• Last Updated:
  • Dec 12th, 2017 12:15 pm
[OP]
Deal Addict
Jul 18, 2016
1986 posts
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Giving a customer a break.

I run a delivery service. Every delivery yields approximately $11 of revenue for my business. 7 days a week, a 5% selection of my total customer base, repeats every single day. Occasionally, I will bump into a customer who is short of cash, and can't pay for the product and the delivery fee. By giving them a break and waiting for their next order to pay me, I am risking an average of $50 product cost and a $11 delivery fee.

Today, I ran into a short of cash customer who left me very uncomfortable. He has repeated his order 14 times in the last month. Today, he was short of cash and asked for a "hail mary" until Saturday. I decided to take a risk and told him, ok, I'll let it go this time, but please don't make a habit of this. Only two days ago he told me that he was going through personal bankruptcy proceedings. When I arrived at his door, he was quite upset. Apparently, my comment about making a habit of this, had really embarrassed him.

What is the correct way of handling this?
14 replies
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Dec 28, 2010
390 posts
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Well maybe if you had added 'I'm sorry to hear this but (let's not make it a habit)" would have been a bit warmer. You're running a business. It's your income and I would too make a comment like you did.
Actions speak louder than words
[OP]
Deal Addict
Jul 18, 2016
1986 posts
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VESTEGAARD wrote:
Nov 9th, 2017 12:57 pm
Well maybe if you had added 'I'm sorry to hear this but (let's not make it a habit)" would have been a bit warmer. You're running a business. It's your income and I would too make a comment like you did.
Yes, maybe that would have been warmer. Its tricky because he is a regular customer. On the other hand, he asking me to risk one third of the revenue I've earned from him over the last month.

Its rather tricky because I do pride myself on my ability to develop relationship with customers. This means they repeat frequently and tip well. However, the price I pay for this is that these guys consider me almost like a friend who will do them a favour. I have a business to run, and I can't make a habit of doing favours for a big chunk of my customer base. Those who repeat regularly develop the attitude that I somehow owe them the favour, and maybe I do. I'm not sure.
Banned
Nov 27, 2006
2200 posts
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Toronto
If it's a cash business, then no. No money, no product.

now you have to worry about a few factors:
1) client might not pay ever.
2) you have to worry about trying to collect.
[OP]
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Jul 18, 2016
1986 posts
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sirex wrote:
Nov 9th, 2017 6:54 pm
If it's a cash business, then no. No money, no product.

now you have to worry about a few factors:
1) client might not pay ever.
2) you have to worry about trying to collect.
Yes, another person just pointed out something else. Because, I am distributing alcohol, I am not legally able to give what is effectively credit. I must not allow this to happen again. In this case, I can set aside the moral sensitivity issue and simply quote the law.
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Oct 1, 2011
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I'm not an entrepreneur, but if you're dealing with cash, and he comes up short, it's HIS responsibility to borrow some cash from elsewhere (friends, bank cash advance, whatever.)

I don't think you did/said anything wrong.

The personal bankruptcy story makes it worse. He's not in a good financial situation...don't want that to spill over into you.
Newbie
Nov 15, 2017
19 posts
3 upvotes
I probably wouldn’t have used those words. I would say something along the lines about not getting credit myself and then say I can do this one time but there will be a fee ($2 to $5). I collect this fee from all my customers who get credit, so I am cover when someone doesn’t pay.

Customers getting upset or making us feel we owe them a favour is stupid. Of course, I don’t tell them that. I love it when they say they spend x amount of money in the store yaddi yaddi I kept this place running, yet they don’t realize they are less than 1% of the customers who walk through the door. Again, I just smile…and think ‘good luck asking for credit a second time’.
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Dec 12, 2009
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bewiseman wrote:
Nov 9th, 2017 12:49 pm
an average of $50 product cost and a $11 delivery fee.
... He has repeated his order 14 times in the last month. ... Only two days ago he told me that he was going through personal bankruptcy proceedings.
Accept that you are dealing with a market segment that has a number of personal problems mostly related to their consumption.
14 x $61 = $854 a month spent on booze is likely the reason they are facing bankruptcy.
bewiseman wrote:
Nov 9th, 2017 1:05 pm
However, the price I pay for this is that these guys consider me almost like a friend who will do them a favour. I have a business to run, and I can't make a habit of doing favours for a big chunk of my customer base. Those who repeat regularly develop the attitude that I somehow owe them the favour, and maybe I do. I'm not sure.
Can you legally do some form of rewards program? e.g. one free delivery after 12 like a bakers dozen?
bewiseman wrote:
Nov 9th, 2017 8:37 pm
Because, I am distributing alcohol, I am not legally able to give what is effectively credit.
That is your answer.
[OP]
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Jul 18, 2016
1986 posts
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ROYinTO wrote:
Nov 20th, 2017 9:03 am
That is your answer.
Yes, I understand this now. I have since made if very clear to him that I have a business to run and must follow the rules so that I don't lose my license. He seems to have understood and order a couple of more times, however he's been quiet over the last week.

Most of my clients are actually very decent people without any real issues. However, this is the occasional one who makes it challenging.

Good idea about the promotion. I am trying to get that setup correctly in my website.
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Sep 23, 2007
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Any business with enough customers will eventually run into customers who have trouble paying. That's why accountants created the concept of Accounts Receivable and Allowance for doubtful accounts. You just have to accept that some people will run into difficulties. You give people a break at your own risk.

As a business, you should set up clear rules so that the system works. If these dead beats are such a big problem, you should reconsider doing cash on delivery. Maybe set up a website so they can order and pay first? Or simply be strict and refuse to give product until you see the money.

Now if you say because you are in the alcohol business and a certain % of your customers will be dead beats with poor credit history (so online payment won't work)...then that's more reason to have clear rules on these issues and stick to your guns.

I don't believe in "using better words" to be warmer. Sure you don't need to be a dick about it with him. But I don't see anything wrong with what you said. How upset a person is doesn't change the fact that when buying something, you need to pay. You can't go to a grocery store, give a sob story, and expect the cashier to let you go without paying in full. If they can't afford it, maybe they shouldn't have ordered it. This is alcohol. I'm not seeing a "humane" need to provide your products to him.
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Mar 23, 2008
3836 posts
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Money has no feelings.

You either have it, or you don't. If he does not, cease the deliveries until it is paid in full.

I learned this rule the hard way when I got ripped almost 50k
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Dec 16, 2015
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Why cant ur customers go to lcbo themselves?
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May 9, 2009
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Redsanta wrote:
Dec 2nd, 2017 6:13 pm
Why cant ur customers go to lcbo themselves?
Because most of them have probably lost their license.
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Apr 21, 2014
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Redsanta wrote:
Dec 2nd, 2017 6:13 pm
Why cant ur customers go to lcbo themselves?
or even students. WHen I was living in Waterloo they had "dial a bottle" if you're already drinking and are running out of booze, there isn't a lcbo walking distance so I used the service a few times.
Cheaper than a cab there and back.
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Aug 15, 2015
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I am assuming whenever you are delivering to probably has stuff there.

If they don't have cash, ask them to give you whatever they have on location or the two of you can go to an ATM together. Either way, you are not leaving your products with said customer until you have received something in return. You can then write them a receipt saying I have taken this due to your lack of cash payment in the amount of whatever. You have agreed to give whatever to me as remittance to the missing cash amount or whatever.

It's sorta like a deposit. You don't want to be like your customer and go into bankruptcy too for being "nice".

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