< i w iw M I Muiiiii i ii HWWmia aHi l lW M Mi >riM< ii H««ww *;..— -• » * |tUiilil « ^p lttUitUt i . W itf* l iUlL!L i U .1 liff<#!UL'-UTi:q Hntt QfoUcge of Agrttultuw l^t Q^ocnell Uniuecaitji Cornell University Library HF S556.N5 96 plans for collecting money by mail; te 3 1924 013 767 664 The original of tliis book is in tlie Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924013767664 AsHTON Dry Goods Co. trriec RocKFORD. Illinois. •OTh nkB»M«MC», Krs. JazBsa Iteld» 430 E. 16th St. City. You Dtay reDeniber a letter m eent you noently reeardln^ charge eccoonts in uhloh ve expreseed a desire to oloee all aooODjtte doe on or before Jan. Slet,, the end of our btulneBS year. We find that your acootrnt, a atatenent of vhloh we enolose. Is still unsettled, and we send thle reminder of It beoauee we fee] enre that you have unintentionally overlooked the natter t and that you will consider that we are doing a friendly aot In bringing it to your attention. Generally STieaklng, it i» underatood that oharge aeooants are to be settled evei'^ thirty days; Indeed, that Is the baals upon whloh credit la extended try buslneas Bien« as a rule. Vto realise, however, that such things are sanetlmeB forsotten* or that there tnay be unexpected conditions whloh mey make jtran^ thlrtyniay BOttlements Inoonvenient for our eustoioers. If you aliqtly forgot It, a reminder is enouf^. If you find It difficult at the time the payment is due to meet It, we want to be liberal; and If you would let us know beforehand, or see us about It, no doubt an extension of tine night be arranged. Ve shall appreolate it, therefore. If you win let us know about this aooonnt, now past due; if it isn't eorreot, or it appear* to you that we have oade a mistake, we want to correct It, Rtt it te bad for both of ua to let It go along thle way. Tours vei7 truly, ASHTOB DRY QOOSS 00. CuuU^ li-^i^'^^^'^ OHA-LT SINGLE OUT YOUR DEBTOR Do not allow debtors to feel that they arc "lost in the crowd" — that your letter comes to them as one of hundreds sent out to delinquents. Go to them through your letter as you would m person. Make each communication stand out alone and show individuality. Here is an excellent example. 96 PLANS FOR COLLECTING BY MAIL TESTED PLANS FOR REDUCING CREDIT LOSSES— PROVED IDEAS AND LETTERS THAT COLLECT —SHORT CUTS FOR HANDLING COLLECTION DETAILS — POINT- ERS TO OBSERVE WHEN EX- TENDING CREDIT A. W. SHAW COMPANY CHICAGO NEW YOEK LONDON CASS, HURON AND ERIE STREETS. CHICAGO THE SYSTEM PLAN-BOOKS BUSINESS men leam by exchanging experiences; each profits by contributing his own successful ideas and then drawing from the common fund. This plan-book, therefore, constitutes a pooling of practical experiences on the subject indicated by the title and is one of a series issued by an institu- tion which for more than twenty years has served as an assembly-point for business ideas, plans, methods and policies. More than 650,000 business men are readers of System, the Magazine of Busi- ness, and Factory, the Magazine of Management. The plan-books are not sold. They arp ofiFered as supplements to this magazine service. Through their use business men often come better to appre- ciate the value of the broad scope of subjects treat- ed in the magazines themselves. Gathered in book form for convenience, these collections of plans fill a field quite distinct from that served by the ever-growing list of standard business books, with their thoughtful analyses and studied descriptions of policies and practises. The plan-books bear no pretext of being complete or critical. The plans are merely every-day "business tools" — ^for immediate and frequent use in any business with corresponding problems. Besides System, the Magazine of Business, Fac- tory, the Magazine of Management, and the British System, with their supplementary services, the A. W. Shaw Company also publishes standard busi- ness books. A catalog will be sent on request. Copyright. 1917, by A. W. SHAW COMPANY. Printedin U. S. A. FintFrint- IllE, June. 1917; Second Printing, Jsnoary, 1918: Third Printing, October. 1922* Fourth Printing, January, 1923; Fifth Printing, October, 1923. HOW TO FIND THE PLAN YOU WANT Plan No. Appealing to delinquents fiom as many angles as possible 51 AppeaUng to the debtors' sense of humor 64 Appealing to a debtor's sense of justice 1, 2 Avoiding a lawsuit S, 13, 27, 66, 78, 82 Avoiding the risk of giving offense 12, 14, 97 Avoiding the stereotyped form of stickers 15 B Branch office collections Controlling 4 Capitalizing the fact that no collectors are employed 41 Card, A, for "last time" collections 54 "Cash and carry" plan. The 2 Cashing in before the sheriff arrives 73 Cashing in on accounts about to be outlawed 81 Cashing in on promises 16, 60 Changing from a credit to a cash business 2, 70, 72 CHARGE ACCOUNTS - opening 33, 40, 75 - closing, to force payment 6, 74 Coin cards. Handling small accounts with 18 Collecting by telephone 10 COLLECTION RECORDS - for mail follow-up 22 -for keeping files clear of dead material 33 - for instalment accoimts 53 - for watching collections from branch offices 62 Cooperating with your bank on sight drafts 56 Cooperating with your fellow mer- . chants 25, 38, 39, 46, 85 Controlling branch office collections from the main office 4 Credit, Educating your customer to the value of 40 Danger, The, of relying too strongly on postage stamps 45 Ddivering an order "C. O. D." to force action on overdue accounts 6, 74 Demonstrating to customers the value of takhig the discount 72 Drafts, The use of 1, 21, 23, 56 Educating your customers to the value of credit 49 Plan No. Eliminating guesswork in granting credit 75 Eliminating partiality from your credit policy 48 Enclosing coin cards for accoimts less than a dollar 18 Excuses, Allowing the debtor no loop- hole for excuses 67 Excuse, Estabhshing a plausible, for asking for settlement 26 Files for keeping collection records 11, 22, 33, S3, 6: Finding a "skip" 69 Fixing the discount date by telegraph 61 For the debtor who fails to make his promises good 60 Forcing collections by a something- for-nothing offer 77 Forceful letters that leave the way open for an interview 93 FORMS FOR COLLECTION RECORDS - for mail follow-up 22 - for eliminating dead" material 33 - for instalment purchases 53 -ledger page for instalment ac- coimts S3 - instalment account card 53 - receipt book S3 Getting collection letters to debtors at short intervals 55 Getting customers into the habit of paying 47 Getting customers to agree to a defi- nite payment 71 Getting instalment customers to "toe the mark" 57 Getting slow-pay customers to com- mit themselves 9 Getting statements to customers on pay day 42 Giving a definite reason why you need the money 84 H Handling easy-to-ruffle customers 86 How a secretary of a merchants' as- sociation keeps tab on charge cus- tomers 39 How a "simple melody" may be used to get the cash S2 How merchants may coopei'ate to re- duce credit losses 25, 38, 39, 85 How merchant associations reduced credit losses 25, 38, 39, 85 Plan No. How the secretary of a company may help collections How youi banker can help Instalment accounts 53,57 K Keeping a good grip on instalment accoxmts 53, 57 L Ledger-page form for instalment ac- counts S3 Letter, A short, for "gone beyond recall" accounts 34 Letters for stirring up slow-paying customers 90 LETTERS FOR "SLOW PAYS" AND "DEAD BEATS" - that contain no threats 83 - that strike as a unit 88, 90 -that weed out undesirable ac- counts 68 - the right and wrong kind of 28 - when courtesy fails 19 -when the account looks hopeless 5 - when your collection agency can- not get results 52 M Making it easier to pay than frame an excuse 16 Making it easy for delinquents to pay 17 Making prompt pay a town habit 92 Making the debtor cash in on his promises 60, 94 Making the payment date definite^ 36, 61 Making the point of contact with debtors more personal 24, 91 MERCHANTS CREDIT ASSOCI- ATIONS -how the secretary handles credit details 39 - illustrating the purpose of 85 -merchants interchange of credit experiences 38 - when a merchants association acts as arbiter 25 Mincing no words with "slow pays" and "dead beats" 2, 5, 19, 68, 88, 90 "Pay-up week," A 92 Personal touch. Getting the, into your letters 24, 91 Promises, When debtors fail to make good their 60, 94 Q Questions that make debtors think 83 R Receipt book for instalment customers 53 Befusmg a customer further credit and still holding his business 14, 30, 58 Plan No. Relieving your customer of the trouble of writing a letter 9 Relying on a mistake to get the money 5 Reminder, A forceful, with a "thank you" smile 20 Reminders for small accounts 76 Reminding the debtor with a leaf torn from a desk calendar 96 Re-selling a delinquent cmtomer 35 Revising letters that antagonize debtors 28 s "Safety first" folder. A credit man's 33 Serving notice of si^nt drafts 1, 21, 23, 56 Setting a definite discount date 36, 61 Sight drafts, the use of 56 "Skip," Locating a 69 Small accounts, Handling ^ 32, 76 Standardizing your credit policy 4, 80 Summary, A, of the credit policies of 286 business men 43 Telegram, Sending a, to fix discount date 61 Telephone, The, as a collector 10 Threatening a lawsuit 5, 13, 27, 66, 78, 82 u Using a "ballot" to get a reply 9 w "We," The, element in letters 1 Wearing down the "dead beat" with persistent letters 31 Weeding out undesirable accounts 68 When a customer asks for a time extension 50 When a customer has a grievance 1 When an account exceeds the credit limit 12 When courteous letters have failed to get a reply 19 When credit references are not satis- factory 58 When credit should not be extended 44 When customers overstep their credit limit 14 When customers take a discount when not entitled to it 29 When debtors are extravagant 65 When instalment customers fail to pay because of lack of interest 35 When no collectors are employed 41 When payments are hopelessly be- hind 87 When sight drafts are dishonored 1 When special discounts are possible 59 When the collection agency is unable to get action 27 When you employ no collectors 41 When your collector is at fault 8 "Wai you," The, element in letters 1 HOW TO GET THE GREATEST VALUE FROM THIS BOOK There are scores of collection plans in this little book, but each of them was selected only after one or more similar plans had been discarded. Several hundred plans were carefully inspected to secure the 96 printed in the book. "Where did they all come from?" you will probably ask. They have been furnished by a group of unusually successful business men with which the echtorial organi' zation of the A. W. Shaw Company has built up a confi- dential contact. Only those in this group who have specialized on working out plans and methods for collect- ing money supplied material for this particular book. So the book really not only contains the very best plans from among several hundred for handling collection details, but the best plans worked out by the men with the best records for perfecting plans whom the A. W. Shaw Company has been able to discover after a country- wide search extending over a number of years. This explains why the plans cover so many types of collection problems. But this only increases their value, of course, for it is a demonstrated fact that nine out of every ten plans that succeed with one type of proposition can be used for almost all other types. Furthermore, the ever increasing intensity of the competition which business men face nowadays makes it necessary for them to draw their ideas from more than one type of proposition if they are to keep up to date. Just try out one or two of the plans that appeal tc yo« most if you want a first-hand proof of this assertion that ideas can be transferred from one field to another. As a matter of fact, there are many classic incidents illustrat- ing this truth — the cash register is said to have come from a device for recording the revolutions of a ship's engines, for example. These incidents all go to illustrate the important fundamental truth that the various types of business are after all very much alike. The A. W. Shaw Company has on file records of hun- dreds of letters which demonstrate the practicability of using the other man's idea. There is even a department "How I Used Another Man's Idea" in its magazine. System, which you will receive in connection with your purchase of this book. Here is a good example of these letters from a recent mail: W. D. James is secretary and general manager of the James Manufacturing Company, and a regular reader of System. In an issue of System he read an article by Robert P. Wilcox, general manager of a St. Louis department store, on "Finding Who Makes the Mistakes." Now Mr. James manufactures sanitary barn equipment, but he quickly saw how he could use Mr. Wilcox's store plan to advantage in his manufacturing business. Let him tell in his own words about the idea which has reduced plant and office errors of all kinds to one-fifth their former number: "Mistakes will occur constantly in any business," he says, "but when sufScient notice is taken of each one they are apt to diminish in number. The article in System emphasized this point and described a specific plan. Of course I had to change the details somewhat to make the plan exactly fit my business, but the net result was that I worked out a form sheet for reducing the mistakes in my own business. "Each employee keeps a few of these sheets in his desk, and whenever he finds a mistake of any sort whatever he describes it on one of the sheets. This goes at once to the credit department, where the error is investigated, checked up, and the sheet sent to the accounting department. There it is retained until the end of the month, when it goes back to the credit department attached to a copy of the monthly statement sent to the customer who was affected by the error. Often the collection of an account where a serious error has been made is not pressed until the customer is thoroughly satisfied. When the account has been settled the service record is filed against the employee responsible. Employees know they are judged for 'raises' partly by their accumulated service records." Be sure to read each issue of System carefully, for it will describe to you month after month not only many other tested plans for increasing your sales, but also new and practical methods for advertising, increasing sales, training salesmen, keeping records, holding down expenses and carrying on all the other activities of your business. PLAN NO. I THIS PLAN'S RESULTS AVERAGE 89% One of Ike letters ahovm in ihis jian broughi seventy-eight ehecka out of a hundred letters mailed; another "jnilled" either a check or an explanaHon for every letter sent out. "After I send my statements out I wait ten days, and if returns do not come in I send this letter," says the credit man of an Eastern firm. Your attention is respectfully di- rected to our invoice of July 10th, for $49.80, covering goods shipped you, state- ment of which was sent you a few days ago. By referring to the original invoice, you will see that, according to the terms, the account became due on August 10th. You will, therefore, kindly let us have your check by return mail. "The first paragraph gives all the information about the acxiount, and without definitely saying so, reminds the debtor that this is the second request for payment. The second paragraph gives the due date, and shows how long the account is overdue. It assumes the attitude, and subtly conveys it to the customer, without saying so in words, that, inasmuch as we have not written to the contrary, there is no reason why payment should not be made promptly. 10 PLAN ONE "The third paragraph conveys the idea that there is no doubt in our minds but that the return mail will bring the check. The letter is courteous and firm. In it we have not begged for payment; we show that we expect it. The entire letter is dominated by the 'wiU you' element; the 'we' element is left out. "A record of the results obtained with this letter shows that out of one hundred mailed, seventy-eight brought checks; four, requests for short extensions; one, a request for an adjustment of a complaint. "Frequently I resort to drafts. By employing the aid of a bank official to present my account for collec- tion, I gain formality and weight. I never, however, draw upon a customer without first giving him ten days notice. My second letter reads as follows: With additional reference to the pay- ment of our invoice of July 10th, covering goods shipped you -- $49.80 -- which be- came due on August 10th: Unless we receive your check within the next ten days, or hear from you with objections, we shall as- sume it is satisfactory to you to have us draw for the amount now overdue and act accordingly. Your remittance direct, however, is much preferred, and we earnestly urge that you send check by return mail. "Twenty of these letters brought thirteen checks and two requests not to draw drafts. At the expiration of ten days, if payment is not forthcoming, or a satisfac- tory explanation given, a draft is drawn. ' ' On small amounts, drafts are made payable on sight ; on large ones a few days of grace are given. After the draft is deposited in the bank for collection, I keep just PLAN ONE 11 as close watch on the account as before, because I have learned that some banks will favor debtors by holding drafts drawn against them for several days. If payment is not made, or the draft is not returned dishonored at the expiration of eight days from the date of presenta- tion, I trace it through the bank, and at the same time make a more urgent demand. "When a draft is drawn upon a debtor and returned dishonored, and my second demand brings no response, I write what I term my 'put-it-up-to-'em' letter. This reads as follows: The First National Bank has returned to us, dishonored and marked "no atten- tion", our draft for $49.80, drawn upon you a few days ago, covering your indebt- edness for goods shipped July 10th. This is our fourth request for a set- tlement of our account: three of which apparently have been ignored. You cer- tainly are not justified in treating us in this manner; if you have what you deem a reasonable excuse for withholding payment, we are entitled to know what it is; if not, a check should have been sent before this date. Your explanation or check, therefore, will be looked for by return mail. "This is putting the matter squarely up to the debtor; and, to my mind, there is absolutely no excuse for his not answering. Twenty-five letters like this one obtained twenty-three answers — seventeen of which contained checks. "If the fault is not ours, I do not so inform him in a short and sharp answer and consider the matter settled. I try to help him find where the trouble lies, and 12 PLAN ONE straighten out his difficulty. This costs very little, and I find it wins the lasting friendship of customers. "If the complaint is due to a misunderstanding upon the part of the customer, I try to point it out to him in a courteous letter — ^usually a long one — always endeavor- ing to word it so that there will be no arousing antag- onism. "If, however, the customer has a real grievance, I first ask him what he feels we should do to make matters right. Most men have a sense of reasonableness in them, and if they see we are willing to listen to their side of the story they will be fair. "If a customer's proposition is what I consider more than he should ask of us, I meet him in it as far as I consider consistent with squareness all around and try to make him see our side of the story. The average man can and will recognize a fair proposition. And experience has taught me that if we do not attempt to force him by argument into our way of thinking, but offer him a fair compromise and ask him to consider it, he will almost always see things as we wish him to. It always pays to meet the debtor half way. "My experience shows that it is best to avoid argu- ment wherever possible. Be courteous, helpful in sug- gestions, listen to the other man's story, and consider what he has to say; and always remember a good com- plaint letter is largely a matter of tone and attitude. "In adjusting complaints, I handle them just as quicHy as possible, so as not to have the account held up indefinitely. As soon as matters are straightened out, I asked for the money in the usual way. If my 'put-it-up-to-'em' letter does not bring results, my next step is to send a letter to threaten suit. This letter will be found in Plan 66." PLAN TWO 13 PLAN NO. 2 THESE TWO LETTERS BROKE ALL RECORDS All who direct the collection of money know that some debtors must he handled with gloves while with others "rough shod" methods are more suocessfid. This 'plan shows how one concern fits its appeal to particular characteristics and thereby breaks records. "I have found that no single plan will work with all classes of debtors," says one credit man. "Of course we treat them all alike at the start, but it doesn't take very long before a large number of them classify them- selves. "After they have placed themselves in the 'slow pay' or 'dead beat' class, we often find it successful to write them a letter and mince no words. Sometimes we appeal to their pride ; sometimes to their sense of justice ; and then again we try to make them realize that they are only injuring themselves by their dilatory tactics. "One of the best examples of an appeal to their sense of justice is this letter: "Deliberately unfriendly" -- that's what we think of the way you are treating us. Why don't you pay? You know we can't break even on our transaction with you if we have to keep on writing letters. You know, too, that we have given you your money's worth. That's our principle — small sales, big values, satisfied customers, prompt pasrments . Some others don't