To Charge or Not to Charge: Understanding Late Fees for Reusables Programs

In this blog, we’ll dive into the role of late fees in reusable container programs and how they influence return rates, program success, and diner sentiment. We’ll explore different types of charges, from single-use surcharges to customizable late fees, and how Topanga’s integration capabilities make managing these fees straightforward. With real-life examples from university programs, you’ll see how charges can impact both the environment and your dining program’s bottom line.

Introduction

As an API-based product, Topanga was built with an integration-first mindset, allowing organizations to leverage our software seamlessly within their existing tech stack. When it comes to late-fee charging, this means that Topanga can set up automated charging directly through your organization's diner-card systems, mobile-ordering integrations, and/or give you all the tools and transparency you need to execute charging in-house.

What are the different types of charging in reusables programs?

Late Fees

Late fees are just like checking out a library book! When a reusable asset is scanned out, the rental window begins. Each rental consists of a due date and an expiration date. Automated return reminders are sent to users if the container isn’t returned by the due date and late fees are eligible if the container still isn’t returned by the expiration date.

Single-Use Surcharge

Single-use surcharges can be implemented in addition to or instead of late fees. By adding a surcharge to single-use packaging, it gives students the option of participating in ReusePass for free or continuing to choose single-use packaging for a fee.

The single-use surcharge has proved to be an excellent lever for encouraging widespread ReusePass adoption and making the ROI tangible to the school.

Surcharges are great if you want to have an optional reusable packaging program but the cost of single-use is still a burden on the bottom line.

How are late fees charged? Where are late fees charged to?

Late fees are configured on a per-organization basis during implementation of your ReusePass program. By default, there is a standard late fee that will be eligible for a charge once the rental has expired and a container is not returned.

There are advanced configurations available (such as $5 for a clamshell and $2 for a coffee cup) but Topanga will recommend the right choice depending on the implementation.

There are two core ways to charge late fees:

1. Automated charging

Automated charging integrates Topanga and your organization's payment-card provider, either through direct set up and/or through our mobile-ordering partnerships.

While Topanga can support seamless execution of charges, it is always up to the organization to determine where the charges land across various forms of currency, such as dining dollars, flex money, meal swipes, or student’s campus wide accounts.

Refunds are processed automatically in these scenarios as well.

2. Manual-charge processing

Some of our schools prefer to charge the students manually for increased transparency and control when it comes to executing late fees. Additionally, we’re continually growing our integrated partners, but don’t support 100% of card providers at this time.

Topanga’s platform makes it incredibly easy to track and manage manual charges through our charging workflow in the dashboard. Learn more on manual charging workflows here.

Manual charging gives schools complete control over the cadence of charging, which accounts to process a charge too, and how to manage refunds.

Topanga does not manage or process late fees directly to credit cards at this time.

Does charging late fees actually result in better return rates?

By and large, late fees are one of many levers that drive program performance. If recouping costs for unreturned containers and focusing on economic ROI is key to an organization, then late fees and single-use surcharges will be great tools to leverage.

That being said, many organizations don’t charge late fees and instead focus on positive incentives through loyalty/rewards programs and bringing ReusePass to life with ambassador engagement. Learn more about our ReusePass ambassador program here.

We’ve seen that organizations that charge late fees tend to see a 98% average return rate while those who don’t charge see a 96% average return rate. Both of these results set organizations up for long-term environmental and economic impact, regardless of which route you choose.

Is there charging flexibility for specific instances where you do not want to charge late fees?

Yes, Topanga has robust tools to ensure ultimate flexibility when it comes to when and why late fees are charged so campuses can create the best reuse experience for their diners. This includes Topanga's new features like return forgiveness and rental received forgiveness.

Forgiving a rental means that you do not intend to issue fines or penalize the diner for failing to return a container before the rental expires. We created this feature in response to feedback that we collected from several clients who expressed 1) a desire to offer more flexibility as campus life and operations vary throughout the year (e.g. beginning of a new term, holiday breaks, etc.) and 2) a desire to be more lenient with diners regarding when the returned container is received. Learn more about our new rental forgiveness feature here.

Your Topanga success team will help you decide when to leverage these product features to ensure the best-in-class program and participant sentiment.

Additionally, all schools that charge automated late fees are recommended to buy into Topanga’s live customer support tools. This allows Topanga to take on the heavy lifting and work directly with end-users to troubleshoot refund requests and ensure accurate charging.

If students have multiple overdue containers, can schools block their ReusePass program participation?

Today, this is not a feature that we support in our ReusePass programs. The reason being? By and large, we haven’t seen many bad actors in a ReusePass program!

On average, customers only have 1–2 containers out at a given time, so there’s no need to worry about bad actors who are taking advantage of the program.

That being said, we will sometimes see a skew in the data where a participant will have multiple un-returned containers checked out, but based on our data this is <1% of all ReusePass participants. In those scenarios, Topanga has targeted communication tools to connect with those users directly and intervene as is necessary, as well as provide automated reporting to schools for visibility into their users’ behaviors.

What are some examples of successful charging situations in ReusePass programs?

Below are a wide variety of successful ReusePass programs, including retail, residential, optional and mandatory variations—each with their own specific charging protocols. Thanks to the flexibility of ReusePass, you can customize your charging to suit your dining program’s needs. 

McMaster University

• Optional residential program

• $1.25 single-use surcharge or reuse for free

• $5 late fee for unreturned containers at the end of the semester

• Results:

  • 99% average return rate

  • 46.5 container uses before retiring

  • <$0.07 per use, which is 70% less than the average cost of single-use containers

  • <1 day return timeline

  • 3-day cycle rate (from initial checkout to ready for next reuse)

Saint Mary’s College

• Mandatory residential program

• $5 late fee

• Results:

  • 97% average return rates

  • 11 reuses per container

  • Diner reuse 2X per week

  • <$0.30 container cost per reuse

Boston University

• Optional retail program

• $2.50 single-use surcharge or reuse for free

• $8 late fee

• Results:

  • 95% average return rate

  • 90% reach across the undergraduate population

  • 78% reduction in disposable packaging

  • Over 200k open container loops

  • 10 uses per container, making it 45% cheaper per use than single-use containers

  • 2-day return timeline

  • Extra funds that they can now reinvest into the growing program and support other operational needs

Brandeis University

• Mandatory residential program and optional retail program

• $2.50 single-use surcharge in retail or reuse for free

• $5 late fee

• Results:

  • 98% average return rate

  • 24 average uses per asset

  • <$0.13 per use, which is 74% less than the cost of single-use containers

  • 93% of Brandeis students participate in the program

  • Diners reuse 2.4X per week

  • 2-day return timeline

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Interested in figuring out what charging would be best for your dining program?

Reach out to us at sales@topanga.io to customize a ReusePass reusables program to meet your dining team’s needs and to explore more of our data behind charging.