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Allowing customers to purchase with credit is not a good way to start a new business or to run an existing one.

Nowadays credit cards may help with this problem. However some owners fall into the trap of charging. There’ll be a certain percentage you won’t be able to collect.

Here is some advice on collecting if you’re in this trap.

Best time: The best time to collect is when you are selling him something BEFORE you let him have it. A phone call about his credit to a credit agency will be more than worth the expense.

Post card: My father would send out a post card to the debtor asking him to come into the store as he would like to see him…no reason, just asking him in. Of course, when he came in he would be asked to pay his bill. This seemed to work wonders for little expense and effort.

Colored statements: Put the account due on a bright colored statement to get the debtor’s attention

Certified letter: Send a certified letter with return receipt to the debtor with your statement. The object is to make sure he got it and to get his attention.

Deliberate mistake: Add a large amount to his bill deliberately, such as $100 more than his bill amount or more. The object is to get him into the store to argue about his bill. Of course, you apologize and offer to correct it when he pays it off.

Greeting card: Send a greeting card envelope with a hand written address but no return address. On the inside, fold the statement to look like a wedding or baby announcement.

Prize: Send a letter stating your debtor has won a prize and to stop and pick it up. Of course, the prize is the bill. However, if you wish to give him a pen for signing the check, that is fine. The police have even used this gimmick to catch criminals.

Small Claims Court: For a small fee you can put in a claim for the amount due plus the court fee. Possible the debtor won’t show up and you can get a judment on them. However, if they don’t have any tangible assets, this is not of much value.

Collection agency: Yes, if all else fails, you can turn the account over to a collection agency, but these agencies do charge a fairly large percentage to collect your past due account. Use this as the last resort.

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