follow this system. They are the ones who deserve trouble. We don't. Come now, are we not right? Encour- age our policy by paying up. 14 FLAN TWO "If this letter brings no return, we follow it up with one like this : You are doing yourself a great injury. You made a purchase from us some months ago, on the instalment plan, and you have not fulfilled your obligation. This hurts you far more than it hurts us. In selling, we naturally make an allow- ance to cover bad debts. You are ap- parently bad credit. We shall therefore add your name to the list which is kept by a number of houses and which is consulted by them all whenever a new order comes in. Thus, by failing to pay your account, you are destroying your credit. This letter is written in the friend- liest spirit. We are obliged to judge a customer by an experience with him and then act accordingly. But we don't want to make a mistake. Hence this letter. If you care about your credit you will doubtless reply. If not, the loss is more yours than ours, and in you will go to that list of in- discriminate persons whose promises are mere "scraps of paper". ' ' These two letters have been very successful — ^in fact, on one mailing they broke all previous records in the amount of money collected. We have different letters for different occasions, but they are all along the same general lines and I have always found that it pays to be courteous, but straightforward." PLAN THREE 15 PLAN NO. 3 THE "CASH AND CARRY" PLAN Hots a PhUadelpkia merchant reduoed hia credit accounts matericUy and succeeded in placing his business on a sounder footing is fully explained in this plan — he says it "practicaUy eliminated" all his collection troubles. You'll quickly see that whatever line you are in, you can probMy adopt some good points from his idea, "YeEir after year," begins a well-known Philadelphia merchant, "I saw the cost of doing business mount higher and higher until it reached a point where it demanded most careful treatment. The amount of money outstanding in credit stocks and the cost of not only carrying these accounts, but also making the col- lections, was the handicap that prevented me from making the rate of turnover that my investment and my volume of business entitled me to make. Delivery charges also were getting higher every day, so I decided to adopt a plan that would remedy not only one, but all of these troubles. "I could not come out flat-footed with the demand that my customers pay cash. They are responsible peo- ple and would have resented such a step. But I could sell them goods cheaper if they paid cash and carried the goods home themselves, so I told them so frankly. Here is the circular letter I used very successfully : We have adopted a new system of sell- ing groceries and meats knonm as the "Cash and Carry Plan". Under this new plan we can sell the same high grade groceries and meats that we now handle at a very material reduction in our present prices. Here is the plan: 1. Every article in our store is plainly marked at the very lowest cash 16 PLAN THREE price. The price is for those of our cus- tomers who come to the store, pay cash for the articles and carry them home. 2. For those who desire, we have an efficient delivery system. Auto trucks will leave our store promptly at 9a. m., 2:30 p. m. and 4:30 p. m. For this serv- ice we make a nominal charge of 5 cents for each order, regardless of size. 3. We will continue charge accounts to customers who are entitled to them, and for this service we will make a charge of one cent for each dollar or fraction thereof. In other words, you pay for Just what you get. Let us show you how it works out by comparing a few prices under the old and the new system. First, compare a list of the prices to consumers who pay cash for the goods and carry them home. Old New System System Price Price 4 bars American Family Soap.. $0.20 $0.16 1 lb. best coffee 35 .32 1 pkg. Quaker Oats 10 .08 1 lb. best head rice 11 .08 5 lbs. sugar 43 .38 Best sirloin steak (lb.) 30 .26 $1.49 $1.28 Second, we will show you the prices to ♦be customers who ask for delivery, but pay for the goods at the store. PLAN THREE 17 Old Nev System System Price Price 4 bars American Family Soap.. 10. 20 $0.16 1 lb. best coffee 35 .32 1 pkg. Quaker Oats 10 .08 1 lb. best head rice 11 .08 5 lbs. sugar 43 .38 Best sirloin steak (lb.) 30 .26 $1.49 $1.28 Delivery charge 05 $1.33 Third, study these prices which will be paid by customer who pays for both delivery and a charge account. Old New System System Price Price 4 bars American Family Soap . . $0 . 20 $0 . 16 1 lb. best coffee 35 .32 1 pkg. Quaker Oats 10 .08 1 lb. best head rice 11 .08 5 lbs. sugar 43 .38 Best sirloin steak (lb.) 30 .26 $1.49 $1.28 Delivery charge 05 Credit charge (one cent for each dollar or fraction of a dollar) 02 $1.35 Please note the above examples care- fully. This new plan not only saves money for the customer coming to this store and carrying the goods home, but also for the customer desiring the goods charged and de- livered, as heretofore. 18 PLAN FOUR PLAN NO. 4 THE MERITS OF THIS PLAN HAVE BEEN PROVED You tmll find thai there is an exceptionally interesting background to this plan: A Wisconsin concern was in a bad way because its credit accounts were smothering it. This plan was worked out and now "losses with its, due to bad debts, are no longer the serious menace that they were." ' ' Collections have been reduced to a standard routine in my office, ' ' says a Wisconsin business man. ' ' Detailed instructions are now written out for the guidance of all employees concerned in handling the accounts, and the iiles have been thoroughly reorganized. Now accounts are paid more promptly and I am able at all times to know the exact status of overdue accounts, their amount, and the stage they have reached in the process of collection. "My business outgrew the one man stage several years ago, and in the wake of expansion came an increase in the amount of outstanding book accounts that was much more rapid than the increase in turn- over seemed to necessitate. "I made an earnest effort to cope with the situation, but my own time was fully occupied with current work, and with no fixed routine to follow, employees were lax in handling delinquents. "The evUs of this poor organization were quickly apparent in the rapid increase in outstanding accounts. Customers soon made it a habit to take as long credit as they chose; in fact, the situation grew so acute that complete reorganization finally became imperative. "The general principle behind my reorganized plan is this : Each account that is more than a certain num- ber of weeks old — a period which is called the standard of credit — is reported to a collector, and for that pur- PLAN FOUR 19 pose is entered upon a special card and filed alphabet- ically. "A second card is prepared, showing the name of the debtor and the date when his obligation was incurred. This memorandum card is filed in a separate drawer, behind a guide card showing the day of the month when the proposition should next be brought up for attention. "There is still another set of drawers, which com- pletes the filing system. In these last drawers, complete information on specific eases is kept. This file grows with each new overdue account, and gradually comes to form a useful record of all debtors who have given the concern trouble about collections. It also becomes an invaluable source of information for the credit man. "This office mechanism is supplemented by two sets of instructions issued for the office workers. One is written for collectors, and the other for the ledger clerks. Instructions for the guidance of collectors are as follows : (1) Each ledger clerk, when reporting an old debt to the collector, will furnish a statement and will enter particulars upon a card, which will be filed alphabetic- ally. A note wiU be made in pencil in the debtor's ledger account to the effect that the debt is ia the hands of the collector. A second card will also be written out bearing the debtor's name and the date when the debt was incurred; this will be placed in the diary drawer in the division for the current day. "When any sum is received on account, the amount must be written on the debtor's alphabetical card by the ledger clerk. "This makes it necessary for the collector to deal each day only with those debtors whose memoranda are on the cards in the divisions in the second drawer referring to that day. 20 PLAN FOUR "As each case is dealt with, a note to the effect is made in ink on the card in the first drawer, and the date when the next application for payment should be made is also entered in ink. The memorandum card is then placed forward under the proper day in the follow-up file. (2) "When from any pressure of work any card in the follow-up file cannot be dealt with on the proper day, it must be put ahead to the next. Under no cir- cumstances may it be put forward more than a single day. (3) Monthly statements of debts that have oeen placed in a collector's hands are made out and handed to him. When he receives his statements, he should at once look through the card cabinet to find the records corresponding with his statements; and he should dic- tate suitable letters to the various debtors, or mark upon each statement in pencil the number of one of the series of letters used in soliciting payments. The statements should then be handed to a typist for copying. At the same time, particulars of the letter written to the debtor must be noted on the printed card, and the memorandum card in turn must be placed in the proper division to come up when the case is next to be attended to. The typist should look at the diary drawer each morning, write all letters not requiring special attention and put them before the collector for his signature. (4) When a debt is finally written off as irrecoverable, the card must be numbered Eind particulars entered in the bad debts register, in which will also be noted the authority from the audit department giving permission for writing the debt off. All correspondence connected with the collection is kept in alphabetical order in letter files separate from the general files. When a collection PLAN FOUB 21 is made or the account written off, the correspondence on the account is fastened together, numbered to cor- respond with the bad debts register, and filed for audit and credit purposes. The card covering the case is filed "dead" in, a drawer reserved for complete cases. (5) Unless there are special written instructions to the contrary, given by the manager, the time between each effort at collection must not exceed two weeks. Instructions issued for the benefit of the ledger clerks are copied in the ledgers. They are as follows : (1) No debts are to be reported to the collector verbally. (2) When any debt becomes overdue, the word col- lector is to be written in pencil in the ledger, close under the items overdue. At the same time, two cards are to be written out — a printed card bearing full par- ticulars, and a plain one bearing the name of the debtor and the date when the debt originated. The printed card is to be placed by the ledger clerk in the alpha- betical file. The second card is to be clipped to a state- ment and handed to the collector. (3) When any debtor whose account has been placed in a collector's hands remits, the ledger clerk must at once note on the card, in the results column, the date and the amount paid; and he must also erase the word "collector" from the ledger page. (4) Monthly statements for those debtors' accounts marked "collector" are to be handed to the collector for immediate attention. "This ^stem makes it possible for me to maintain complete control of the collection machinery without bearing the burden of the many details incident to it. My sources of control are: (1) The alphabetical list of debtors, from which I can find out if there is much difference between the Z3 - rjLAisr irr-TE colunui for the intended date of the next letter and the actual date when the letter itself was written; (2) The follow-up or "diary" file, from which it is possible for me to see at a single glance approximately how many cards are iinattended to, and what proportion of debts have proved to be slow in collection or are particularly old; (3) The ledger in which all old accounts are marked "collector." "Complete lists of debts which have exceeded the standard of credit, sent in twice each year by my branch offices, make it a simple matter for the home office to control collections in branch offices as well as at home. The lists are prepared by junior clerks, who go straight through the alphabetical file and extract all details that are required for the report on the day following the close of each half year. "A few days later, I prepare a list of all old debts in regard to which special instructions are to be given the branch managers. Sometimes application for pay- ment is made direct from my office, if that method seems likely to bring in the money. ' ' PLAN NO. 5 A DESPERATE PLAN FOR SAVING ACCOUNTS AT THE LAST MOMENT There is no doubt that this plan is simple to use, but it does nobody the slightest harm, and doubtUss often pre- vents a lot of hard feeling, so who's to condemn it? "When the pasWue statement and the follow-up letter fail to prove effective, unusual tactics will often bring in the money. A method that has proved especially effective in occasional cases is used by a selling agency fo'- a manufacturer. The local manager is notified, PLAN FIVE for example, that a certain customer is badly delinquent and owes for two shipments one hundred and twenty days overdue. This customer persistently declines to honor drafts and ignores all letters. The home office has lost patience and advises placing the account in the hands of their attorneys. Knowing the offending customer well, and believing him to be chronically slow rather than wilfully dis- honest, the agent urges a delay of a few days, as he hopes to get a check in full. He then writes the cus- tomer frankly and plainly, but at the same time in a friendly tone, and attributes the tardiness to oversight rather than to any other motive. This letter, however, brings no response, nor does an urgent telegram sent a week later. The home office, now thoroughly exasperated, writes that it can give no fur- ther extension of time and that prompt legal action must be taken. Vexatious delays generally attend upon legal pro- cedure of this kind, and the local manager decides to make an appeal to a side of the customer's nature that could not be reached by direct methods. He dictates this letter to the home office : I have just read your decision to take legal action immediately against Jackson. I feel that you are justified, yet I am amazed at his present attitude. As you are aware, I have known him favor- ably for many years and considered him a good risk, especially because of his envi- able connections throughout the State. He comes of a well-thought of family, too, which has had a reputation for meeting its obligations fairly and squarely. Evidently, however, he has departed from this tradition for honest dealing a.M 24 PLAN SIX no longer deserves the slightest con- sideration. There is only one step to take with a debtor who acts as he has and places no value on his reputation - and that is "go the limit to get our money." I am through. Let the attorneys proceed at once to col- lect the account. Mistakes in mailing departments are not entirely unknown. Taking advantage of this fact, the local man, instead of mailing his letter to the home ofiSce, puts it in an envelope addressed to the delinquent customer. The method is often entirely effective, and the local manager at times receives letters by return mail from customers, stating that they have sent cheeks in full to the home office, and giving every assurance that the failures to do so earlier were "simply oversights." PLAN NO. 6 THIS "CLOSED ACCOUNT" PLAN BROUGHT DEBTORS IN TO TALK— AND PAY In some cases letters brought few results far the credit manager of a middle western concern. He didn't want to lose his customers, but he had to have the money. So he used a little strategy, as this plan shows, and he got it. "So successful was this plan," says this credit man- ager, "that it has come to be one of the most valuable assets of our collection department." When a customer's delinquency reaches a certain point, a personal talk in the credit man's office will often accomplish more than any number of letters. For this reason a ruse— certainly justifiable under the circum- stances — is sometimes employed solely for the purpose of getting the buyer in. PLAN SIX 25 You have no doubt run into the puzzling question of deciding just what to do when charge-account customers — with the money to pay promptly — insist on letting their accounts drag way behind, hut go right on buying. Bead Plans 6 and 74 and you viiU see how two business men use a "close-account" plan for just such cases. A woman whose account is considerably past due, and who has failed to respond to two or three letters, comes in and buys a small bill of goods, for example. The ticket goes up to the credit department and comes back with the report that the account has been closed. Immediately she becomes indignant. This is the cue for the floor walker's entrance. He suggests at once that she go personally and see the credit man — ^no doubt there is some mistake — and straighten it out.. She goes — and the credit man gets the opportunity for the sake of which the ruse has been used. It is his turn to protest now — and to apologize. The account seems to have been closed two weeks before — evidently at her request. It was somewhat overdue — he had supposed of course that possibly she wanted to refrain from fur- ther buying until she had caught up, or that she had had some other reason. But it was a mistake. It would be reopened at once and today's purchase passed. Before the customer leaves the office, however, she has found herself making a definite promise of paying up the back account at some specific date — ^which, after all, was the aim of the credit man. 26 PLAN SEVEN PLAN NO. 7 THIS roEA MAY BE NEW TO YOU // is true that this involves a ruse — but one that's quite gentle and which under the circumstances is fair enough. for it certainly does not do anyone a bit of harm. "My banker helped me discover the best way to collect slow accounts," says an Iowa dealer. "It came about this way: I carried a large account for a con- tractor who was very slow pay, until finally, when I could not get even a small payment on account, I was obliged to cut off his credit. This man wanted to pay all right, but he was a poor manager and coidd not get the money together. "I finally put it up to him. 'Why,' I said, 'you ought to pay me this money even if you go to the bank and borrow.' 'I'd gladly do that,' he replied, 'but my credit at the bank is used up. If they would take a chattel mortgage I could raise the money for you, but they are not loaning on chattels just now.' "I chanced to mention the situation to my banker. He said: 'Send Jackson to the bank. Tell him that you have influence with me, and that you think I might take a chattel mortgage if you are to get the money. Then I will require you to indorse the note — ^but he need not know that. He'll think he has settled with you, and I'll collect where you could not. That's cer- tainly justifiable in a case like this. The queer angle to a lot of men is that they respect a bank a great deal. ' "I acted on the suggestion and 'backed' the note. The contractor thought he was liable to the bank, met the interest punctually, and took up the note on maturity. "Now when I get notes from a man, instead of hold- ing them myself, I discount them and let the debtor PLAN EIGHT 27 think I have sold them outright. I feel quite justified in doing that. In nearly every case the bank has been able to collect, but I am sure that I would not have obtained a cent on some of these accounts, if I had carried them myself, or if the debtors had realized that my indorsement rendered me liable, if they failed to pay." PLAN NO. 8 THIS PLAN PROVES THAT AT TIMES YOUR COLLECTOR MAY BE AT FAULT With this plan a salesman not only got the cash on a long standing account, but also reopened the way for additional business. In a Maine city that can here go by the name of Pipe- stone, the "Herald" is the larger of two morning papers. It has a bigger and better subscription list than its rival, the "Telegraph," and it carries more advertising. Frank Kingman joined the staff of advertising salesmen on the "Herald," and on the first day he went out to line up his customers and prospects he found that he had in his territory an auction warehouseman — Adams by name — who was constantly using a large amount of space in the "Telegraph" and in the single evening daily, but no space at all in the "Herald." Kingman wondered why and investigated. He found that there was outstanding against Adams an account that had been long overdue, although it was known that his credit was perfectly good. The collector had given up all hope of collecting the debt. He said that the warehouseman had a grudge against the "Herald," and that it was useless for a representative of that paper to call on him. Kingman, however, realized that until the debt was collected it would be impossible to sell Adams any more advertising. 