Business phone contracts can be a bit of a double-edged sword. On one hand, they can ensure that you and your business are receiving all the promised features from your provider at the best possible price. However, they can also be used to chain your service subscription to a particular price point, service level, hardware, and provider for a period of time, usually years.
Here are 10 things you need to know about business phone contract renewals.
1. You should be notified 30, 60, and/or 90 days before the end of your contract
A good business phone service provider will remind you well in advance that your contract is expiring and should begin to talk with you about potential upgrades to your service and about renewing your contract. In fact, you shouldn’t only hear from your provider at renewal time. But unfortunately…
2. Some Phone service providers don’t give a lot of warning
Service providers are currently only required to give one warning 120 days before your contract expiration date. This is considered a “fair warning”, and is usually found in the small print of your monthly invoice.
3: a Verbal proof is not enough
Don’t rely solely on what a representative tells you over the phone about your contract renewal, ensure you have it in writing or via email as well. This gives you a proof of any change that has occurred, such as going from a contract to month-to-month after your contract ends, increasing the service level, or adding features to your plan.
4: If you’re thinking of changing service providers, request to be switched to month-to-month services
Informing your current provider that you want to be switched to month-to-month services gives you the leverage to change providers at the end of your contract, or negotiate a better deal if you wish to stay with your current provider. Some service providers will inflate the monthly price when you leave the contract and switch to month-to-month in the hopes that you will make a decision soon. Be wary of this tactic and see it as a sign you need to move on.
5: Cancelling mid-contract? It’ll cost you
As a penalty for leaving the contract early, some service providers will charge business clients 50% of the remaining balance of the contract. Recently some providers have even tried to charge 75-100% of the remaining contract balance, which could cost even small accounts for thousands of dollars.
6: Beware, some contracts are auto-renewing!
Some contracts have a clause whereby the contract automatically renews at the end of the term with no action required on your part. If this is the case, your telecom provider should keep written and signed a record of your contract, with the clause that it will be an auto-renewing. It is their responsibility to show that they have given fair warning that the contract is auto-renewing at a given date as well (re point #2). If not, your business can be released from the contract much easier.
7: Know your billing start date
Some phone service providers will start billing your organization as soon as you plug the phones in, even if you haven’t actually begun to use the service at that point or regardless of if the system even works. The majority of providers will wait until everything is fully-functional on your end before promoting your first invoice and provide a 30-day money-back guarantee!
8: Thinking of canceling? Make sure you give notice
Mark your calendar! 60 to 90 days before your contract end date, notify your provider that you wish to move to a month-to-month service plan with the ability to cancel at any time. If you do not give your telco enough notice, your contract may auto-renew or prove difficult to get out of, leaving you trapped in the contract for another term.
9: Have you added services mid-contract?
Ensure you check when each of your added services’ contracts ends. Some service providers will renew all contracts at the same time when a new service is added, while others will leave all services on separate terms. Having multiple contract end dates makes it harder to leave the provider as some necessary contracts will expire before the additional contracts.
10: Turn it all off!
So your contract is done and you’ve canceled all your services. Make sure that all of your services will be turned off when you switch providers. There are often cases where businesses have been billed for services they thought they weren’t receiving anymore because they didn’t specify to turn off those services as well. As always, get everything related to canceled services in writing too.