Dealing with Customers Who Don’t Pay

Retailers must periodically deal with customers who do not pay their bills in a timely manner. There are several approaches to this situation — some more confrontational than others.
Here is one set of suggestions from Michael Hess, writing for CBS MoneyWatch:
  • “Don’t get angry, vengeful, or personal: This is mistake No. 1 — immediately thinking of, and treating, a past due customer as an enemy or deadbeat. For sure, there are some sleazy operators out there, but more often than not, if a good customer has an atypical payment problem, it’s because he either faces a short-term crunch or is in real trouble.”
  • “Work with the customer, not against him: To the greatest extent possible and appropriate to the situation, you should continue to treat the customer like a customer. Be friendly and understanding, and try to come up with options and plans that might resolve the situation with minimal pain and unpleasantness.”
  • “Communicate often, in writing, and keep records of everything. Always start with a non-threatening written message pointing out the delinquency and asking for the courtesy of a prompt resolution by a specific date.”
  • “Turn to a collection service only when all other efforts have been exhausted: Turning an account over to an attorney or collection agency should be an absolute last resort.”
  • “Adjust for the future: As with everything, learn from your experiences. If your policies, the nature of your business or customer base, or other factors are pushing too many accounts to the wrong side of your receivables aging report, make changes.”
Click the image to read more.

Illustration by SKOOBA DESIGN
This entry was posted in Part 5: Managing a Retail Business, Part 7: Communicating with the Customer and tagged , , , , , , . Bookmark the permalink.

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