28 PLAN EIGHT "Let me collect the account," said Kingman finally. The collector laughed at him and told how he had spent hours cooling his heels in Adams' outer office, all to no effect. Kingman persisted, and finally the col- lector turned over his responsibility in the matter to the salesman. Kingman went straight to Adams and to the point, talking frankly in the way he conceived the warehouse- man himself was used to talking. "Mr. Adams," he said, "somewhere my paper has fallen down. You aren't refusing to pay this account because you want to keep the money. We know your credit is perfectly good. Now I am a new man in this territory and I don't know what's happened here before my time. But I want to start in with a clean slate and I want to keep it clean. If there's anything wrong with the 'Herald,' or the way 'Herald' people have treated you, let me know and I'll do my level best to make it right with you from now on." Adams liked the frank way the salesman came at him, and he made his explanation just as frankly. He said the collector was at fault. The collector had come twice to collect the bill and both times Adams had been out. Consequently, the check was not signed. A third time the collector came while Adams was busy in his private office talking to a customer. The office partition was thin, and the collector's expostulations with the cashier about being compelled to wait were plainly heard by both Adams' and his customer. "It's the third time I've been here after that money," Adams quoted the collector as saying, "and if I don't get it this time we will find another way of collecting it. ' ' "Naturally you were insulted," exclaimed Kingman. "In front of a customer or not, that is no way for a col- lector to approach a client." PLAN NINE "That's what I thought," returned the warehouse- man. He reached for a blank check. "By the way, how much was that bill ? ' ' "Now, Mr. Adams," asked Kingman as he put the cheek in his bill-fold, "how much space are you going to need in the 'Herald'?" PLAN NO. 9 "NOTHING EVER EQUALLED MY BALLOT PLAN" THIS MAN SAYS By meana of this "ballot" plan a merchant in Ohio not only writes requesting payment, but also frames the cus- tomers' reply. He has found it very effective in pinning down delinquents to definite promises. "It is always difficult to get slow-pay customers to commit themselves on the question of payment," says a supply dealer in Ohio. "No matter how specifically you may frame your letter, they will almost invariably offer excuses to dodge the real issue. "This became such a serious handicap to our collection department that I cast about for a remedyx I finally hit upon what I call the 'ballot' plan, because it is worked but along the line of the ordinary election ballot. I have found it the most effective and profitable method of pinning down a slow-paying customer to a definite promise to pay that I have ever used. "It even relieves the customer of the trouble of writing a letter. All he is required to do is to mark this 'ballot' the same way he does at election time. "You will note that the first five reasons are the cus- tomary excuses debtors give as to why they haven't paid their bills. These were included in order that the ballot might not be too severe on the customer who really had a good excuse. PLAN TEN "Each of the last four is a definite promise to pay at a definite time or by a definite method. All the customer has to do is to fill out the ballot and sign his name." WE WANT TO BE FAIR. SO DO YOU Don't bother to write a letter — ^just "VOTE" on this sheet; date, sign and return it in the enclosed stamped envelope NOW CONFIDENTIAL Date Gentlemen: We indicate below by a cross-mark our reason for not having paid our account with you of $125.10. — Oversight — Error or overcharge — Disagreement as to price or terms — Slow collections — Unsatisfactory sales — We enclose $ — Will remit in days — Will honor draft through Bank of — Request days extension of credit according to signed acceptance herewith (sign below). Remarks: PLAN NO. 10 THE "CALL ON THE 'PHONE" PLAN You vxruld think that a tdephone call abotU the standing of his account would irritate the average customer. But nevertheless a merchant says this plan works. Slow accounts are followed up on the telephone by a Wisconsin merchant in an affable but persistent way. After two ov three statements have been sent out with- out getting results, he caUs the customer on the tele- phone and tactfuUy explains that while he knows the PLAN ELEVEN 31 debtor will pay, he cannot afford to spend so much time collecting, and is afraid he will have to decline credit to the family unless the bill is eared for at once. He has found that most people are not annoyed at being tactfully called over the telephone about their bills. On the contrary, he often learns about extenu- ating circumstances, and is glad to wait for his money in order to keep the trade of the customer. "I used to send one of the men out to make collec- tions," he says, "but I find I can do better by talking to people myself. I am better able to judge what the conditions are. Even my most ui^ent appeal for money is very pleasant. A man need not be cross to insist that what is due him shall be paid, and I know I have made many of my debtors better customers as the result of collection conversations over the telephone." PLAN NO. 11 PERHAPS THIS IS JUST THE "MINUTE- SAVER" YOU WANT Of course it's only a detail but a minute saved on this account, and another on that, leaves just so much more time for other things. A credit man in Omaha improved on his follow-up system by using a vertical correspondence file with alphabetical guides. When he puts away the corre- spondence about a case he files it behind the proper guide and numbers it in blue pencil on the upper left- hand comer according to the order in which it is filed. If the Jones Mercantile Company is to be written on March 16th, and there are already ten bunches of cor- respondence in the "J" section of the file, he numbers the Jones Mercantile bunch "11" and on the March 16th leaf of the calendar pad jots down " Jll." 32 PLAN TWELVE An Iowa business man had several slow pay accounts. He went to his hanker for advice. "I'll collect where you can't," said the banker, and proceeded to outline a plan which the business man says turned out to be the best method of handling slow accounts he ever used. You wiU find this banker's suggestion in Plan 7. PLAN NO. 12 A QUESTION MARK AND INITIALS IS ALL THIS PLAN REQUIRED 7n nine cases out of every ten, aUomng customers to over- step credit limits means trouble. This plan shows how an eastern collection manager gets around this very nicely vnthout as much as writing a letter. An eastern collection manager adopted a novel and effective way to keep the line of credit down to the agreed amount, and at the same time to ask for a remit- tance without giving offense. When an account exceeded the amount agreed upon, the bookkeeper was instructed to make out a statement, and the collection man simply wrote on it a question mark adding his initials, and mailed the statement to the delinquent. Generally it brought a prompt response in the form of a remittance sufficient to bring the account within its limit. In this way, the risk of giving offense by a formal letter, no matter how cautiously phrased, was. avoided — and the results were better. PLAN THIRTEEN 33 PLAN NO. 13 THI& PLAN PUTS A STRONG "PERSUADER" BEHIND THE THREADBARE ADMONITION —"PAY BEFORE IT'S TOO LATE" Sometimes even a fairly hardened debtor can be made to listeh. to reason when it is suggested that the methods to be used against him won't add to his credit stand- ing in hit community. Perhaps that's why the fol- lowing pla^i has been successful. Practically evbryone likes to stand well in his own community, and often a debtor will pay rather than be shown up as a "dead beat. ' ' An eastern office appliance house has found that a reminder of the possible loss of credit standing will often bestir even the slowest of debtors into paying up an account, provided the right sort of letter is used. This house feels that a better of this type should not be sent until all other means of getting the money have been exhausted. This means that it goes to only such debtors as have by their own actions placed themselves in the "dead beat" class. Here is the letter which this concern sends out. We have placed with o\,f attorneys. Barker & Barker, 433 Main Street, this city, for collection, a claiiin against you. This claim has been assigned to them with the understanding that we will prosecute unless settlement is made at once. This would not only make you considerable trouble and costs, but place you in an embarrassing position as well. We granted you credit on your signed order, purely on your word of honor, shipped the goods and you accepted them. We have written you many letters appealing to your sense of honesty, without result. Evi- 34 PLAN FOURTEEN dently you do not realize your position. While your action might be considered of the deliberate "dead beat" variety we have felt that your failure to pay has per- haps been due to carelessness or to the fact that you do not realize the distinc- tion between mere delinquency and deliber- ately unfair tactics, and so we have hesi- tated to drag the matter into court, where your credit standing certainly would suffer. Before taking decisive action, we now give you a final opportunity to settle this claim without costs or trouble. It will not alter your case in any way to attempt to return the goods now. The matter is assigned for collection and payment must be made direct to our attorneys at the address mentioned above. We expect to hear from you within three days — otherwise we shall take it for granted that you are prepared to defend this action, and our attorneys will there- fore take steps to protect us in any way they may see fit. If this letter gets no reply this company usually sends a man to call on the delinquent, to determine finally whether it will be necessary to file suit to force the debtor to pay. While, of course, the plan is a little severe in some instances, as a whole it works out well, according to the collection managers. PLAN NO. 14 ANOTHER PLAN WITH A HARD TASK This plan has about as hard a task as Plan 68, but nevertheless it has made good frequently enough to establish a repviation for itself. "It is, my experience that asking a delinquent for money can be made just as dignified and courteous as PLAN FOURTEEN 35 trying to sell him goods — and doing so keeps the cus- tomer in a friendly attitude. A grouchy credit man may, in one letter, lose to a house the business it has been years in developing," says one credit manager. "Here is the letter we send to a customer who has sent in another order after he has overstepped his credit limit." After careful consideration of your recent letter we are sorry to inform you that vre have decided to hold back the order. We regret this, I assure you, quite as much as you do, but our unalterable rule leaves us no alternative. We do not in the least like to lose your account, and we sincerely trust we may, in the near future, come to some agree- able understanding. It is to be hoped that you will soon be in a position to clear up the outstanding balances against you. Our action with regard to your case is to be especially regretted owing to the lateness of the year. We still feel you will be best served if you send us $62.14 and let the shipment go forward. We say this because we realize what it means to go into the open market at this season. Please let us hear from you at once, as we are badly off for storage space and in a few days we will be compelled to unpack your goods and put them back into stock, unless we get word from you. "This is in reality a collection letter aimed primarily to get the money; by deftly suggesting to the merchant how hard it would be for him to go into the open mar- ket, and the fact is driven home that he can not hope to have his order filled without a substantial payment 36 PLAN FIFTEEN on accotint, for he is assured that the shipment will be unpacked unless he writes soon. It is a blending of collecting and selling, and while it may hurt, it gives the necessary prod to an easy-going merchant, and shows him that he cannot expect continued credit unless he looks more diligently to the payment of his bills. PLAN NO. 15 A YELLOW STICKER, A BLUE PENCIL, RED INK, AND SIX WORDS— THAT'S ALL This plan ia like a lot of others, you'll find, except for one ckaracteristic — and thereby arises the expUmaUon of the results it secures, perhaps. "I long ago stopped scolding debtors or doing any- thing to irritate them, but I always let them know that their manner of paying is under constant scrutiny — and I manage to do it in a way that leaves no bad effects." These are the ideas of a successful Kentucky credit manager who says that as a result of using them, his annual losses from bad debts for seven years have aver- aged under one fifteenth of one per cent of the sales. His plan is very simple. It consists of attaching a small yellow sticker to statements of past due accounts. The sticker, printed in red, reads as follows : DAYS PAST DUE- KINDLY REMIT PROMPTLY The number of days is filled in, with a blue pencil, to fit each case. It is this blue pencil notation which elim.- inates the cold formality of the more stereotyped forms of this same idea, and creates a personal point of con- tact which the debtor cannot help but recognize. This credit man says that he uses this form exclusively. PLAN SEVENTEEN 37 PLAN NO. 16 THIS PLAN MADE IT EASIER TO PAY THAN TO FRAME AN EXCUSE This plan shows how an Omaha collector successfully knocks out the "too busy today" excuse. His method is certainly simple enough and could be used in almost every kind of business. Make it as easy as possible for bui^ men to pay their bills, is the policy of a successful collector in Omaha. He takes advantage of the psychological fact that every man will follow the course of least resistance. He accordingly provides himself with neatly type- written checks for the exact amounts of the accounts the busiest men on his list owe. These checks are drawn on his customers* own banks, and are written with a check writer so that the figures are clearly unalterable. Busy men, this collector states, find time to sign the check he presents when they would not feel justified in going back to their desks and making out checks of their own. It is often easier to sign than to frame an excuse, or ask the collector to call again. The customer can, balance his check stub at his convenience, using the receipted bill as a memorandum. PLAN NO. 17 A PLAN ESPECIALLY DESIGNED TO HANDLE OLD ACCOUNTS This man shows how the credit plan he first used failed, and why, and then describes the successful plan with which he replaced it. "Make it easy for your delinquents to pay," says a merchant in North Dakota, "and you make it easy to collect old accounts. During my first few years in busi- ness, it seemed as though I couldn't do anything with 38 PLAN EIGHTEEN the accounts that slipped over the line into the slow- pay class. Finally I saw why. It was simply because I was making it hard for the delinquents to pay. "One man who had fallen behind because of sickness owed me $25. I knew that $25 in one payment was out of the question, but I felt that he could and would pay a dollar a week. The scheme worked so well that I tried it with others, explaining my willingness to be lenient and asking for the doUar or two dollars that I felt could be spared. By urging them not to wait until they could square up the whole amount, I commenced to get results, slowly but surely. In fact, instalment collections have had more to do with my success in cleaning up old accounts than all other factors combined. They make it easy for the delinquent to pay." PLAN NO. 18 THIS "COIN CARD" PLAN BRINGS IN 90% OF THE SMALL ACCOUNTS IT GOES AFTER One of the most progressive houses oj its kind in the country zises this plan on all accounts below $1.10, and it handles hundreds each month. The idea brings in the cash on over 90% of them. A Chicago house has hundreds of small accounts. To carry them from month to month would cause a tre- mendous amount of detail. Many of the amounts are for less than a dollar, and to insist on a check for so small amount might appear unreasonable. To get around this the credit department encloses a coin card in the envelope with the statement, and a card stating that "Since the amount is so small, it may be found more convenient to use the enclosed coin card than to write out a cheek." PLAN NINETEEN Space is provided on the front of the flap for the customer's name and the amount enclosed. "This is the most successful plan we have found for handling smaU accounts," says the collection manager. "It brings results on more than 90 per cent of the accounts so biUed. "We have had practically no com- plaint about money being lost in the mails, and it is by far our cheapest method for handling small amounts." PLAN NO. 19 WHEN COURTESY FAILS THIS LETTER MAY HELP After two courteous letters fail to get action, the dealer mentioned in Plan 78 sends this one. It usually makes good. After the dealer mentioned in the Plans 77 and 78 has sent two courteous letters without getting results, he capitalizes the fact that the debtor is under obligations to the firm, sending him this letter : Certainly it is most unusual to give your definite and distinct promise to pay and then allov your instalments to become long past due without making any endeavor to take care of them. We relied upon your word. Would it not be fair to at least tell us if there is some reason why these payments cannot be met as agreed? Kindly let us hear from you immediately. "When such a letter gets no action," says the dealer, "there is only one alternative left — ^to start procedure toward immediate collection of the entire amount still due on the purchase. Liberty to do this is usually pro- vided in instalment contracts — that is, if two instal- ments become overdue, the firm may demand either the 40 PLAN TWENTY return of the goods or payment of the whole remaining purchase price. Naturally the realization of the second provision is the one most to be desired. ' ' He then pro- ceeds as explained in Plans 77 and 78. PLAN NO. 20 HERE'S A FORCEFUL REMINDER WITH A PAPER "THANK YOU" SMILE One credit manager believes thai he can always do more with debtors by smiling at them than by nagging or criticis- ing them. Even when they are far behind in their pay- ments he sends these " Thank You" receipts. One firm handling thousands of accounts, encloses with the receipt the following courteously worded little slip, neatly printed, when payments are delayed: THANK YOU BUT WON'T YOU PLEASE SEND US YOUR PAYMENTS REGULAELY? YOUR NEGLECT TO DO SO NECESSITATES OUR HAVING TO RE- MIND YOU:— DISTASTEFUL TO BOTH OF US. WE SHALL CONFIDENTLY EXPECT YOUR REMITTANCE ON THE FIRST OF EVERY MONTH HEREAFTER. Another firm sends out the following letter under similar circumstances: WE THANK YOU For your remittance of $11.00, and for the honesty of purpose shown in wanting to pay the account. It is very annoying, however, to have to remind you so often regarding the pay- ments. Please be more prompt and save both of us annoyance. PLAN TWENTY-ONE 41 PLAN NO. 21 A FEW TIPS ON AN IMPORTANT SUBJECT A St. Paul business man tells how he eliminates the objectionable features of the sight draft by using this plan, which he declares has secured very attractive results. "Sight drafts often offend the debtor," says a St. Paul merchant. "He may feel that he is beiag singled out. I never draw on a customer without giving notice, stiU I make it a point not to give a customer the oppor- tunity to say that he is not getting the same treament as other customers. I make the notice as general as possible. Following is a paragraph I use with much success : Our small -account list runs rapidly into "big money" — when these small items total $5,000, according to our custom of years' standing we draw upon the customers on the list. Therefore we have drawn upon you for 131.00. "Another paragraph of the same type is: If we can get all our small accounts in on presenting drafts for them, we can offer you a genuine bargain next month, for we would then be able to make a cash pur- chase of a line that would metke you a profit of about 40%. That's why we bother you with this small account. Watch our bargain list next month. We are drawing on you for $31.00. "This method gets results for us. When the debtor who is drawn on can be made to lose the feeling that the creditor is after his 'pound of flesh, ' and is shown that a legitimate reason for the action exists, he is much more apt to make a special effort to pay up." 42 PLAN TWENTY-ONE Department for the Collection OF Slow Debts 251 Ninth Avenue J. B. POWERS t nviialB E(MU«r. Jr., Clirton Aputsanta, Mty. r Slrr Wb; hBVa jaa landed la thiB dspu-tmntf Ton kBO*, BTsiy tlas I am glrsn a batch of aeooBnta to eol- l«ct, I alwaya find » gnat Bftny oaa«a of pl&ln orarslght, or eu«- laaaaaaa, or coo^lalnta tbaX havAn't b««n pnporlf adjiutad. Plflus baar la Bind that U PIBST JOB la Co ADJUST 10 YOm BRnS 31TI3FACTI0I1 IDT HtD^ COUraAIRT. IQF aoqwny euaraataaa ••Cla fact Ion, Vo oxpoct oqoally fair traatoant. too. So plaaaa vrlta u now. If you l»v9 a ootpplalat to ^Uc*, atata It, and I'll aea that It la aada rl^t, Knowing that ym will this pa; your aoooant. If St haa boon ■arelj oranl^t on your part, Joat mail hack thia latter vltb your ramltta&oa and I'll know your aoooant raallj lbaloiV[< 'Ith our "good pay** eaatoaon. tD ap avaat, writ*, OD niTE lOV. Yonr balanoa la |2.00. Taiy tnily yoors. yr auatar. ALTHOUGH WE START GENTLY— Who would guess that this "gentle" letter was to be followed in due course by the "calamity letter" on the opposite page? But then it may be wise, as many feel, to start a long way from the climax you really have in mind. Did you notice the "sledge-hammer" letterhead? PLAN TWENTY-ONE 43 Department for the Collection OF Slow Debts 25t Ninth Avenue J. B. POWERS Pt. 0. R. HlddletDB, 119 Laxiogton St. Cltj. You ow« ne iDonB; — anTt'ii evQe-KKatr £9 a9 Hard m 1 oaa. Tou thoaeht It WM Jtut to ny flm tbat rou owed aonay, tut yca'T* vrong. Yim oTC it to tha little stenographer who sd s Job hen to help support her faolly. You ova it to the wldoved ootber who worke Iiare — the only br«ad-«lsser sow for her briMd. Yott owe it to ae — « young ama trying to male* tor blnaelf a plaoa la thla baalneaa and vho la kept from eaooeedlng beoauae TOUR debt, and tha debta of other negleotfol ouatonera, atand asainat hlr Moord. You eira It to -■ »t,7^ ao<..;l~-,~~.