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Regular Expenses in Small Sums will Become a Significant Amount Beware of Various Charges and Service Terms of Storage Services

  • 2020.03.16

Owing to tiny living space in Hong Kong, storing collectibles and clothing has been a headache to many households, thus many of them will opt for mini-storages and door-to-door by-box storages as solution. A recent survey conducted by the Consumer Council on 23 storage service providers indicated that their charging schemes are complicated. Apart from the fixed monthly rental, there were other surcharges covering registration, transport, storage and retrieval, some even set a minimum charge for their services. Consumers are advised to estimate their storage volume, rental period and frequency of storage and retrieval, as well as the monthly cost of storage very carefully, and scrutinize the necessity to retain the items before engaging the rental service.

From December last year to January this year, the Council issued questionnaires to 84 storage service providers to inquire about their services but only 21 of them responded. A mere response rate of 25% was rather disappointing. To gather more information for comparison, the Council also included 2 more storage service providers based on information from their corporate websites. The survey thus covered a total of 23 storage service providers, of which 7 offer both self-storage and door-to-door storage services, 11 only provide self-storage services while 5 only provide door-to-door storage services.

Self-storage

In this survey, there were 18 companies providing self-storage services, of which 12 are traditional mini-storages, i.e., the storage place is fixed; 3 are the emerging mobile mini-storages, i.e., the storage lockers are centralised. The remaining 3 provide both traditional and mobile mini-storage services.

According to the price lists provided by the mini-storages, it was found that the regular monthly rental of the mini-storage varies quite significantly. Take the more popular 12-sq.ft. mini-storage as an example, the regular monthly rental ranges from $480 to $1,709, a difference of over 2.5 times. For a mini-storage of 16-sq.ft., the regular monthly rental ranges from $696 to $3,038, a difference of more than 3 times. Even when comparing the mini-storages in the same district, a significant difference in the monthly rental was recorded. For instance, the biggest difference was to rent a 16-sq.ft. mini-storage in Chai Wan with the minimum monthly rent of $984 to the maximum $2,048, representing a difference of nearly 1.1 times.

There are 17 mini-storages offering discounts to pre-paid customers, ranging from 5% to 50% off, the longer pre-paid rental period often comes with higher discounts. Even though the discount for pre-payment is attractive, it does not mean that the monthly rental will be guaranteed to stay unchanged during the pre-paid period. 1 service provider stated that before adjusting the monthly rental, it would confirm with the customer to agree to pay the difference; another service provider said it would charge the new monthly rental after serving written notification to the customer who would need to pay the difference. Should the consumer terminate the service during the promotion period, the mini-storages generally would not offer any refund. There was only 1 of them which, subject to circumstances, will provide refund on a pro rata basis. Therefore, before choosing a pre-paid plan with a relatively long rental period, consumers are advised to consider the actual storage needs and clearly understand the service terms for adjusting the pre-paid discount offer.

The minimum rental period for mini-storage is generally 1 month. In addition to the monthly rental, mini-storages would generally require 1 to 2 months’ regular monthly rental as deposit. On top of these, other fees may also apply. For example, 1 would charge a registration fee of $75; another would require customers to purchase a lock for $30, while customers of 9 mini-storages need to purchase access card at a price of $30 to $60 for entry and exit.

Although most (14) traditional self-storages are open for 24 hours, most of them located in industrial and commercial buildings. Consumers are advised to take note of the opening hours of the buildings where the mini-storages are located, from the survey, only 4 mobile mini-storages open for 24 hours. Apart from 1 where instant access can be arranged by the staff, for the remaining 5, appointment must be made at least 2 hours to 1 working day in advance, so that the storage locker can be transferred from the central warehouse to a common retrieval/storage area. It is worth noting that there is 1 service provider that would charge retrieval/storage fee of $69 each time for an unlimited access within 24 hours.

