The talking machine world (Jan-June 1919)

January 15, 1919 THE TALKING MACHINE WORLD 15 How to Keep the Instalment Accounts on the Right Side of the Ledger By Courtenay Hamson Five out of ten talking machine stores would without a doubt have to quit business if they stopped selling machines on the "payment" plan. But they won't quit this plan, and there is no reason why they should. The great American public has become used to buying everything from jewelry to clothes on the time-payment plan, and with each passing year this method of retailing is being put on a higher plane and is becoming recognized as the logical method of selling goods to people in moderate circumstances who compose the greater part of our population. The payment plan is here to stay, but just for that very reason talking machine dealers should study ways of improving their methods of handling payment accounts so that they can do the largest possible business with the least risk. Of course, when a machine is not paid for it can always be "pulled" under the leases usually signed up when the sale is made, but any talking machine retailer knows that the more of such cases that arise the more expense he is put to, the more second-hand stock he accumulates, the more bookkeeping he has to do, and there are cases, of course, where such accounts are nearly a total loss when the customer fails to meet payments and "skips," taking the machine along. Obviously care ought to be exercised in giving credit privileges if collections ai'e expected to turn out well, and hence if sales are expected tc prove profitable. Because, as already intimated, there is no use of selling goods that only pile up trouble and that eventually prove to be more of a liability than an asset. On the other hand whoever has charge of arranging for a ciedit ought not to be too quick or harsh in judgment. In fact, the happy medium of extending credit on the time-playment plan is for each prospective customer to be treated as an individual, and each case taken on its own particular merits. As "sure as shootin' " a business that has too many set "rules" for opening payment accounts is going to get stung occasionally, just as is a concern whose rules are not so strict, and besides, by having rules and enforcing them too strictly, a lot of good business will be "passed up" that otherwise could be put on the books and made to yield a profit. From my personal experience in retailing talking machines on the payment plan and from talks with other phonograph store owners I have gathered considerable information about the best way of making instalment accounts remain on the profit side of the ledger always, and other dealers may be interested in some of these ideas. Understand, however, that they have to be interpreted to meet the locality where they are applied, and they are not meant to ai)ply to individual cases. Instead these "rules" are for common sense use, and fit the general situation. In the first place, when a person comes in and wants to purchase a machine on the payme.it plan a fair down payment ought to be demanded. If the customer can't pay anything down, this very often indicates that he or she is extravagant, and will not be able to meet subsequent payments. Next, as to arranging the size of the after-payments: Don't make m Training the Cus | I tomertoMakePay m ■ ments Regularly Is m I the Real Big Secret ■ them too large, or the customer will not be able to meet them and your having to "dog" him for the money will make him dissatisfied, will lose his friendship, and ultimately perhaps result in your having to repossess the machine. In other words, the secret of success in your credit methods is not how big you can make the payments, but how well you make the terms to fit the individual customer so that he can promptly meet each payment, can do it cheerfully and hence will remain a friend and booster of your store, and a record buyer, too. If you make the terms right, and keep your customer "in tune" properly you should do away with your collectors, if you have any, and instead have your customers come into the store and pay their own instalments. There is no reason why you cannot make this plan a success. If some of the biggest furniture stores in the country, catering to "high and low" classes of trade, can make a success of the plan of having 95 per cent, of their customers come in and pay instalments, you certainly can do \i Of course, some people would rather have a collector call on them, but if you have only a few such accounts, one of,the boys can take an afternoon off each week and round these up. The average person, if half-way decent, likes tp be put on honor, and deep down inside takes a certain pride in being trusted to come in and pay accounts when they are due. Another thing. every time you have a time-payment customer call at the store to make a payment you get a chance to interest him in records and other things. Many sales can be made in this way that you would not otherwise make. Speaking again of extending credit, you should demand an unusually large down payment from colored people, foreigners, questionable characters and people just starting in any business. Statistics show that the classes named are very poor risks for the dealer who sells on the timepayment plan. Don't sell a machine to a lawyer on the paym^ent plan. If his credit is not good enough for open account, better keep the machine on your floor. Lawyers know how to "beat about the bush" so well that if they want to renig on a time-payment agreement they can keep you out of your machine and money for a long, long time, and besides cause you a lot of unpleasant notoriety and expense. Some time back I spoke of the necessity, in order for collections to come along smoothly, of not making the payments on a machine any more than the customer agreed could be met cheerfully, and promptly. Sometimes, however, even when this precaution is taken, the customer will fall behind in payments. Naturally, you either write him a letter and ask him to come in and settle — you keep writing letters, maybe making the customer "sore" — or else you send a collector who will often get into a heated argument about the missing payments, and also will get the customer "peeved.'" Now the best way of disposing of such cases is to get the customer into the store, and then make an entirely new agreement, one that the customer can meet. What is the use of working your head off to make a customer keep up a two-dollar per week payment, and in so doing making the customer sore, and perhaps having finally to take back the machine, when by getting the customer to come into the store and have a heart-to-heart talk you can make a new agreement changing the payment to one dollar a week, and still get your money eventually, and keep the customer's trade and friendship? Isn't that just using common sense? Of course, such leniency, if you wish to call it that, need not be extended unless you have exhausted all other means of "getting the money or the machine," but such "leniency" pays in the long run when it is extended. Referring once more to having people come to your store and pay, one of the most successful talking machine stores I know of does tl-.is: After a customer has come in and made arrangements to get a machine on time, and has made the first payment, that customer is sent a (Coniinttcd on fage IS) EXACT SIZE If you have not heard the FLETCHER REPRODUCER / Order a sample and be convinced of its superiority. / Your satisfaction or money refunded. Samples $4.00. FLETCHER-WICKES CO. 6 E. LAKE STREET CHICAGO, ILL.