^ Platn rnll Date Paidta Credit Balancg Debits Btl) 2. s M^^, ftf '5 oo 1 -z. 7 Oit.A. «lVi-^ /^ so 3 on 2 ^.u^tMuu^ .zl^c^r;. 3 f, yhJS- i /z -i 1 iiU~^ .? dp ^ ~ 3 / 4 5 ~~ 6 7 SA ~ ~ SB 1 Dale Paid to Credit Balance .Debits Date Dunning Notes // / yx-/ A, <7(J ^ fl t Buslniss D Bank . SUM.M SUUmtnl Orders ipimeil O HOTt CDfTSfIt PMOW Month CUfTUlt Past Due <-> o •^v ^^ _ _ This safety first folder keeps ihe files clear of deed material for the credit man mentioned in Plan SS. Important papers are attached to the left flap of the folder with fasteners, while the ordinary papers — xuch as requests for payment and adjustment papers — are attached to the other flap arid destroyed at the end of six months. sent to the eustqmer. The credit man thus has before him on the face of the folder itself enough information to pass or reject most orders. For special eases further information is filed inside the folder. PLAN NO. 34 THE "PAY UP OR PLEAD GUILTY" PLAN Here's a collection letter with a sharp sting. A merchant sends it to what he caUs his "gone beyond recall" accounts, and often it brings in the money after many dunning letters have failed. A merchant in a fair-sized town in Indiana has a reputation for getting down to "brass tacks" quickly in aU his business dealings. His collection letters verify his reputation, for he's a man of few words, and less patience, .with the chronic delinquent. The letter which he sends after he has exhausted other means minces no words and sometimes gives offense, but he figures that the debtor is withholding money. PLAN THIRTY-FIVE Honest men pay their just debts. Dishonest men do not pay their juat debts. You ove me $10. IShioh are you? "I admit that, generally speaking, the rudeness ot this letter has more against than for it, ' ' says this mer- chant. "But in many cases it has gotten money I never expected to see, and sometimes customers came back to my store to trade when they kept religiously away be- fore the letter was sent out." PLAN NO. 35 THIS PLAN BRINGS BACK 80% OF THE "BACKSLIDERS" No doubt you've seen many an account go "by the boards" simply because the customer lost interest. To revive an account it is often only necessary to revive interest. This plan shows how a New Orleans business man does it, "The instalment customer who has lapsed on his pay- ments can often be brought back into the fold," says the manager of a New Orleans company. "Take the man who has started to pay on a lot and who has lapsed. Ten to one he wants to keep up his payments ; it 's just as good a chance that he values his prospective property more than ever, because he cannot continue to pay for it, "In instalment real estate sales, as, in fact, in any instalment business, there is a time when the instalments paid in do not equal the cost of getting the business. So, if the customer lapses and forfeits his payments, even then you are out. "At this point we are careful not to keep after the lapsed customer to the extent that he becomes sore on the project. We let him lapse and see that he is sent. 64 PLAN THIBTY-SIX not a continual line of duns, but our most forceful and interest-compelling advertising matter. Then in due time we notify him that, although he has forfeited past payments by not keeping them up, yet he may become reinstated by simply resuming his payments where he left off. "This is such an obviously fair proposal that eight out of every ten customers who have lapsed do come back into the fold when approached with this offer." PLAN NO. 36 AGAIN THE WRONG WAY AND THE RIGHT WAY This ■plan leaves no loop holes jot misunderstandings or disputes about either the amount or the date of discount. A dealer says he uses it effectively on all his statements. A dealer who allows his customers a discount for prompt payment formerly stamped the following notice on his bills: A DISCOUNT OP TWENTY-FIVE CENTS A TON ON DELIVERIES OF ONE TON OR MORE ALLOWED ON TfflS BILL IF PAID BY THE 15th OF THE MONTH FOLLOWING DELIVERY. That was plain enough he thought, but his customers would complain that they had not seen the discount notice, so he had a new rubber stamp made, which reads : IF PAID BY DEDUCT $ OTHERWISE NO ALLOWANCE WILL BE GIVEN. This is clear to all of his customers and it offers no opportunity for excuse or misunderstanding on the part of those who do not pay before the discount day. PLAN THIRTY-SEVEN 65 Warner had made a reputation as a "ship hunter." His manager called him into his office and said: "Find that man Booth. He owes everybody and nobody knows his whereabouts." How Warner found Booth and brought back secured notes for the account is in- teresting. You'll find all the details in Plan 69. PLAN NO. 37 A PLAN FOR MAKING THE LATE PAYMENT ISSUE VERY DEFINITE You, too, may have found that sixty or ninety day terms do not impress a very definite due date upon the mind of the average customer. Here is a plan used by one dealer fto meet this problem. "I had trouble with collections because buyers sold on thirty or sixty days' time, and often allowed seventy or ninety days to elapse before the money was paid," declares a Minnesota dealer. "This inconvenience was materially lessened by hav- ing due dates. Instead of selling on terms of thirty or sixty days, I emphasize a definite due date. "If I sold a bill of goods on the fourth of June, and the customer wanted sixty days, I would say, 'I will give you more than sixty days. I will call this bill due the seventh of August, and it will appear on the ledger 66 PLAN THIRTY-EIGHT in that way. ' The customer could not object to the extra time he was getting on his account, and it was impressed upon him that the bill was due on the seventh of August. While sixty days was a rather indistinct period, the seventh of August meant the seventh, and not the seven- teenth of August. I have invariably found the plan very successful." PLAN NO. 38 THIS PLAN SAVED MANY HUNDREDS OF DOLLARS Here you have credit cooperatimi worked out with a vengeance. Dead beats are weeded out, and Mr. Slow Pay is given to understand that he must either mend his ways or suffer the consequences. Interchange of credit experiences saves the merchants of a township in Illinois many hundreds of dollars annually. This desirable condition is entirely due to the effective organization of merchants and business men in the township. Before this organization was created, merchants of the half dozen towns in this vicinity used the same methods in extending credits that prevail in the majority of small towns. Each dealer traveled his own way and knew nothing about the experiences of his competitors. "When Mrs. Jackson, for example, requested the privi- lege of a charge account, the dealer had, besides her word, only such references as she cared to give ; and he relied on his own judgment as to her ability and will- ingness to meet her obligations. If she failed to pay, she soon transferred her trade to a competitor; and the original dealer usually sat down passively to watch Mrs. Jackson "sting" his rival. The two dealers failed to recognize in her a common enemy. PLAN THIRTY-EIGHT 67 They found, however, that the war against the ' ' dead beat" could not be waged suecessfuUy alone. The man who does not pay his debts relies on lack of organization among merchants to attain his ends. Competition of the sort that aims at a rival's throat is what permits him to prey first on one and then on another dealer, until he has gone the rounds of all. He dreads, above all, having his name listed "black" on an index that can be freely consulted by every merchant member. His past record stands plainly revealed, and the dealer who grants him a credit privilege does so with all danger signals up, and at his own risk. Merchants of this township now cooperate successfully against the "dead beat," and their experience proves they can do this, not only without injury to their indi- vidual businesses, but with positive benefits to them- selves. Their success suggests a way for the formation of similar organizations in other communities where the same need exists. The first problem faced by the organizers of this com- mercial association was to establish ratings for the credit buyers of the community. This was effected in the fol- lowing way : Each merchant went through his books and listed his credit customers, giving the name and address in every case. Then he placed a check mark beside each name, showing his experience with that customer. There were five classes : ' ' prompt, " " good, " " fair, " " slow, ' ' and "very poor." To save time in compiling the lists, these classes were designated respectively by the num- bers 1, 2, 3, 4 and 5. A "prompt" customer was one who made a practice of paying biUs within fifteen days after statements were pT3t in the mail. A "good" customer was one who was perfectly reliable, but usually paid from fifteen to thirty days after his bill was received. Still slower custom- PLAN THIRTY-NINE era — ^those who took often as long as a month and a half for paying — were rated "fair;" while those who took even longer than this and received, as a rale, several statements before they responded with the cash, were put in the "slow" class. Undesirable customers whose accounts were collected with great difficulty, if at aU, were rated "very poor." This original compilation by which merchants classi- fied their charge accounts caused considerable clerical work for each merchant, but under the new method the revisions, which take place twice yearly, are made by the secretary. Printed lists of credit buyers are now sent to members of the association. These contain over two thousand names. In making ratings, the merchant has only to run through his books, with the list at his side, and mark in the proper number opposite each name that he has on his books. The lists are printed in alphabetical order and extra space is left after each letter of the alphabet, which permits the merchant to write in any names that appear on his books that do not also appear in the printed list. How the secretary performs his duties is described in Plan 39, which follows PLAN NO. 39 THIS PLAN SHOWS HOW AN ASSOCIATION SECRETARY HANDLES CREDIT DETAILS One of the best featutes of the cooperative plan of handling credits, described in Plan No. 38, is the fact that merchants are not burdened with the many mirurr details usually incident to charge accounts. These are handled by a secretary as described in this plan. In a merchants' credit association the secretajy is the working center. He cards the credit information from the various merchants and holds himself ready to fur- PLAN THIRTY-NINE 69 nish any part of the information to any member, when- ever it is wanted. The card on which the secretary of an Illinois association sums up his information is shown in the illustration on page 71. At the top the buyer's name and address is writ- ten. Below is space in which to tabulate the records taken from members* reports for a period of eight years. The space devoted to each year is subdivided into two columns, captioned with the figures 1 and 2. In the first column is placed the information secured in the revision that takes place at the beginning of each year; and data from the second revision of the year go6s in the other column. On the reverse of the card, space is left for additional information, such as the buyer's salary, value of his homestead and the incumbrance on it. The card illustrated, represented as that of James Hawkins, shows how the secretary fills in this informa- tion. Running through his reports the secretary found at the beginning of 1918 that James Hawkins had three "Is" and two "2s" reported against his name; that is, three merchants reported him "prompt" and two reported him "good." According to the card, he main- tains this excellent credit record through 1919 and 1920, but at the beginning of 1921 his record is not so good. He now has two "fairs" posted against his name, and is carrying six charge accounts instead of five. The reason for this slump may be known to the secre- tary. There may, for example, be sickness in the family, which m^es it difficult for the head of the house to meet aU his bills on time. If this is true, and if the difSculty is in all probability merely temporary, mer- chants will no doubt be justified, on the basis of the secretary's report, in extending credit to Mr. Hawkinsi If the slump is due to the purchase of an automobile. 70 PLAN THIRTY-NINE or a sudden rise in the social aspirations of Mrs. Haw- kins, it may be well to go slow and hold Mr. Hawkins' credit limit low. The direct use which merchants make of the cards kept by the secretary of this Illinois association is the primary function of the association. In a dozen indirect ways, however, the organization has worked for the bet- terment of credit conditions. The association, for example, follows a policy of pub- licity. Residents of the half dozen villages in the town- ship know of its existence and they know the purpose for which it was formed. This fact itself has a bene- ficial effect on credit conditions. Buyers like to be rated well, and they take pains to meet bills more promptly. Further, persistent poor pays are practically barred from securing credit in the villages of this township. A majority of the merchants in these towns belong to the association, and the credit buyer who is rated "4" or "5" on the secretary's records, finds it very inconveni- ent to make purchases without letting go of actual cash. If, after half a dozen merchants refuse his application, he stiU seeks credit, he is driven to the merchant who is not a member of the association. The latter, provided he accepts the risk and finds it unprofitable, soon dis- covers that such cases are accumulating on his books. He is forced to enter the association for protection. This cooperation has been distinctly to the benefit of the merchants of this Illinois township. They realize that formerly they made credits practically in the dark, each for himself. Now they have their mutual experi- ences, and bad debts are no longer a problem. The fear of revealing business secrets that was experienced by some merchants, has been seen not to be a danger. Benefits from the plan, indeed, are far greater than any possible dangers. PLAN FORTY 71 NAME f^tUM-jCAnrLT) Q/OooT-jeA/ ADDRESS if 2 (D ^UlPJ:CXr.ln^i^.e>u^yyl^ SiTj^off. 1918 1919 1920 1921 1 1 2 1 2 1 2 T 2 n^vi IIU2Z mzz IIU2 IM2Z l»2 2, f»az33 1922 1923 1924 1925 1 1 2 1 2 1 2 1 2 7n an Illinois town the credit record of every charge customer is known to the merchants. Individual card records as shovm here, and fully explained in Plan 39, are kepi by the secretary of the local commercial association. They show the combined experience of the different merchants vnih each customer. PLAN NO. 40 THIS SIMPLE PLAN HELD LOSSES UNDER ONE HALF OF ONE PER CENT This plan of keeping track of credit accounts was used succesrfuUy by a Maryland business man who believes in the rigid enforcement of all agreements. A Maryland business man who does a $35,000 busi- ness, practically three quarters of it on a credit basis, and seldom loses more than $150 a year in bad accounts, believes that an ounce of prevention pays. "I find," he says, "that the best time to talk to a customer is when an account is first opened. Granting credit seems like a favor then. I make it plain that the terms will be rigidly enforced, and it is seldom that an applicant will not agree. Of course, it is necessary to use discrimination, but by learning a man's salary and the time of his pay day I don't have much difSculty. 72 PLAN FORTY-ONE "After a charge account is opened, I keep 'tab' on it by using a filing cabinet for the original sales slips, as an account register. The total is carried forward each time a new slip is made out, so the last slip always gives the total amount due. I am thinking of buying some of the equipment on the market for this sort of work. I attach a red cardboard showing the time and credit limits to the clasps that hold the sales slips in place. If the amount of the purchase, added to that already owed, exceeds the limit shown on the red card, the clerk notifies me at once and I take it up with the customer. "My present credit system works very satisfactorily, but I would like to collect some of the bad biUs that accumulated before I started this method of placing and enforcing limits on accounts." PLAN NO. 41 'THE MOST EFFECTIVE COLLECTION PLAN I EVER TRIED OUT" There is really very little to it except courtesy and service, hut a little of these goes a long way in collecting money, as well as in selling goods. The man who uses it says it is the simplest and most effective plan he ever used. A manufacturer in Kansas City has what his credit manager terms, ' ' The simplest and yet the most effective collection plan I ever tried out." It fairly glistens with service and courtesy and, in its fimal analysis, is so dignified and business-like that it forces itself out of the category of dunning letters. At the bottom of all statements sent out is printed in red a notice that the firm considers a charge account an accommodation to the customer and that it is con- ferring a favor when it allows a customer to mail checks rather than be annoyed by collectors. PLAN FORTY-TWO 73 At the end of ten or fifteen days, if no remittance is received, the following courteous reminder which empha- sizes these features, is attached to the statement : Our customers appreciate the fact that we do all our collecting by mall, and It has been proved that mailing checks is much more satisfactory than having a collector call. Will you kindly send us remittance to cover your statement by return mail and greatly oblige us. iUDOunt due: 13.74. PLAN NO. 42 THIS PLAN IMPROVED COLLECTIONS 90% Any plan that brings about 90% improvement in col- lections is surely worth a little study, don't you agree? That is exactly the record made by this one. ' ' Salaried and wage earning people make up the ma- jority of our customers," says a credit manager in a New England manufacturing city, "and we encourage them to run charge accounts. ' ' Statements were sent out the first of the month until recently, when we realized collections were very slow — good hut undeniably tardy. Some bills ran from sixty to ninety days and it took two collectors and a host of letters to get the money in. Something had to be done. "I analyzed the problem and found that the people we deal with are honest, hut that their monthly incomes do not leave much surplus after paying current bills. Here was about what happened to our statements. They were received and put away until pay day. If this was on the 8th or 10th of the month, much of their reminding force was lost and the rent, gas, light, heat 74 PLAN FORTY-THREE and telephone became preferred obligations. If the money went around, we got ours — if it didn't, we waited. Of course, the customer held out enough cash to carry him through the month. "There was the problem, too, of the fellow who spent as little as possible during the month and on pay day went out on a celebration. No matter what form this took we almost always held the bag. "I solved this trouble by getting statements to the debtor on his pay day. The date of this is now required as part of the information on which we grant credit. Personal calls by the collector are made on pay days. "The result is that we have only about ten per cent as many overdue accounts, one collector does the work, and the collection cost has been cut materially." PLAN NO. 43 THIS PLAN SUMMARIZES THE CREDIT POLICIES OF 286 SUCCESSFUL BUSINESS MEN In this plan you have in a nutshell the credit policies c^ 286 up-and-doing men. Stripped of aU detail these policies shake down into the six classifications, shown in this plan. The best way to reduce excessive credit losses is to study the methods of those who have been successful in meeting corresponding situations. One investigation iuto the methods used by 286 merchants to reduce credit losses classifies their methods, with but three exceptions, under six broad policies: (1) Securing a distinct understanding of terms and limits (2) Handling customers according to their individual situations PLAN FORTY-FOUR 75 (3) Cooperating with fellow merchants (4) Making collections monthly (5) Being impartial (6) Seeuriag new accounts on the basis of the addi- tional convenience, instead of the unusual ease with which goods may be purchased It may prove profitable to you to look over carefully the operation of each of these six methods. See Plans 44 to 48 inclusive. PLAN NO. 44 DO YOU FIND IT HARD TO IMPRESS YOUR CREDIT RULES ON CUSTOMERS? Here is a description of the first of the six methods used by the S8G men back of Plan 43. It's important. After deciding whether your credit policy is going to be generous or restricted, the next step is to impress upon customers rules which will carry out your decision. When a man asks for credit he is most often in the position of seeking a favor — ^you can "talk turkey" to him if you use ordinary tact. Credit should not be given if it does not mean an advantage to you, and if extended to a customer who has neither the restraint nor the funds to use a charge account properly, trouble is ahead. It is harmful, of course, unless the capital of the busi- ness is being overtaxed, to go too far in refusing credit, once it