Customers Asking to Pay Over Time

[Memphis Rob]

I suspect many of us recieve requests from customers to pay their bill over two or three months, particularly for large jobs. Practical business sense tells us not to engage in this practice for a number of reasons, not the least of which is the risk of not receiving any further payments. On the other hand, a longtime, trustworthy customer may represent a different circumstance. Any one care to comment on this?

[Mario]

I suspect many of us recieve requests from customers to pay their bill over two or three months, particularly for large jobs. Practical business sense tells us not to engage in this practice for a number of reasons, not the least of which is the risk of not receiving any further payments. On the other hand, a longtime, trustworthy customer may represent a different circumstance. Any one care to comment on this?

 

 

I have a customer trying this with me. I have his pickup truck here which needs a transmission. I quoted him for the job, had the truck towed (at his expense, but I paid the driver) here. He then called me asking me to look over the engine to see if the truck was worth putting a transmission in. I told him I would give it a quick glance to see why it wasn't running properly (besides the transmission). I pulled some codes for a multiple cylinder misfire, and it ended up being the firing order. I fixed it, replaced the cap, rotor, and plugs (at his request). He then comes to pay his deposit on the transmission job and asks why his bill is $278 higher then I quoted him. I explained the caps, rotor, plugs ($38 parts, $114 labor), the towing ($50), and tax ($96.72) was the reason why. I then got the earful about how times are tough blah blah blah and he wants to make payments.

 

I am a nice guy to a fault and said I would see what I could figure out, but after I took a step back to think about it, its too risky to figure out. He needs to come up with the money because I can't take a chance on getting burned.

 

I haven't been around long enough, but I have worked in the trade for a while, and if you get burned on money, good luck trying to collect. I too am interested in what our veteran shop owners think/do about this situation. Joe?

[CARMandP]

I never allow this except for close personal friends that I know will get me the money. Otherwise, that is what credit cards are for.

[FROGFINDER]

I will carry someone only for the amount i am willing to lose and be able to pay the company back myself. That being said give the person twenty business cards and tell them to send you work and you will give a Bird Dog Fee towards what he owes you on each sale. I also suggest visiting the customers house with flowers and a fruit basket since times are tough.

[DUFRESNES]

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[benzfxr]

I had a long time good customer ask for time to pay. I said yes and haven't seen him in 4 years.

[Joe Marconi]

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[TheTrustedMechanic]

In my experience, allowing a customer to make payments is a good way to make a "good customer" some other shop's customer. I've tried it and gotten burned almost every time. I've written up a payment agreement spelling out deferred interest and such and it still does not make a difference.

 

I tell my customers that I have an agreement with my banker, he doesn't fix cars and I don't make loans. There are enough payday lenders out there that if someone doesn't have a credit card they should be able to get the cash. And if they don't have a credit card, why? As Joe mentioned, "If a customer cannot get credit by one of these companies, WHY WOULD YOU EXTEND CREDIT???" I know there has been a lot in the economy lately, but why should you be their credit source?

 

I've heard form a couple shop locally that GE Capital was very tight with their credit, and they charge you 5%, 7%, 9% or more depending on the term of the credit extended to your customer. 9% seems like a lot, but if you agree to carry the note and the customer doesn't pay, then that good will gesture just cost you 100%.

 

In short, DON"T extend credit to your retail customers.

[Genuine Car Care]

We use Crosscheck ,

http://www.cross-check.com/

and they will approve 4 checks over 60 days passed solely on check writing history of the customer.

We do a lot of them in these economic times and it works extremely well.

It allows the customer a chance to float it over 60 days without a new card and without interest.

It doesn't cost us anymore than a normal credit card transaction fee.

If they default you still get paid.even if they stop payment as long as you ran the check through their system.

 

works well and I get a lot of large jobs that we would miss out on otherwise.

 

Don

Edited January 26, 2012 by Genuine Car Care

[DUFRESNES]

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[Genuine Car Care]

Is it possible just to use it for credit for the customers. We have very few customers write checks and haven't had a bad check for 10 years. Is the charge around 5%. Thanks for the info.

Unfortunately it must be hard checks,they write all the checks for the same day and then you and they determine when to deposit the others over the next 60 days. you must deposit the first check within 3 days.

And the cost is relative to a credit card charge.

 

and again I do a lot of them it works well , I probably have 15 in the folder right now

Edited January 26, 2012 by Genuine Car Care

[DUFRESNES]

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