are 5 tips for addressing complaints, whether they are about transaction processing fees or not:
- Actively listen and acknowledge the complaint
- Remain calm, composed, and professional
- Empathize and provide an authentic apology
- Restate the complaint to demonstrate a clear understanding
- Be transparent about the options to resolve the issue
In this scenario, most property and community managers who will address complaints have limited options. It is extremely unlikely property and community management companies using AppFolio across their portfolio will move away from the software. It is also unlikely they can decide if their property will incur the $1 cost per transaction. As a result, there are no immediate solutions beside paying using a physical check. This is also an issue at properties and communities that only accept electronic payments. This is why it is important property and a community have a process to handle complaints.
Why Did AppFolio Add eCheck Transaction Fees?
There is always a cost associated with processing an electronic payment. This is true for all credit card, debit card, and eCheck transactions. If the resident or owner is not paying the fee, it is being covered by the recipient or processing portal. In this case, AppFolio was paying the eCheck processing costs. Rather than continue to cover these costs, AppFolio has decided to pass them along to the resident, owner, or management company.
The $2.49 cost to residents or $1 cost to management companies is notable. This is because eCheck processing fees are typically the lowest among all types of electronic payment. Many commenters on this Reddit Thread believe AppFolio is using the fee to quickly and easily increase revenue. The thread also contains a complete copy of the email notice sent to management companies last month.
The team at Property Manager Insider is looking for additional feedback and input from property managers regarding the new AppFolio processing fees. Any property managers that would like to share their feedback or have their opinion this matter are encouraged to send us an email with any real word comments, stories, or resident issues. All submissions will remain anonymous.