has been decided to grant terms. The average man is honest, and the law of averages is favorable to granting credit after a single glance, provided investi- gations are made later. But a careful, pleasant, tactful, and clean-cut explanation that credit means keeping a certain amount of stock outside of the business; that only a limited amount of capital is available for such 76 PLAN FORTY-SIX use; and that it is therefore necessary to receive money on charge accounts regularly, according to definite rules, will help the new credit purchaser to live up to his intention to pay promptly. PLAN NO. 45 THE DANGER OF EXPECTING TOO MUCH OF YOUR POSTMASTER AND HIS MEN Now here is the second method "oU£' by the S86 men (see Plans JfS and 44) • ^' has to do with a mighty imfortanl •point. There is danger in relying too strongly on postage stamps. It is quite possible for the merchant with a small trade to know every customer on his books, and the larger firms can at least keep card records detailing characteristics and previous relations. Both practices make it possible to adapt collection methods to the de- linquent, once it becomes necessary to use them. The man behind with his bills must be brought to the paying mood, encouraged to exert effort enough to hand over money, and shown that the merchant is willing to help him keep his promises to pay, even to the extent of arranging for instalment payments. PLAN NO. 46 "ALL PULL TOGETHER AND WE'LL GET THERE SOONER" CERTAINLY SOUNDS LOGICAL This is the third method endorsed by the S86 men. It's by no means the least important of the six they swear by. Now the third method — cooperating with fellow mer- chants. Local credit bureaus, either as independent organizations or branches of the associations of com- FLAN FORTY-SEVEN 77 meree, offer a means to bring together every merchant 's experience with the credit applicant. A capable secre- tary to handle the reports, a simple code for reporting results, card files for the data, loose-leaf books for the ratings, a determination to deny credit -when the ratings are adverse, and an earnest interest in sending informa- tion to the secretary, will make a success of a bureau of this type. "When the bureau is opened slow pays may be given a "jogging up" by writing them that a list of delinquents must be sent to the secretary. Often, too, the bureau can bring troublesome accounts to time by sending out impartial letters on its letterhead. Dealers in several lines are now organized nationally to handle collections and catch ' ' skips. ' ' PLAN NO. 47 A CAUSE FOR POOR COLLECTIONS THAT MAY BE REDUCING PROFITS LESS THAN 1000 MILES FROM YOUR CASH DRAWER Number four among the six methods perfected by the S86 business men. It's as sound as any among the successful six, too. A former president of the National Wholesale Grocers' Association says that when he asks retailers "When did you send a statement to this party?" more than a few answer, "Oh, three or four months ago — he doesn't pay any attention to statements." The fourth method of the successful six has to do with just such a situation — the distributor who is inattentive to the overdue money on his books has little cause to expect that he will get it. Prwnpt collections promote the habit of paying, and an absolutely definite program, well understood by all con- cerned, will do a world of good in checking credit losses. Customers who are allowed to think they do mer- 78 PLAN FORTY-EIGHT chants a favor by paying bills make poor risks. When their bills become heavy they as like as not shift to a competitor or start buying from catalog houses. Many investigators feel that slack retail collection methods often turn well-intentioned customers into the dead beat class. When a customer falls behind, an immediate investi- gation may uncover the all-important information needed — ^why he did not pay. If a courteous personal call can not be made, a short series — say four — of cumu- lative letters which make it plain that they are leading up to more radical action if indifference continues, should go out promptly and the radical action follow absolutely on schedule, if necessary. The 286 merchants whose credit policies were investigated for material for this plan and the four plans preceding it, find that promptness of this sort keeps accounts out of agencies and guides customers towards frank, businesslike credit transactions. PLAN NO. 48 WHAT HAS THE MAN YOU SEE IN THE MHIROR EACH MORNING TO SAY TO THIS? Here you find the last two of the six methods that won out for the S86 merchants. If they succeeded in so many businesses, isn't the chance that they will help you, even if you're not a merchant? Fifth is the elimination of all partiality. Favoritism makes for trouble in credit affairs exactly as in all others. The merchant who carries "pets" on his books, as he calls them, will find that the competitor who treats everybody alike gets more trade at a better net profit. Last of the successful six methods is the admonition to obtain credit aecouats on tne oasis mat taey anord PLAN FORTY-NINE 7? greater convenience and not by urging how easy it is to get goods through them. There is no doubt but that carefully handled credit facilities are worth advertising. They supply you with one of your keenest weapons against competition. Still, stating openly that a credit account makes the gratification of wishes a matter of words is sure to lead to slow collections. PLAN NO. 49 THIS PLAN "ATTAINED ITS OBJECT" This manufacturer believes in going a little deeper into the subject than the next fellow — and that's the sort of work that usiudly makes good. A manufacturer now well established in the West started in business with only the proverbial "shoe string." When some one asked him what he considered the requisites of success in business he replied: "Hon- esty, hard work, and credit, but the most important is credit." It is therefore but natural for him to emphasize to his delinquent debtors the value of protecting their credit, and all his collection letters contain that line. When these letters fail, he encloses a card on which he has epitomized his ideas about credit. It reads like this : IP EVERY MAN WOULD REMEMBER THAT A ONE DOLLAR DEBT MAY DESTROY THE CREDIT THAT TOOK NINETY-NINE DOLLARS TO ESTABLISH— HE WOULD GUARD THAT CREDIT "I believe," this manufacturer declares, "that it is as important for me to educate my customers to pay as it is for our salesmen to educate them to buy, and my plan of teaching them the value of credit has, with few exceptions, attained this object." 80 PLAN FIFTY Kingman was not a collector — his specialty was selling adveriising. An advertiser had cancelled his contract and refused to pay his account. "He's got a grudge against us" said the collector. But Kingmam had a chat with him, got a check for'the account in fuU, and opened the way for additional business. See Plan 8. PLAN NO. 50 WHEN MR. DEBTOR ASKS FOR MORE TIME, TRY THIS PLAN We ali know that care must be exercised in granting the request for extensions for fear that the privilege will be abused. This plan shows how a credit man in St. Paul tackles the problem. "When a debtor writes me in a straightforward man- ner requesting an extension of time on his aeoonnt, I always grant it," says the credit man for a St. Paul firm, "provided the requested extension is not too long; provided it is the customer's first request on that par- ticular account; and provided also that my past experi- ence with him has not taught me that he habitually makes such requests. If, however, the length of time requested seems unrea- sonable, I shorten it; if it is the debtor's second request, I usually grant it, but explain to him frankly that he can not consistently expect further favors for the same reason ; and in cases where he shows signs of developing the habit of asking extensions, I write him at length PLAN FIFTY-ONE 81 that he should, and must thereafter, arrange to meet his bills more promptly in order to insure our continued confidence in him. "In eases where the account is large, and an extension of more than two weeks is asked, I generally request a reasonable part payment by return mail and allow an extension on the balance. "In granting these extensions, I never grant a short time or a few days. Always, I require a definite pay- ment date; and if the customer does not mention one in his letter I fix it for him. On these occasions I write as follows: 1 refer to your letter of the 17th re- questing a few days' extension on your account of S65. It is a pleasure to accommodate you this time, and we shall, therefore, grant you until May 15th. On that date, then, at the latest, your check in full payment is expected to be in our office. "On short extensions of time, if the remittance is not received on the specified date, I write politely but force- fully. If reasons justify my granting a long extension, I usually remind the debtor a day or so in advance." PLAN NO. 51 THIS PLAN GETS QUICKER ACTION Tkis plan certainly carries with it a "hot" letter — no doubt mUrely too "hot" for everyday use, but you'll nevertheless not begrudge the time it takes to read it, for ycfu want to get an idea of what extremes are at times necessary. The manager of a western coUeetion agency states that he has at times found it a very successful plan to appeal to delinquents from as many different angles as 82 PLAN FIFTY-ONE possible in a letter. "M.any debtors who are being con- stantly bombarded by dunning letters, seem, obsessed with the idea that there is no necessity for making a payment until a series of dunning letters has exhausted the angles of appeal the collector is able to discover," he declares. "For this reason I have found it successful to put as many appeals in one letter as possible and I find that I get quicker action. Here is one letter which I have found especially successful. It holds out but little hope for the debtor to console himself with : This is a collection letter But it's a different kind! I'm not going to try and "scare" you into paying for that lamp which you ordered on May 15th, giving me your positive promise to pay the $1.50 balance in ten days. But I AM going to try to appeal to your MANHOOD. I'm going to try to reach that "something" inside of you that would make you ASHAMED to slip your hand into my pocket and abstract a dollar bill — and it is the same "something" that makes you asheimed to keep my goods and refuse, fail, neglect, or forget to pay for them. Now you justly owe me this small bill — you KNOW that — and maybe it was at first inconvenient to pay all of it, and things just slipped along until you forgot about it. Maybe you got angry. Maybe you were out of work and absolutely unable to pay. BUT THERE IS CERTAINLY ONE STEP YOU CAN TAKE! That is to send me SOMETHING on account, and tell me just exactly what to expect . I'mi making this frank explanation to PLAN FIFTY-TWO you because I want you to have a chance. . Do you realize that your failure to pay this bill may seriously impair your credit stand- ing? We belong to a cooperative credit association and sooner or later if you do not pay we shall be obliged to give your name to this association as a man who does not pay his bills. Now, of course, we have no wish to injure you in any way. But we sent you goods in good faith, believing you to be honest, and we must do our share to protect other dealers from loss if it turns out that you do not intend to pay. So I suggest that you REMIT SOMETHING. If it's only 50c or a dollar — it will show you mecin to do what's right. PLAN NO. 52 HERE A SIMPLE MELODY GOT THE MONEY No doubt the Minneapolis merchant who uses this plan figured thai if "music hath charms to soothe the savage breast" it ought to be effective in loosening the purse strings of some of his slow-paying customers. Just a bit of "Comin' Thro' the Eye" and a dunning ditty is all there is to this plan. A Minneapolis mer- chant stamps words from a parody on the famous song and appropriate music at the bottom of his statements with a rubber stamp when his customers fail to remem- ber that he "needs the money." It's an unusual plan, but an effective one. And faO to get prompt pay. ,-94 , a. .» L. ft, y p iA i>rk:J'.fJ'^- ■"V — d ■ d S " May • bod^y n?* ask . bod-y lfj> J\ / J^. J 1 ^^^^^ Please re - mit to dx^- 84 PLAN FIFTY-THREE PLAN NO. 53 THIS PLAN KEEPS A TIGHT GRIP ON ITS TASK Keeping a "whip handle" grip on the instalment accounts of any business is only a matter of detail, but it really isn't as simple as that sounds. In this plan a business man who knows what he is talking about particularly thoroughr ly tells exactly how he is enctbled at cdl times to tell exactly how accounts stand. "A retail store which sells goods on the instalment basis to persons whom it does not know personally, must supply the lack of personal touch and the absence of any opportunity for detailed investigation of each customer, both of which a wholesale house can and does possess, by a plan of records and accounting which cover three objects," says an Illinois merchant. "It must enable the store to have as ample security as possible for the goods it has sold on credit ; it must keep track, without the use of expensive agencies, of its customers, as regards their places of residence and work and cir- cumstances ; it must allow the office to know at aU times the condition of every account and provide a means for regularly following up these accounts — ^that is, it must provide a special kind of bookkeeping suited to this kind of business. "When a customer orders a lot of goods and wishes to pay for them by instalments, the salesman itemizes the goods on an order blank such as that indicated by the form on page 85. He enters an itemized statement of the goods on this, with the price at which he is selling each piece and the key cost price on the tag of each. He also enters the name and address of the customer, the amount of cash which he wishes to pay down, and the amount and number of the instalments. "The order blank is then given to the bookkeeper, PLAN FIFTY-THEEE 85 ARhf Received by BltggS Furnituie CoiHpaiqr nn •* a.K C n. n RiKhUM £dilra« SfllD 111 flat Nn Hear CMcatn w SslBsman | factmy Clieck Quantity Number ■ Ova FuH ParUcuIars on tho Otter Side of This Order Before Filing Orders for goods purchased on the instalment plan from the retailer mentioned in Plan 63 are itemized on a blank similar to this one. The selling price, the key cost price, and the name and address of the customer, together with the terms of the instalment agreement, are all noted on this form. who makes out a note to the company from the customer, and a mortgage on the goods securing the note. This note is made out for the amount unpaid on the goods, and states in detail the sums to be paid, and the suc- cessive dates on which they are to be paid, showing that the note is secured by a chattel mortgage of even date, which of course must be recorded. "This done, the transaction as far as it concerns security and pledges from the customer, is complete. The next step is the ofSce system by which this account is followed up, and the bookkeeping system by which the necessary details are recorded. "The order, immediately it has been OK'd by an officer of the company, is given a ledger number, which thereafter is the number which identifies it in all its phases. From the order blank the order is entered on 86 PLAN FIFTY-THREE a sales or day book, where are entered all the day's orders, whether cash, charge, or mortgage sales. Suffi- cient details are here entered so that the book can serve as a source from which to post the ledger. "The ledger used in this system is really more than a ledger. It is a history and record of every detail of the case. This will appear in the mention of the number and kind of entries made on the ledger in the later developments of the case. The ledger page is divided into blanks as indicated by the form on the next page to accommodate the entry of all details required. At the time of the first entry all the details on the order blank are entered on the ledger. "When the sale has been entered in the sales book, two cards, exact duplicates of each other, are made out, as shown by the form on page 88. The name and address of the customer, the date and amount of the sale, and the terms of the sale are entered at the top. Below are blanks for the entry of pajnnents, and in the lower left- hand comer is the ledger number of the customer's account. The reverse side of the card is also ruled for the entry of payments. "The first entry to be made in the payments column will be the cash paid at the time of purchase. The bal- ance due and the date of the next payment are always entered whenever a payment is made, and any remarks regarding the payment, or the next payment, or the account in general, are entered in the column provided. "One of these duplicate cards is the collector's card, the other the office card. The latter never leaves the office, but is filed in a case numerically, in such a position that the ledger number of the card is at the upper right hand comer of the case, always visible. This card is used for reference in the office. "When a customer comes in to see about an account, PLAN FIFTY-THREE 87 the bookkeeper or the secretary, instead of having to handle a clumsy ledger, looks up the customer's card, and on it will find all the details and facts he needs. As will be explained, the collectors' cards are so filed that finding an individual one is out of the question. These office cards are also used for posting payments and accounts to the ledger. "The mortgage customer is given a little book by the company, exactly like a bank book, in which all pay- ments made are entered. The stiff cover of this booklet contains all the necessary information regarding the account, as shown by the form on page 89, and when the customer calls to make payments or sends a remit- tance, the book always accompanies them, and the pay- ments are entered in it instead of formal receipts being made out. Receipt for payments to collectors is also made in this manner. By this means the customer always knows what his balance due is. "The collectors' cards are filed in a cabinet containing thirty-one pigeon holes, one for each day of the month. Suppose the first payment on an account is due on January 11. The card, made out perhaps on December 21, will be placed in the '11' file by the clerk. This is a reprodvetion erf a page from the ledger referred to on page 86. It is ruled for entries of all payments made on charge accounts. Space is provided for the customer's references, the salesman's name and the terms. The ledger contains a complete history of every instalment account. 