Door-to-door by-box storage and by-square-feet storage

In order to save the troubles on pick-up/drop-off of the stored goods, many consumers will opt for door-to-door storage services. Among the 12 service providers offering door-to-door storage service in this survey, 2 provide by-square-feet storage service, 6 provide by-box storage service, and the remaining 4 provide both of these services.

The door-to-door by-box storage service companies will provide storage boxes for consumers to organise their storage items, and then arrange pick-up to the warehouse for storage. The monthly storage rental charged by 10 service providers ranges from $39 to $49 per standard box (with 60cm length, 40cm width, 35cm height), a difference of more than 25%. Of these, 8 companies provide specially designed document boxes and/or boxes for hanging clothes. For items that cannot be placed in the designated storage boxes, such as suitcases, 6 companies can store them for a monthly rental from $ 49 to $119.

All companies that offer door-to-door by-square-feet storage service would not provide exclusive storage boxes. 1 of them will charge according to the actual size of the storage items, ranging from $38 to $48 per sq.ft.; the remaining 5 will charge in accordance with the storage space, of which 4 would charge a monthly rental from $520 to $820 for a mini-space of 12-sq.ft., while the monthly rental for a mini-storage of 16-sq.ft. is $788. Comparing the monthly rental alone, its charge is significantly lower than that of the self-storage.

Although the monthly rental for door-to-door by-box storages seems lower, 7 service providers require minimum charges, and the charges are based on the number of storage boxes, monthly rental or the amount paid on the first order, ranging from $126 (i.e. 3 standard boxes) to $500 as the minimum charge for the first order (based on 1-month minimum rental period, equivalent to renting around 11 standard boxes). Consumers should pay attention to the minimum spending requirements and choose the appropriate service providers that best fit their personal storage needs.

Unlike traditional mini-storages which allow customers to have direct access for storage/retrieval at any time, door-to-door storage service providers are responsible for goods delivery, which would incur transportation fees, which is usually calculated by "basic transportation fee plus additional fee according to the number of storage boxes" (5 companies). Some even charge a minimum transportation fee, from $116 (3 boxes) to $180. The door-to-door pick-up and delivery service generally requires advance appointment of at least 1 to 3 working days and operate from Mondays to Saturdays. Only 2 companies can provide services on Sundays.

Assuming that 5 standard boxes are rented for storing clothes for a year, in addition to the initial entry, the boxes are retrieved twice for changing seasonal clothing; 2 days are needed to sort out the storage each time, and the empty boxes are returned within 30 minutes in the last access. Without applying any discounts, the total charge for the service ranges from $2,740 to $3,810, representing a difference of about 40%. With respect to the company that charge the highest ($3,810), transportation fees accounts for almost 25% of the total charge, representing a rather big proportion. It can be a costly service if use for several years.

The survey also showed that only 4 self-storages include insurance protection in their monthly storage fee. Of these, 2 offered water damage and fire insurance as well as comprehensive property insurance. The maximum amount of protection for each item and each customer is $1,000 and $10,000 respectively. There was 1 offering a maximum compensation amount of $5,000 for each mini-storage; while another company offers third-party insurance and fire protection, with a maximum compensation amount of $3,000 per customer. On the contrary, most of the by-box storage plans include insurance protection. Of these, 9 would provide compensation up to $1,000 or $ 2,500 for each storage box. The insurance coverage is similar to those provided by the self-storages. To make claims, consumers may need to provide evidence of lost or damaged items, together with proof of the replacement cost or the original cost, such as the purchase receipt. For consumers storing items with high memorial values and collectibles, they should carefully assess the risk and purchase suitable insurance in advance.

Even though renting mini-storages and by-box storages offer extra living and storage space, these may not solve the root problem. The Council advises consumers to carefully evaluate their needs and volume of storage, distinguish between their "actual needs" and "desires" during shopping, and regularly tidy up household items to donate or resell the "unwanted" ones. This would not only save the storage rental fee but would also support the principle of sustainable consumption.

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