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Slow or Non-Paying Customers


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We have a small shop in a small town where feedback is important to us. We have a handful of customers that owe us money for one reason or another. I don't want my name in the local paper that I sue everyone that owes but how can you get them to pay. I know we can't go take wheel off to repo them or assume we can't? Looking to be that pain that they will just pay to get rid of me. We call or message and get the same story as always checks in the mail or I will stop in next week etc. What are others doing and don't give me the we don't allow charges because we don't either but everyone has that special case that it happened.

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  • Alex changed the title to Slow or Non-Paying Customers

Hi! I wanted to chime in here because I suffered this problem a long time ago - and you're right! Everyone is going to tell you not to take credit. I understand - it happens. But the truth is that you're running a business - not a charity, right? If I'm right -then it's binary. You do the work - you get paid. 

With that said, you mention something about NOT being able to repo the car(s). I can't speak to that - because I don't know your local laws - but I will tell you this. I work with a client that has had this issue several times. 

One example was trying to collect the rest of the bill on a BMW brake job. Calls the customer... and customer asks "how did we get to $1,200 on brakes?" But the fact was he approved the work before anything was done - actually made a partial payment when the vehicle was picked up - and NOW (and only now) needs an explanation. 

He paid not only for the brake job, but the tow, the storage and all over recovery fees. 

What the point is, is that you don't need customers like this.  Worried people are going to talk? Don't! Anyone who thinks you''re a "bad guy" because you want to get paid is a jerk and you don't want them as your customer. 

What would I do?

1) Make a nice call - ask to come and pick up the check - it's not in the mail - not coming in next week
2) If they give you ANY RESISTANCE tell them the tow truck will be there in 15 minutes. 

That should make a difference. 

In the meantime, I would SERIOUSLY look at what your local laws and requirements are - and follow them. At least you'll be prepared for the next time - if you make that mistake again! ;)

Hope this helps!

Matthew
"The Car Count Fixer"
PS: Join me on YouTube and Grow Your Car Count, Income & Profits! Subscribe!

P.S.: If this doesn't shake you up a little bit, THIS WILL!

 

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After sending invoices and calling fails to yield positive results I have been known to go to the customer’s house at 6:00 am with our tow truck and park in the street blocking their driveway. First you will notice curtains or shades are moved with quick glimpses of inhabitants trying to see what your plans are. Then the front or side door opens and they step out briefly, acknowledging your presence with a half hearted wave and then they return into the safety of their house. Eventually they sheepishly walk out to the truck and ask what you want. At that time you calmly say “I just want to get paid for the repairs that were performed on your vehicle and when that has been settled I need to go back to work”. Do I have a legal right to do this? I don’t know and so far I don’t care because it works. I have also taken local customers to small claims court with equally favorably results but more time is spent representing yourself in court than an hour or two in front of a dead beats driveway. Do not worry about what people of that class and caliber might say to other people because it is useless anxiety. Never feel embarrassed to demand payment for work that was completed properly and at a fair price. The people who owe you money should be the ones that are embarrassed and worried that everyone in your small town will view them as a dead beat. Unfortunately  people like that have no pride and/or don’t care and that is why they ignored your previous attempts at obtaining payment. When they owe you money they will never come in so don’t worry about losing them as a customer, they are already lost. Once they pay up they may resurface in the future and request help, then it is up to you whether to forgive and forget. If you choose “forgive” just make sure you don’t “forget”. I have had to remind people (they needed no reminding but I do it as a formality to let them know where I stand) and I explain that I have no time or patience to chase them like the last time and full payment is expected at completion or the vehicle does not leave the property. Good luck.

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Excellent advice from previous post. Id just like to add that in my state a expressed mechanics lien is applied when work is done. Their vehicle is the collateral. I have it clearly posted in the office that payment is due immediately upon completion. Also if they leave it past the payment grace period there is a $20 per day storage fee. I also have a clear it don't budge until its paid in full policy, no exceptions. I do not accept checks, just cash or card. I've strictly followed these policies for the past 8 years and have had no issues getting paid. Remember its all clearly posted so they know when they step in the door. . . Hope this helps

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We also spent our share of years chasing money, and really sucking at collecting. We do not have a tow truck, although if i would have thought of it, I would have been more than willing to threaten a tow. It did eventually sink in that i am not a bank, so i should let the professionals handle deciding who to give out credit to. We started with Synchrony a couple decades or more ago with 90 days same as cash and now 6 months same as cash. I decided that the extra .5% for the discount rate was worth it and if they couldn't get approved, there was a good chance that I shouldn't approve them either. Historically we see a about a 50% approval rate with more being approved then not in the last year or so. We get access to the program as part of our certified service center program with Auto Value/Bumper to Bumper. We also have available the CFNA program through another program we are part of. The backend advantage besides getting paid, is that it makes future transactions much easier with the same customer. Today I have a call with a representative from West Creek Financial for a program that will approve 20-30% of those that Synchrony or CFNA won't approve. We are big believers in having financing programs available. 

We are also in a small rural community, not necessarily smaller than yours by population, but our percentage of households with 75k or more in household income is about 1/2 of yours and our percentage of households with at least one 4 year degree in the household is about 1/2 of yours as well( Holton). In any case, we are both in small rural communities. I find the visual of  "number of traffic stoplights in the COUNTY" helps folks understand what my definition of rural is. We have two traffic stoplights in the county and three blinking caution lights.  I suspect yours is similar(Jackson). I relate this information for the benefit of other readers. For some subjects relating to automotive service, it can be somewhat different, doing business in communities our size. 

I would encourage looking into having the ability of offering at least one of these type programs available in your store.  I clearly remember the transition from in house financing to Synchrony and how much easier it was to let folks know that although we do not have in house financing, we do have an option for them. I am equally looking forward to having an option for those that tell you right up front that they won't get approved. I am hopeful that Westcreek is an answer for those folks. 

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@rpllib Great information. I think the most important thing in your post was that you realized you're not a bank! I remember telling customers "We've got an agreement with the bank. They don't fix cars and we don't lend money!". That seemed to hit home with most!

Hope this helps!

Matthew
"The Car Count Fixer"
Join the conversation at Car Count Hackers on YouTube!

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  • Have you checked out Joe's Latest Blog?

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      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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