88 PLAN FIFTY-THREE 1 1 ¥»m» ' 7 3 Address 4 5 6 Business Address 7 Date of Sale Amount Terms 8 9 ID 11 1^ 13 14 last Paymnnt 15 IS Payments Balance Due Remarks 17 Data Amount 18 19 ■Hi 21 22 23 24 25 78 27 28 29 30 31 No. Forw' ard. AN INSTALMENT ACCOUNT CARD This card is made out in duplicate as explained on Page 86. The upper portion is for data regarding the account. Below are blanks for entering payments, and in the lower right hand comer space is provided for the ledger number. The reverse side is also ruled for the entry of paymenis. PLAN FIFTY-THREE 89 Always Bring This Boolt Witli You Ledgw Page Ha_ Name Address Payments of $. Due Salesman- If You Remove Goods Without Reporting at Our Office You Forfeit all Payments Instalment customers of the retailer mentioned in Plan 53 are provided with books like this, in which payments are entered. This avoids making out separate receipts and enables customers to know at all times exactly how their accounts stand.. All the necessary information about the account is noted on the cover, "On January 11, the clerk takes out these cards and arranges them in their numerical order. She then looks up in the ledger the account of each card. One card shows that a payment of $20.00 is due today, the ledger shows that the $20.00 was paid by the customer on the 9th. She enters this payment on the card, enters the date of the next payment, say February 5, and puts card to one side, for filing in the '5' pigeon hole. "The next card may show a pajnnent of $8.00 due. The ledger account shows no payment made, so the clerk puts this card to the other side; it wiU go to the collector the next morning. The next card shows a payment of $6.00 due today. The ledger entry shows that the customer has been in, paid $3.00, and said he would pay the balance on the 20th of the month. The payment is entered, the promise is written in the remarks column, the date of the next payment is entered, and the 90 PLAN FIFTY-THREE card is put on the first pile, to be entered in the '20' pigeon hole of the cabinet. "So all the cards are run through. When finished, there will be two piles of cards : the cards in one to be filed again, after the entries made on them have also been made on the ofQce cards; the others to go to the collectors. That evening the cards are given to the cashier for inspection and comparison with her cash entries of the day. Some payments may have been made that day, and these people must, of course, not be dunned again. "If such a payment has been made, the proper entry is made on the card and it is placed with the first pile. Some customers may have been in and said they could not pay today, but would in ten days. This entry is made, and the card properly filed. "The cards left for the collectors are classified by districts and given to the coUeetors the next morning. Before the collector takes them out) he enters the name and number of each in a book which he leaves in the oflSce. This serves as his receipt to the clerk for the cards which he has taken. When he returns at night, he enters opposite each name what has been done about the payment, which he has also written on the card, and hands the cards back to the clerk, who checks them off. The cash collected he turns in to the cashier, with the names and addresses of the customers. "When an account is fully paid up, the note is returned to the customer, the mortgage cancelled, and the two cards destroyed, since the record on them is fully recorded in the ledger also. Should this customer wish to open another mortgage account, his whole pre- vious record, his promptness in paying, his faith in keep- ing promises — in fact everything, can be looked up in a second." PLAN FIFTY-FOUR 91 In Plan S2 a business man explains his collection foUow-up system which saved him $900 a year. On another page a simple form is reproduced which keeps another man's files dear of dead material, {Plan SS.) In Plans 63 and 62 are stUl other simple forms for short-cutting collection routine. PLAN NO. 54 A PLAN FOR "LAST TIME" COLLECTIONS This plan is not very elaborate, but the man who originated U says that collections have been "considerably higher" since he perfected it. "Handling collections courteously has saved consid- erable money for us," says the manager for a western company. "We had trouble in making final collections from tenants who were vacating houses, so I worked out a plan whereby with each final statement there was enclosed a card engraved with this inscription: IN SUBMITTING THE ENCLOSED BILL, THE FINAL ONE FOR YOU AT THE OLD ADDRESS, THE COMPANY TAKES THIS OPPORTUNITY OP STATING THAT I T HA S ENJOYED THE PLEASANT RELATIONS WHICH HAVE EXISTED IN THE PAST AND HOPES THEY MAY BE RE- SUMED WHEN YOU MAY AGAIN BE IN NEED OF OUR SERVICES. "The percentage of collections in such cases has been considerably higher since introducing this card." 92 PLAN FIFTY-FIVE PLAN NO 55 "BROUGHT IN MORE MONEY THAN ANY LETTERS I EVER SENT OUT" The credit manager who uses this plan hdieves in short internals between letters. He makes his hit hard and sends them out every five days. "I used to think that it was all in the letters," said a Springfield wholesaler. "Now I am convinced that it is almost as important to get the letters to the debtor at short intervals as it is to get the right kind of letter. When letters come two or three weeks apart, they give the debtor too much chance to say 'there is still plenty of time' — ^when they arrive five days apart the debtor begins to figure that the final one is coming sooner than he figured. "I experimented with several follow-up letters along this line, and the four letters printed below, when sent out at iatervals of five days, were not only successful, but brought in more money than any I have ever used. No. I I enclose a memorandum of your account which is now past due. Probably the fact that the amount is so small has made you overlook it. As these small accounts were incurred for the benefit of our patrons and do not permit expense in the way of collecting, I am writing to you personally. Please make out a check for this sum and send it to me immediately. Don't bother about writing -- I under- stand how these oversights occur. Just pin your check to this letter and mail it to me in the addressed envelope enclosed. Thank you. PLAN FIFTY-FIVE 93 No. II We wrote you several days ago re- questing a remittance to cover your account . Evidently the letter did not reach the proper person or department in your office, as we have received neither remittance nor reply. As this merchandise was shipped you on Jan. 10, and as it was distinctly un- derstood that our terms were cash after 30 days, we are at a loss to understand your attitude. Perhaps the goods have not arrived or are unsatisfactory in some way. If so, let us know at once and the matter will be adjusted promptly. At any rate, you as a business man will appreciate the fact that unless we have a sufficient reason for your actions, it will be impossible for us to permit your account to remain in this condition. Please explain why you have not made a pay- ment, as agreed, or send us a check by return mail. No. Ill Your account is now 60 days overdue. Don't you see that by treating us in this unjust and unbusinesslike manner, you are seriously injuring your own credit? We are reluctant to think that you are will- fully ignoring this account, disregarding our rights, and your standing as a reputable business man, but we will be compelled to assume this attitude if you allow this letter to remain unanswered. We should much prefer to find that there has been some good reason for this condition of affairs; but if you give us no 94 PLAN FIFTY-SIX explanation we shall consider your silence as practically an invitation to teike any action necessary to protect our interests. Please remit immediately on receipt of this letter so that we will not be obliged to put this account in the hands of an attorney in your city, an action that will inevitably result in a loss to you. No. IV We have written you three times asking payment of your past due account of $16.00. You have not only ignored all of our let- ters, but you have failed to give us any reason for your delay in making payment. Under these conditions we will not carry this account any longer, and unless you pay it within ten days we shall at once place it in our attorney's hands for im- mediate suit, without further notice to you. PLAN NO. 56 THIS PLAN PAYS BIG DIVIDENDS ON A TEN-CENT INVESTMENT Really there isn't very much to this plan, looking at it from your side of the fence, but if you were a banker you vxndd see at a glance just why the house thai uses it gets attractive results. Many firms send out drafts in great profusion accom- panied simply by a printed form of enclosure, and ex- press great surprise that the country banks do not give them very much attention. An Iowa house came to the logical conclusion that the bank is worth its hire, and since then has enclosed with every draft that goes out ten cents in stamps, in a sep- PLAN FIFTY-SEVEN 95 arate envelope on the outsiide of which the following notice is printed: We enclose ten cents in stamps to defray the postage, and so forth, involved in handling the endosed draft. If the draft is paid and the exchange is not, you may deduct independent of this. If the draft is refused, we would like to have the reason for its return stated. Please make personal presentation. "Results have been clearly apparent," says the credit manager of this concern. "Nearly every draft that goes out, if not collected, comes back with some endorsement that aids materially in handling the account, and a more cordial relation has been established between our house and the bankers." PLAN NO. 57 THIS PLAN MADE INSTALMENT CUSTOMERS "TOE THE MARK" Getting the "backslider" to pay up his aecount is no easy job, and at times unusual methods are necessary. The dealer who uses this plan has found it exceptionally "We do not begin our collection series until after a second monthly statement, marked ' Second Notice, ' has failed to bring a reply," says an instalment dealer. "If two weeks pass without a response, a first letter is sent, calling the debtor's attention to the fact that the account has been overlooked and requesting immediate payment. "We point out in this letter, courteously, the necessity for keeping these instalments paid up promptly. This is followed by a paragraph like this : You may have overlooked the fact that in signing this contract you agree to send us a remittemce regularly each month until 96 PLAN FIFTY-SEVEN your account is paid in full. This, how- ever, was the agreement and we have planned on receiving payment in this manner. We feel certain that you will find it most satisfactory to adhere to this plan, for if you allow two or more instalments to accrue, and are compelled to send us the whole amount in one remittance, it may work hardship. We will appreciate it if you will pay the overdue instalment at once and see that future instalments reach us promptly each month as they fall due. "If this courteous letter does not, within ten days, bring a payment, or at least a reply, a second letter, more urgent in tone, is sent, cautioning the debtor against the inconvenience accumulated instalments may cause and bringing the matter to a head by insisting on payment by a certain date. "In the case of a business man we give the promptness and regularity expected a specific application in this manner: You undoubtedly have our last letter somewhere on your desk and you have been planning to send that check at the first opportunity. But each day the obligation has slipped your mind. Now, let us make two requests. Make a memorandum on your calendar pad of the other payments, so that they will come to your attention each month, and send us a check to cover the past due payment today. Then we will have no occasion to trouble you with reminders in the future. "If the account goes beyond this stage the credit manager sends a third letter, which exhibits absolute fairness, but is more severe in tone. This letter is shown in Plan 78." PLAN FIFTY-EIGflT 97 PLAN NO. 58 THIS LETTER HAS A HARD TASK What task could be much more diffiadb than refusing a man's request, and then setting out to sell him a bill of goods? But here's a letter that often does just thatl "The large-calibre credit man! realizes that he is a salesman as well as collector, and must coddle along the 'little fellows' even at the expense of an oeca^ sional lost account," asserts the credit manager for a Missouri house. "This is the price the house is willing to pay for the additional business that could never be secured otherwise. "Here is a letter we send out to a customer on whom reports have not been satisfactory. This letter does not tell the customer bluntly that his standing is not satisfactory. A sugar coating is given to a bitter pill by assuring him that the reports 'do not give the required information,' and as an inducement to secure his order on a cash basis we offer a special discount: In seeking information from the usual outside channels for establishing a credit rating for you, we find our reports have not been sufficiently detailed to permit us to arrange an account on an equitable basis. These reports all speak very highly of you in a personal way, but do not give us the required information on assets com- pared with liabilities, to enable us to £u-rive at such a credit basis as we feel you unquestionably are entitled to. We assume you want our goods for your early fall trade. It is imperative, there- fore, that we ship immediately. We suggest that on this order you arrange to favor us with a draft, in consideration of which we will be pleased to allow you a 98 PLAN FIFTY-NINE special discount of 3%. Bear in mind that we suggest these terms only on this first order, as we feel confident we can easily arrange a credit basis for all future ship- ments you will need in our line. We sincerely trust you will take no personal exception to this suggestion, which we have made in your interest solely. We thank you for the kindness of an imme- diate, and, we trust, favorable reply. In Plan 14 you will find another letter written by the same credit man, which he also has found very effective. PLAN NO. 59 WHEN NECESSITY IS KEEN AND DISCOUNTS ARE POSSIBLE THIS PLAN MAY HELP Speaking of "necessity being ike mother of invention," here is a plan that nothing short of desperation made necessary. The business man who used it saoed himself from bankruptcy, and is stUl doing business mth the same old customers. "I had my back against the wall," declares a Chicago business man who does an extensive credit business. "My wife had been ill, an operation necessary, and a real estate deal I was in went wrong. "Money was scarce with me and all my creditors seemed to choose the same time to shout demands for their money. I began to imagine myself telling it to the referee in bankruptcy. "I realized I couldn't go roughshod after my debtors. They were nearly all responsible businesi men and an attempt to dun them by harsh methods would have meant losing much of my trade. So I decided I must get after them with some inducement to settle quickly. A cash discount for immediate payment was the idea PLAN SIXTY 99 I struck upon. I wrote a letter to every customer owing me, and the results it brought carried me along until the clouds lifted. Here is the letter that saved me : While it is unusual for us to offer a discount, and our margin of profit does not justify it, it happens at this particular time that our expenses are unusually large, and it is quite necessary in order to meet unexpected circumstances that we make some concession to raise money by the end of this week. Should you have money lying idle in the bank, perhaps a discount of 5% for the enclosed bill will be sufficient induce- ment to forward us a check. We want it thoroughly understood that this is not a request, but only an offer we are making you — you are at liberty to accept or decline. Should you care to favor us, please forward check so that it will be received by Saturday, at the latest, as we will be unable to discount beyond that date. PLAN NO. 60 TWO LETTERS FOR THE DEBTOR WHO DOESN'T MAKE GOOD HIS PROMISES A Boston merchant believes thai when he grants an ex- tension of time, he is placing himself on the defensive if he allows the agreement to go unfulfilled. Here he de- eribes some of the measures he takes to keep on the offensive. "I have found that it doesn't pay to allow debtors too much leeway in making promises and not cashing in on them," says a Boston merchant who does a $450,000 a year business. "In the majority of cases 100 PLAN SIXTY promises are only a 'stall' on the part of the debtor who either doesn't want to pay or is playing for time. If you allow one promise to go by unnoticed, you place yourself on the defensive and the first thing you know you have more promises but no money. "I find it very successful in checking this promise nuisance, to make a careful note of all promises and the exact date they are to be fulfilled. If the debtors don't make good on that date, I don't give them a chance to congratulate themselves that I forgot, but I send them a letter that gives them to understand that I expect promises to be made good. "Here is the letter: At your solicitation we extended the time of payment on the above account, and should have received your remittance yesterday. Perhaps it will come to us in this afternoon's mail, but we have not yet received it in accordance with your promise, and hence this reminder. We feel that you surely have remitted as you said you would, and hope that your letter has merely been delayed in the mails. But if you have forgotten your pledge, please 'Get Busy' and mail it NOW -- while it's fresh in your mind -- you surely will appreciate the consideration we have shown you. I can imagine just how you must feel about this, and thoroughly appreciate your position, for I too have made promises in good faith and afterwards forgotten them. So I feel pretty certain that this reminder will bring your remittance, if you have not already sent it to us, and thus close an incident that might lead to a more serious situation. PLAN SIXTY-ONE 101 "Where no extension of time has been granted, but where a debtor has violated a straight promise to pay on a certain date, I send this letter: We are sadly disappointed that you have not kept your recent promise to send us a remittance to apply on your account. We believed you WERE SINCERE and that you would FAITHFULLY keep your WORD. It may be that unforeseen circumstances have pre- vented you from doing so, and if this is correct, don't delay giving it your atten- tion now, so that we can credit your ac- count, Euid close an incident regrettable to us both. Please attach a check to this letter and return it by the next mail. "I have found these two letters most effective in getting debtors to understand that promises will not be accepted simply as excuses for delaying payment." PLAN NO. 61 THIS "TELEGRAM PLAN" KILLED TWO BIRDS WITH ONE STONE Not only does it warn the customer that his account is due, hit this 'plan in addition leaves him, without a defense should he insist in taking the discount later. Perhaps it applies best to rather big amounts, but, then, "an idea's an idea," says the man vnth his weather eye open for new plans. "In eases where a special discount is allowed for pay- ment within, say, thirty days, it is a good plan to remind the customer a day or so ahead of the date when this discount period expires," says a manufacturer's representative who has built up a big business in Min- nesota. "I make use of a telegram in this connection. 102 PLAN SIXTY-TWO On each customer's bill is printed in red ink a statement to the effect that if it is paid by a certain date — ^thirty days from the date the goods were supplied — a special discount of two and one half per cent will be allowed him. Suppose this discount period expires on December fifteen. On the morning of December fourteen the cus- tomer will receive a telegram worded: " 'Today is the last discoimt day on our November account.' "This acts as a strong reminder to the customer and impresses upon him the necessity of sending the check the day the telegram is received. The plan takes into consideration the . fact that when the average man receives a mere statement or a request for payment he puts it aside and in many cases the statement gets entangled in the mass of papers that accumidate on his desk. "The 'telegram scheme' gives the recipient little chance to forget or mislay — ^it demands immediate atten- tion, and usually gets it. It furnishes no excuse for customers to say, 'I intended to take the discount, but forgot when it was due,' and it leaves them without a 'leg to stand on' if they do take the discount after the discount time has elapsed and we refuse to accept their check." PLAN NO. 62 "THESE COLLECTION RECORDS ARE VERY SIMPLE" How a credit manager for an exceptionaUp progressive concern keeps an "eye" on the exact stains of all accounts receivable is fully explained in thefoUomng plan. "We have found that our ability to make satisfactory collections depends largely on our knowledge of condi- tions among all our customers. Therefore we have ree- PLAN SIXTY-TWO 103 ords and statistics that tell us exact conditions in each and every one of our territories," says the credit man- ager of a Michigan company. "The methods used in our collection work can be adapted to almost any busi- ness. "We sell nationally, on instalments, and have both 'open' and 'secured' accounts. We have numerous branches, which are permitted to handle collections up to a certain point. All accounts are referred to the main office as soon as they become thirty days past due. "The record that shows us most clearly of all the general condition of our collections is a graph. It gives us a month-to-month picture of three classes of facts that are important for us to know. These facts are shown by lines of various colors on the graph, as follows: (1) The percentage of sales-ledger cash collected, to the balance remaining on the books (that is, the total amount of money collected in the regular course of business on 'open' accounts) ; (2) The percentage of accounts thirty days past due, to the total sales^ledger balance outstanding, (3) The percentage of delinquent bills receivable ('secured' accounts) to the total amount of bills receiv- able outstanding. "As I stated, these figures are worked out for us in the form of a graph, so that at the end of each month we know exactly how our results for the present year com- pare with the results secured in previous years. "We can tell where the weak spots are, and we know in what directions we need to put our greatest efforts toward collections. Naturally, also, the graph is inter- esting and helpful to us in our credit work. "Even more important, from the point of view of credits, however, is the tabulation of collection statistics by branches as indicated by the form shown on page 104 PLAN SIXTY-TWO 105. It is sufficiently large to contain the record at each branch for a period of five years. The balance due and uncollected at the first 'of the month is shown; next comes the figure showing the amount and percent- age of this uncollected balance that is secured by the collection department during the month. "This record also shows the amount of money that is thirty days past due, and the relation — ^in percentage form — that this figure bears to the total amount out- standing. Finally, we tabulate the total number of accounts, and those that are thirty and ninety days past due. "This record is kept for each month of the year. Figures showing a condition worse than that of the same month for the previous year, are entered in red, so the sore spots become evident at once. Our credit work is also greatly helped by these figures, because we are doubly careful in passing accounts in any locality where collections are proving difficult. "Another simple record which we keep is along much the same line, and has been very helpful. This record is kept by branches and states. Territories are allotted to our branches along state lines, so it is easy to keep the figures in this way. "We show, first of all, the total amount of money outstanding at each branch and in each state; then the amount that is delinquent in each case ; and, finally, the relation of this figure to the total amount outstanding. These figures, it is easily understood, are helpful in credit making in the same way as the record described above. They are also indicative of where it is necessary for us to exert ourselves most in making collections. "More records would only confuse us. We have, in fact, tried having several different kinds of statistics drawn up, beyond those I have described; but we have PLAN SIXTY-THREE 105 mtm m itlE(%) mnEitoF Acctnmn mwBnoF ACCOUNTS 30 DAYS MSI DUE MIlUIBOf ACCOHfTS wttm PAST DUE — '" ' ' — -^ ' This report form for watching collections from branch offices is referred to in Plan 6S. It shows exactly how successful each branch manager has been each month in taking credit risks and pushing collections. Its usefulness is not limited to branch houses, for it can easily be adapted elsewhere. found that money may easily be spent in this way which does not show returns. So we have finally found it best to confine ourselves to these. "In connection with credits, we keep a monthly record showing the number and amount of orders canceled and declined. The latter figure is given in detail to indicate how much has been declined by the general sales department, and how much by the credit depart- ment. This isi helpful in showing up any unusual con- ditions which may need to be remedied, and it shows where to go to apply the remedy." PLAN NO. 63 EVER THINK OF TRYING A FUNNY STORY? A good story with just the right point to it, almost always "gels over" even with the man who owes you money. This plan shows how a credit manager used one effectively and therebu cashed in on a lot of delinquent accounts. "One of the best collection letters I ever wrote," said a credit manager who has a reputation for holding down losses, "was built around a story credited to a southern darky. The point to the story was so pertinent to my 106 PLAN SIXTY-THREE business tliat a debtor must be 'as blind as a bat' not to see it. "With some misgivings I decided to incorporate it in a letter to the debtors it would hit the hardest. I was more than surprised with not only the cash it brought in, but, in many instances, the good feeling that it caused, as evidenced by some of the replies. Here is the letter: Samuel Green, a gentleman of color, had been married about a week when he met Colonel Mayberry Moore, the local judge, on the street in a Southern town where they lived. "How's married life, Sam?" the Colonel asked, in a patronizing tone of voice. "Oh, married life's all right, Gunnel," Sam replied, sheepishly. "On'y one thing th' matter with that wife o' mine, Cun- nel. She's always askin' fo' money. Ev'y mornin', noon and night, fi' cents, ten cents, fifteen cents, -- she sho' gimme no rest whatsoever." "That's too bad, Sam. What does she do with all this money?" "I dunno. I ain't give 'er any yet." Do you sometimes wonder what we do with all the money we don't get from you? It takes lots of money to put our goods across — it takes a lot of money to keep the good work going, and when Just a few don't look their obligations in the eyes — it causes a deficit that hurts all the way 'round. It isn't much. You won't miss it. It's just a question of sitting right down and sending it in. Why don't you get busy with your fountain pen, an envelope and a PLAN SIXTY-FOUR 107 stamp and clean up your account? 'It'll make the whole day brighter. A return envelope Is enclosed for your reply. PLAN NO. 64 THIS "MAN TO MAN" PLAN ALSO LANDED MANY AN APPARENTLY HOPELESS DEBTOR The dealer mentioned in the preceding plan ■woidi perhapg not be the sjicceasful merchant he id if he were not prolific in ideas for collecting money. Here i» another plan he uses. "Another of our plans has heen remarkably successful in bringing in the money on small accounts that are almost hopelessly delinquent and too small to warrant any expense in collecting through an attorney," he says. "It has landed many an apparently hopeless debtor. The appeal is made on the basis of 'Now, we understand each other, let's be square.' It is a man-to- man method that gets many a dollar threats would never pull. Here is one of them : 'Huh! Another dunning letter I Those people needn't be nervous. They'll get their money sometime.' That's probably vhat you said when you saw this letter. But instead of tossing this aside for "tommorrow," or junking it altogether, Just stop and consider us for a moment. 'We don't like to write dunning letters any more than you like to get them, but you see you have a little of our money — $9.82 of it. That isn't much, and of course you intend to pay it. 'But let's square this thing up now. 108 PLAN SIXTY-FIVE Don't read another letter until you have wrapped your check in this one and nailed it back in the enclosed addressed envelope. That will rescue your name from our "unfair" list, and you don't know how much we'll appreciate it." "After all, our success in collecting instalment ac- counts is pretty much a matter of understanding the people to whom we sell and concentrating our endeavor on keeping them from getting behind. In other words, we can not take it for granted that customers will pay promptly. We have to see to it that they do. And it means action at the first suspicion of delay. It is far more difficult to collect two instalments than it is one, and the farther behind a customer falls, the less profit- able his purchases become. Early persistence is better than later sacrifices. " PLAN NO. 65 SPECIAL PLANS ARE OFTEN NEEDED FOR SPECIAL CASES You may say that this plan only applies to special cases. That is quite true, hut the big principle behind it — getting facts at first hand before you make ticklish credit decisions — applies to scores of cases; that's why the plan is printed. "Jackson is getting along fine. He has just bought a new machine." This casual remark from a salesman over the luncheon table put Warman, credit manager for a wholesale firm in New York, on his guard about Jackson, who had an account on his firm's books. Only three years before, Warman remembered, this Connecticut dealer had dif- ficulty in getting himself established in a small store of his own, and it seemed hardly likely that his profits so PLAN SIXTY-FIVE 109 quickly had warranted the purchase of an automobile. At the end of six months Jackson asked for an exten- sion of thirty days on an overdue bill. He claimed that business had been unusually dull. Warman wrote a noncommittal reply and sent an adjuster into Connec- ticut by the next train. The adjuster had instructions not to make known his identity, but merely to look the ground over and report. It was Saturday when the adjuster arrived. In his report to the home ofBce he told of finding the store crowded. Two salesmen, besides Jackson himself, were kept busy handling customers. Indirect inquiries around town also seemed to indicate that the store had every reason to be prosperous, and the impression of Jackson's neighbors was that he was doing very well. Warman, therefore, felt reasonably sure of his ground when he sat down to dictate a frank letter to Jackson. He talked straight to him about extravagance, told him that he had not spoken the truth in stating busi- ness was bad ; in short, that the real truth of the matter was that he spent beyond his means. Warman then pointed out that he had no right to let his business suffer merely in order to make an appearance in the community; and, finally, that an automobile was a fine luxury to have, but that the operating bills run high for the man who is just starting in in business. Warman closed his letter with these paragraphs: Now tell me honestly -- does your wife know that while she is driving around in your new machine, you are writing to me asking for an extension of time on a $200 bill? I doubt it. If she had known how close run you are in the store, she would never have let you buy it. 110 PLAN SIXTY-SIX ■ As a plain business proposition, I must therefore ask you to tell her about it before I grant you that extension. If you cannot cut expenses any other way, sell the machine; for you know, and I know, that it's straining your profits to the limit to keep it. Warman's aim was right, and his letter went straight to the mark. Two days later he got Jackson's reply. The first paragraph read as follows: I showed my wife your letter and we haven't driven the machine since. We're trying to sell it. Warman granted the extension. PLAN NO. 66 TWENTY-FOUR OF THESE LETTERS BROUGHT SEVENTEEN CHECKS A Utter threatening suit, if used only as a lever to force coUeetion, must be tactfully worded and still be posiHm in tone. The letter reproduced in this plan made a high record for itself. "When an account has reached the stage where noth- ing but a threat to sue will get action, the real work of letter writing begins all over again," says the credit man mentioned in Plan 1. "More than half the letters written to debtors, threatening suit, have been used only as levers to force payment. It is therefore absolutely necessary that the debtor be given no hint as to the real purpose of the letter. He must be as firmly convinced as possible that if he does not pay he wiU be summoned into court. The following letter is written with these facts in mind and has been unusually successful in securing results : PLAN SIXTY-SIX 111 Creditors don't stand much chance of getting a hundred cents on on the dollar after the sheriff has become the "sides manager" of a business. In Plan 7S you have an instance of how one business man succeeded in collecting a $1,500 debt by arriving at the scene before this officer of the law ■put in his appearance. If within the next ten days you do not send us your check for $49.80, in payment of your invoice of July 10th, or explain why you have held up payment, we shall feel com- pelled to hand the account to our attorneys. We will regret having any trouble, but you must admit that when you fail to meet your obligations, or explain why, we are justified in taking measures to force a different attitude upon you. Will you do what you should to avoid a lawsuit? "Twenty-four letters like that brought seventeen checks in full pajnnent of accounts, and three explana- tions or excuses for holding up payment and requests for short extensions. Every letter was answered; not one debtor was offended. When I state that in one year out of twenty thousand accounts ranging in amount from $10 to $5,000, I have resorted to l^al aid but twenty-three times, my letters speak for themselves. Legal action to collect a debt is always expensive and in most instances, unsatisfactory. " 112 PLAN SIXTY-SEVEN PLAN NO. 67 ALLOW MR. DEBTOR NO LOOPHOLE FOR DOUBTS OR EXCUSES Give a debtor an opportunity to make too many excuses and the chances are ten to one that's about all you will get. That is why the merchant who uses this plan believes strictness a big asset. "My aim in letters to debtors is always to convey the idea that I am master of the situation," is the statement of an Ohio merchant whose business is on the upgrade. "I approach the debtor firmly, yet courteously. Before I dictate I convince myself that it is going to bring the money. Therefore my letter never wavers or permits the debtor any doubt of my intentions. "I never beg for payment. I eliminate such phrases as 'if convenient,' 'we shall appreciate,' 'will you,' 'can you not. ' They are weak, and suggest to the debtor that he may, if he wishes, have more time ; they give him an opportunity to put you off. Moreover, I never suggest an excuse for_my asking the debtor to pay promptly, other than the fact that the order which he signed gave him just so long to arrange for pa3n](ient. Excuses em- ployed by some collection men — ^like the old one, 'we are in need of funds' — are seldom effective. Yet, all through my correspondence, I try to manifest the utmost fairness. "The 'we' element is eliminated as far as possible. Wherever possible to do so, another word is used, or the 'we' is left out. The 'you' element predominates. "I insist on having my letters neatly typewritten. They must be free from erasures. Punctuation, spelling and paragraphing must be perfect. No abbreviations are allowed. The typewriting must be 'blocked' in the cen- ter of the letterhead as accurately as the stenographer can estimate ; the right-hand margin must be even. ' ' PLAN SIXTY-EIGHT 113 When a man asks for credit he is often in the position of asking a favor — you can "talk turkey" to him if you use the ordinary tact. Often the success of your credit policy depends upon talk of that sort. And that is one of the important points in the credit policy of the S86 successful merchants outlined in Plans iStoiS, inclusive. PLAN NO. 68 THIS PLAN EITHER GETS THE MONEY OR WEEDS OUT THE UNDESIRABLE ACCOUNTS The step next in importance to getting husiness is getting the money. A Texas business man has a third step, getting rid of the business if you can't gel the moneyl Here is his plan. A Texas jobber, who also represents a number of manufacturers, uses an effective series of collection let- ters that makes it possible for him to always keep a "whip-handle" grip on his accounts. His series contains three letters, each courteous and effective. They are businesslike and are not written on a basis of "we need the money," but from the angle that "sound business principles demand you pay us." Here is the first : Your payment was missed this week. Not a serious matter, and we are in no way worried over your account. However, we have to make weekly reports to the factory, and they require us to make our reports promptly. 114 PLAN SIXTY-EIGHT You will remember our salesman ex- plained to you that you got the lowest cash price because we merely act as factory agents, selling on a small commission, and have no collectors. We are going to hold last week's report a couple of days longer. I hope we will not have to send in this report without your payment. The second letter is sent ten days after the first was mailed and is a bit more severe in tone : You have missed two payments. We are wondering if you have any reason for this. We held the report to the factory two days last week, expecting you to come in. Rather than have your name on the list as the only one who did not pay, and feeling this pay- ment had evidently been overlooked, we advanced the payment. We know we have treated you fairly, so please extend us the business courtesy of telephoning or writing, if you can not come in the store to-morrow. We do not feel Justified in advancing your second payment, and unless you make this payment within two days, we must report your failure to the factory. The climax is reached in the third letter, which the jobber says "has just enough 'kick' in it" to bring any customer to time whose business he desires to keep. If this letter does not obtain results, business relations are severed until such time as the account is straightened out and new arrangements made. Here's the letter: I was very much surprised «rtien our cashier laid your account on my desk as a delinquent. He tells me you have not paid us proiq}tly, which I regret very much. PLAN SIXTY-NINE 115 You are about four weeks behind on your account. No one has ever accused us of being unfair in our treatment of cus- tomers. We are always anxious to go more than half way to be accommodating, but, of course, the only conclusion I can draw from your silence, is that you do not care to meet your obligation with us. This is the third letter we have writ- ten and is positively the last. Now you can save trouble and money if you go to the nearest telephone and call Blair 6134 and tell me when you will vaake us a payment. I will have to take drastic means with your account unless you heed my advice AT ONCE. When this letter fails to bring action, the "weeding- out process" begins automatically. PLAN NO. 69 ANOTHER PLAN TO SHOW THAT SPECIAL CASES REQUmE SPECIAL TREATMENT This man Tised a ruse to get his money, that's true, but he certainly harmed no one, and perhaps saved the debtor a lot of trouble. At any rate, the plan is printed simply to point out the basic principle that special cases require special treatment. "Find this man Booth," said the collection manager of a Tacoma firm to his assistant, Warner. "He's owed this bill for several months and our letters are being returned marked 'Moved, left no address. ' I have infor- mation that he owes about every merchant in town." Warner has made a reputation for himself as a "skip hunter" and it was up to him to maintain it. After much useless inquiry he finally found that Booth had a cousin named Frank Carter. Carter had 116 PLAN SIXTY-NINE a telephone and Warner decided that this was one of the times when the telephone would bring better results than a personal call. He decided that if Booth was beeping out of sight, that Carter had been either warned not to mention Booth's hiding place to unknown inquir- ers or left entirely without knowledge of Booth's where- abouts. If they knew anything about his hiding place they would not teU a collector according to "Warner's analysis ; if they knew nothing, they could not help. So Warner made up his mind not to be a collector. He next decided that Carter was "Frank" to members of the Booth family. When ' ' River 2651 ' ' was answered, Warner therefore asked sharply, "Is Frank there?" Then Warner smiled. The plan was succeeding. He could hear a feminine voice calling, "Frank, oh Frank," and some steps. Then a man spoke — undoubtedly Frank— "Hello, what is it?" "Where is Henry now, Frank?" Warner queried, in as casual a tone as he could muster. "Out on Stark's farm at Brookfield," came the answer without the slightest hesitation. Then Carter evidently recalled warnings to be cautious, for he asked, "Say, who is this, I " Warner was not interested in explanations, however, and hung up the receiver. He went to Brookfield, found the Stark farm and had a talk with Booth. The next day he went into his chief's office and told the story. "I found the old fellow way out on a farm — he has been putting every cent he could scrape together into Louisiana land on the advice of a lifelong friend. "All of a sudden he found he couldn't liquidate as quickly as he expected, and bills heaped up. He has evidently always been as honest as the day is long, and the thought of the bills made him sick. PLAN SEVENTY 117 "When the pressure grew heavier, he gave up in des- peration and went into hiding," Warner continued. "As a matter of fact, the Louisiana land is good and he's perfectly safe. By explaining to his creditors he could get more than enough time. "But he dicin't know that, until I put him right — ^I guess he thought an overdue debt meant prison. At any rate he's all straight now, and will be in to see you." "He's evidently a bit different type of character than I expected," the boss interjected. "Yes, I think he is," Warner continued. "He is about as peculiar a sort as I ever hope to run into. It was simply a lack of knowledge about financing that got him into this mixup. " "Just what is he going to do besides pay us a visit?" "He's going to call on all his creditors," Warner explained. "I got his note for your account and enough good Louisiana land security to cover up on ten times as much." PLAN NO. 70 THIS PLAN INCREASED AVAILABLE CAPITAL 100% This plan certainly made good in a thoroughgoing way — it turned a credit buainess into a cash enterprise. "It has been my experience that business men gener- ally have gotten into a rut regarding credits and collec- tions. The fear of losing patronage to competitors is usually the bugbear which keeps them there," says a successful Detroit dealer. "Fully seventy per cent of all the business done in our store is on credit. At the dose of the year's busi- ness we formerly had fifty per cent or more of our 118 PLAN SEVENTY annual sales on our boobs — accounts unpaid. We were borrowing money occasionally from the bank to dis- count our bills. It formerly seemed to me that the main thought in the customer's mind was first to see how cheaply he could buy from us, and then how long he could make us wait for our money. "Several years' hard work at reorganizing my credit system found me at the end in the same old hole — ^half my business and certainly all of my profits still on the books. Then and there I decided that I would put my business on a satisfactory basis so far as accoimts receiv- able were concerned, or 'bust.' "I studied the subject pro and con for many months. I wanted a system which would not only be absolutely fair to the customer but would offer him advantages by actually saving money on his purchases, and I secured it. "Shortly after I decided on my plan everyone on my mailing list received the following letter, which explains our system. We aJso advertised our new terms in the newspapers, and published a pamphlet on 'Spot Cash and Its Advantages.' Here is the letter: . After January first this business will be conducted on a cash basis. You will get the benefit of the change. We are aware of the fact that the gen- eral public does not realize how important it is to the buyer, how advantageous it is, to buy for cash. We know this because so few have taken advantage of our regular cash discounts. We want to make it clear to you that you do reap a real benefit, and the purpose of this letter is to explain how. First, get it firmly in your mind that when you pay cash you get the benefit --in PLAN SEVENTY 119 a cash discount, and in cheaper prices — all cash in hand -- money that you would not have otherwise. In operating our business on a cash basis, we have two distinct propositions to make you -- business propositions that will pay you interest on every cent you spend with us. Cash Offer No. 1. After January first we will give you a discount of four per cent on all payments made to us in advance on estimates, or on bills of material which we furnish — the seune basis as bankers pay on certificates of deposit. There is money for you in this cash offer . There is so much actual profit in it for you that you can make money by borrow- ing money at the bank ajid paying eight per cent, just to have the cash in hand to get this four per cent discount, because — four per cent discount is the same as forty- ei^t per cent interest for one year. Cash Offer No. 2. Our second proposition is to allow two per cent on all fifteen-day bills paid the 15th of the month. That is, you may pur- chase material from the 1st to the 15th, and then make full payment and get the two per cent discount. This applies also to material purchased from the 15th to the 30th; if paid on the 30th, you can get the two per cent discount . Two per cent cash discount is equal to twenty-four per cent interest for one year. When all is said and done, the best that CEin be said of credit is that it is 120 PLAN SEVENTY convenient. It is a business proverb that the man with the cash buys the cheapest. Davis quality, Davis prices and Davis serv- ice are known to you as good, honest, fair and helpful -- with this change to a strictly cash basis you will be more than ever glad to trade with us, and pleased with our goods and our service. Do a little figuring for yourself. Whether you are a big buyer or a little buy- er, the facts and figures given above show you a real genuine, cash-in-hand-saving here. Let us add that while we do not intend to curtail or refuse credit in the future, to the deserving, we must and will insist upon a different procedure in settling open accounts. As retailers we must settle our accounts within thirty days, or at the most, sixty days. We shall ask the same settle- ments from our credit customers. That is, all accounts are net, or due in sixty days, and must be settled either by cash or "bankable" paper, at a rate of interest that will be accepted by the bank. While we adhere strictly to the fore- going, we wish to give you our cordial assurance that any courtesies we can extend you will be cheerfully accorded in the future as in the past. "On the back of this letter I printed a zinc cut of a bank labeled 'your bank,' and a cut of our building labeled 'our business.' Under the former I printed: 'Your bank will loan you money at eight per cent inter- est,' and under the latter: '"We will gladly pay you twenty-four per cent on this borrowed money. ' "Between these two cuts and captions I printed the following: PLAN SEVENTY-ONE 121 BORROW MONEY AT EIGHT PER CENT— LOAN IT AT TWENTY-FOUR PER CENT— NOTHING TO LOSE— EVERYTHING TO GAIN. YOU CAN GET INTO THE MONEY-LOANING CLASS WITH YOUR FIRST CASH PURCHASE FROM US. THE LETTER ON THE OPPOSITE SIDE OF THIS SHEET EXPLAINS FULLY THE ADVANTAGES TO YOU OP OUR CASH SYSTEM WHICH WENT INTO EFFECT JANUARY FIRST. "We did not start out with the idea of placing our business on a strictly cash basis. We were determined to better existing conditions through a plan which we believed would bring us in more cash each month, and would do away, in part, with our extensive credit busi- ness. But as a matter of fact we soon did not have to trouble with any credit business at all! (See Plan 72.) PLAN NO. 71 THIS PLAN IMPROVED RESULTS 70% Here you see how $350 went to wade that might just at well have been saved — atid the way to do the saving it also described. "A Nebraska dealer in the days before I came here, owed us $500, ' ' says the credit manager for a Western wholesaler. "Two letters failed to bring any explana- tion other than a reply that he simply did not have the money at the time. Following blindly the routine collection process, my predecessor sent this customer a brief communication telling him to find the money somewhere or go to court. Suit followed, the merchant went into bankruptcy, and we ultimately received less than thirty per cent of our claim. "A few months after I took hold a similar situation arose with an Indiana customer on a six-hundred-dollar 122 PLAN SEVENTY-ONE account. Delaying summary action, I proceeded to make a thorough investigation of the case. In a few days I found that the customer, although temporarily embarrassed, had always been a shrewd and careful merchant, and that, if given time, he would probably regain his financial position. I wrote him this letter: We appreciate fully the contingencies that have made it impossible for you to settle your account with us before now, and as a mark of our appreciation of the promptness with which you have always met our requests in the past, we are glad to extend to you any reasonable privilege. What amount could you arrange to pay us monthly on your present account? If you can make regular payments on it, we will be glad to ship you in the meantime any goods you may desire up to a reasonable figure, and you can settle for them on receipt of the statement each month. This plan should work no hardship to you, and it will enable us to continue doing business on our long standing and cordial basis. "To this letter the merchant replied offering to pay $50 each month. This I succeeded in raising to $60, offering to ship the merchant new goods up to the value of $100 monthly, to be paid for promptly. "On this basis the $600 account was settled in full, the firm secured, and was paid promptly for, the current business, and a year later, when the customer had rein- forced his bank balance, the house secured practically a monopoly of his trade in its line. "You can see that by my plan the offer of a definite rate of payment came from the merchant himself. In tins way I succeeded in drawing the dealer out, getting an insight into his financial condition and betraying PLAN SEVENTY-TWO 123 none of my own extreme eagerness to secure a settlement. "This is one example of how cautious and considerate treatment of the customer and an understanding of his case just at the critical time, may point the way to a compromise rather* than to a court." PLAN NO. 72 "WE FIND THIS PLAN HAS MANY ADVANTAGES" Changing over from credit to cask is not an easy task in any line — that's one reason why you'll find this plan un- usiuMy interesting, "Changing from a credit to a cash business is not accomplished without first meeting many objections from old customers who are accustomed to the old method," says the dealer who contributed Plan No. 70. "The response to our first letter (See Plan 70) announcing the change in our policy came largely in the way of personal inquiries. We would sometimes have as many as ten or fifteen customers in our ofiSce at ' one time asking for a detailed explanation. "My clerks and I always used the same illustration. We would take one hundred dollars as the price of the customers' purchase, and assume that he would pay the amount in thirty days under the old system. If he paid on the fifteenth or the thirtieth of the month, he would be entitled to a discount of two per cent — a saving of two dollars. Then we suggested that he could easily borrow the one hundred dollars at the bank by offering the banker eight per cent interest for thirty days; which would amount to sixty-seven cents. Since his discount came to two dollars, he obtained a net profit of $1.33. "We illustrated the four per cent advance discount 124 PLAN SEVENTY-TWO by showing customers that they could well afford to borrow the one hundred dollars at eight per cent and hand it to us in advance on a purchase. The four per cent discount, figured on a hundred-dollar basis, nets the purchaser $3.33 on his money in thirty days. Many of our customers came back at us and said that we should offer them five to ten per cent discount for cash. "Bight there is where we got in our best^ work. A two per cent discount on a thirty-day account amount- ing to one hundred dollars nets the purchaser a saving of two dollars, which amounts on an interest basis to twenty-four per cent per annum. That is where we landed our strongest argument by saying: 'Your bank will loan you money at eight per cent interest — ^we will gladly pay you the same as twenty-four per cent inter- est per annum on this borrowed money.' "We find that the system which we have adopted has many advantages. It brings us into contact oftener with many of our customers — ^those who take advantage of the discounts. Our dealings with our customers are more satisfactory. For example, when a customer comes in now to settle his account, the transaction is fresh in our minds — ^not over fifteen days old, and at the outside not over sixty days old. Therefore any errors which may have occurred are easily adjusted. "Again, we feel that we have placed all of our cus- tomers on the same basis, for we offer them a square deal by giving cash consideration, whether they pay in advance, on the two settlement dates, or on the net date. This gives us an opportunity to enforce terms after the discount date is past. If we did not insist on customers giving us 'bankable* paper bearing interest to cover the sixty-day account, we would not feel that we were treating them the same as those who had taken advan- tage of the discounts. ' ' PLAN SEVENTY-THREE 125 PLAN NO. 73 THIS PLAN GOT THE MONEY BEFORE THE SHERIFF ARRIVED This plan shows hdw a hrtsiness man who stood a good chance to lose $1,500 grabbed time by the forelock and collected his money. "Sometimes you must take unusual steps to get the money," says an Iowa business man. "I was confronted recently with the problem of how to collect $1,500 from a merchant who owed another firm more than he did us. I found when I arrived in the town that a man from the other house had made an effort to get his money, but had contented himself chiefly with promises. "After analyzing the customer's business and the methods imder which he was operating, I made up my mind that the time had come to collect, if we hoped to do so at all. I told him we must have a settlement. He said it was impossible — ^that the people who owed him would not pay, and he must have more time. "Then I offered to show him how to get money. 'I'll stay with you,' I said, 'until some of these people do pay.' "He was glad to have my help. I went into his store and made myself a part of it, got acquainted with some of his biggest debtors, and induced them to give him their notes. I went out in the country and hunted up other debtors, taking their notes, also. Under his authority, I collected cash whenever I could. Nobody in the town, except the dealer himself, knew whom I really represented. Among other steps I took was to find a buyer for a stock scales and yard belonging to my debtor. I had observed that it was a poor venture, for while on paper it appeared that it was paying divi- dends, it consumed too much time and attention. For 126 PLAN SEVENTY-FOUR this I secured $1,500. He was quite willing to sell the property when I made it plain to him what its possession really meant to his business. "I stayed a week with him, and when I left I had col- lected almost enough, in cash and notes, to settle the account. To make up the balance, I persuaded him to return certain goods. "This merchant later failed and a sheriff became his 'sales manager.' " PLAN NO. 74 "IN ALMOST EVERY INSTANCE THIS 'C. O. D.' PLAN WON OUT" This plan v»ll remind you of Plan 6. It's true that they are somewhat alike — and both success/id. "It's been my experience," says the credit manager for a Kansas City department store, "that many people who have plenty of money are often as slow, if not slower, than those who have but little. We find this to be true with many of our customers. "At times it becomes a serious problem to know just what to do. To dun them too hard often not only irri- tates them, but causes them to trade elsewhere. The plan which has worked the most successfully is what we call our 'C. 0. D.' plan, and in almost every instance it accomplishes the end we are after. "For instance, a customer whose credit is perfectly good, but who becomes forgetful at times, allows her account to drag thirty days behind, and then, without heeding our letters, comes in and orders more goods. "Our plan commences to operate when the purchase slip comes up for an 0. K. to me. I note the condition of the account and instruct that the goods be sent C. 0. D. Next morning the driver rings the customer's" door PLAN SEVENTY-FOUR 127 It often pays to try "something different" — no matter what that "something" be, a funny story. Plan 63; a piece of string. Plan 79; a bit of melody. Plan 5S; a question mark and your initials. Plan 12; just a blue pencil mark. Plan 15; or but a short note that glistens vnth courtesy and sendee. Plan il. bell and asks, say, $20 for the package he brings. In- stantly she becomes indignant. There must be a mis- take, she insists. Her purchases are always charged. The driver, however, has no alternative — ^he must bring back the money or the goods. "He suggests, however (it is not the first time he has played the part) , that she call up the store by telephone and ask the credit man for an explanation. This is exactly what I count on and in answer to her call I pretend to take a hurried look at the books and then explain. Her account, I note, is considerably overdue. Probably some subordinate in the department, unappre- ciative of the extent of her patronage, has held up the charge ticket. Of course, it is unfortunate, the store apologizes and the driver is called to the customer's telephone and told to leave the package. It's, of course, a ruse, but a justified one, I think you'll agree. "The customer receives her goods in triumph, but she has also received a mental jolt regarding her delin- quency and I have an opportunity to speak of it per- sonally, a thing I could not very well do without such an excuse. A day or two later a check is pretty sure to find its way to my desk." 128 PLAN SEVENTY-FIVE PLAN NO. 75 ITS ORIGINATOR SAYS THIS PLAN ELIMINATES GUESSWORK The man who vxyrhed out this plan says that it has saved time in many instances which is a perfectly good rec- ommendation, don't you agreef "When it comes to credit I cut out the guesswork," says a successful Michigan retailer. "If the wholesale houses knew no more about their debtors than many of us do about ours, they would not last through the best of seasons. "When I started to get a firmer hold on my credit accounts I bought a filing cabinet and a stack of regu- lation filing cards. In that cabinet I now have all the information I can get about practically every family in our county and some in adjoining counties. "First I went over the tax list, next I got the list of the subscribers to the local newspapers, and finally I sent a man to neighboring towns to inquire among the bankers and merchants. This work also added to my mailing lists for special sales. Each season I bring the lists up to date. "I put the names on one side of the cards, with the credit estimate in small figures in pencil at the top left- hand comer. On the other side of the card goes all the information I can get on property, income, responsi- bilities, debts, firms owed, references, and the like. The cards are filed alphabetically. "I hold to the estimated credit allowance through thick and thin, unless special arrangements are made. If during the month it appears that a customer is going to exceed the estimate, I write to him and explain that I can only carry so much credit business and that he has about used up the portion of it allotted to him. I PLAN SEVENTY-SIX 129 then ask him not to exceed the prearranged amount until special arrangements have been made. And I am always exceedingly reluctant to make special arrange- ments. I believe the time to collect accounts is before they become top heavy, and my plan for watching them has saved me losses in many instances." PLAN NO. 76 HERE'S AN OLD FRIEND— THE GENTLE REMINDER It's usually the small accounts that swell your "bills re- ceivable." If the "genjUe reminder" with which you are endeavoring to gather them in is worn and threadbare, perhaps this plan imll give you a new idea. A supply dealer in Memphis is compelled to carry a large number of small accounts and often experiences trouble in collecting them. The following letter proved a very successful means of holding the total of these amounts down. Many of them amount to less than a dollar, so a coin card is enclosed. JUST ONE MINUTE, PLEASE! YES. THIS IS A CIRCULAR, BUT DON'T GIVE IT THE CUSTOMARY TOSS INTO THE WASTE BASKET. THINK JUST A MINUTE! ISN'T THERE SOMETHING THAT YOU HAVE BEEN TRYING EVERY DAY TO REMIND YOURSELF TO DO? Why, yes! That little balance for which we billed you. You were glad that we didn't delay your order to write you for the small amount. You received a statement the first of the month and have been intending to take care of it, but each day it has slipped your mind. You have no idea how many others have been forgetting, too, or how large the total 130 PLAN SEVENTY-SEVEN sum involved is. It is almost the end of the month, and the people who make supplies for us, and for you, will be calling upon us for their "balances due." Now that this reminder is right before you, suppose you slip the amount into the enclosed envelope, put a steimp on it and drop it in the box at once, so that it will reach us by the coming Wednesday, and thus reduce the unpleasemt "bills receivable" account in our monthly report. If there is any mistake, please tell us about it. The response was immediate and extensive, and sev- eral of the debtors — in remitting — commented pleasant! on the "reminder." PLAN NO. 77 THIS "SOMETHING-FOR-NOTHING" PLAN COLLECTED 67% OF THE ACCOUNTS OUTSTANDING When a firm needs the money badly "all hands" look to the eoUection manager to "pidl them out of the hole." With this plan the collection manager for a jewdry house saved the day by collecting 67% of his outstanding ac- counts in a hurry. "When emergencies press for new resources, the credit man is usually importuned to get something out of his 'quick assets,' " says the credit manager for a western instalment house. ' ' He is between fire and the deep sea. At such times custom^ers are about as anxious to keep their money as the firm is to get it. Once when such an emergency arose, I used the following plan wilii success. "It was a 'something-for-nothing' plan and consisted of an extra award given to those who would pay instal- ment accounts in a lump sum. I got in touch with a PLAN SEVENTY-SEVEN 131 publishing house and secured an offer of a dictionary, specially edited for office use, at a very low price. Then I wrote this letter: We need money, but it is hardly fair to ask for it quickly from you without making some return. Here's our proposition: we will send you a good dictionary of 1,467 pages par- ticularly edited for the use of business men, if you will send us within three days eighty-five per cent of the amount that stands due us on our books. Of course, we could use one hundred per cent, but we are only asking our friends for the least we can get along on. There is no follow-up on this. You won't be asked twice. We need the money, but we're not out to pry into your safe. We know you will help with the eighty-five per cent, and we have decided to make the concession outlined above to show our ap- preciation for getting it quickly. We're in trouble if it is not mailed within three days. P.S. The dictionary sells for J5.00. "The letter pulled. Its straightforward appeal, and the idea of asking for only eighty-five per cent of the amounts due, secured favorable attention. The majority of those who sent checks paid in full. We had calculated that forty-five per cent of the accounts payable would carry the firm over the emergency. I secured sixty-seven per cent from my letter asking for eighty-five per cent. Many of those who received the dictionary wrote that they were glad to have it. All in all, the incident built good will instead of tearing it down, as an imperative demand for money would surely have done." 132 PLAN SEVENTY-EIGHT PLAN NO. 78 THIS LETTER HAS COLLECTED "HOPELESS CASES" Even when it seems that nothing short of a lawsuit will Umsen up a debtor's purse strings, the dealer referred to in the three preceding plans still relies on his own ability to get the money. In this plan you will find one of his most effective letters. The "cash up" plan described in the preceding plan having failed, this dealer still has confidence in his own ability to collect money. "I have learned that it never pays to give up, ' ' says he. ' ' Take, for instance, a case where my 'cash up' plan has failed to work. "In such cases, a good personal appeal may collect the money. Supposing, of course, that the debt is a just one, there is still a chance to touch the men's sense of respect for the square deal. "One method I use is to put the case up to the delin- quent on a 'make good' basis. The touch of effective intimate attention is given in this manner: This morning the credit man shoved me a list of all accounts on the books showing more than two payments in arrears. "Turn them over to our attorney," he said, "any buyer who gets that far behind doesn't intend to pay." "r can't agree with you," I said, "these people are good and I'm sure of it. Give them ten days and they'll prove it to you." Was I right? You still owe us a little balance of $9.00 -- three instalments. Surely after going as far as you have you are not going to flunk out -- you are not going to compel us to tell the judge about it in order to PLAN SEVENTY-NINE 133 get our money. Of course not. Write a check for it now and shov the credit man that he is mistaken. Don't bother to write a letter. Just wrap the check in this sheet and send it now. PLAN NO. 79 "I FORGOT" IS AN EXCUSE YOU MEET EVERY DAY. KILL IT WITH A STRING Did you ever think of using a string to make coUectionsf Perhaps not, but down in Texas there is an enterprising dealer who did. He says he has never found a more prof- itable use for string. A progressive Texas merchant noticed his wife tying a piece of string around their son 's finger. Upon inqviiry he learned that the boy was going out to play and the string was to remind him that before he returned home was to stop in at his grandmother's for a package. "That's a good idea and I'm going to use it to help my debtor remember," said this merchant as he left for the store. He wasn 't there long before the details of his unique collection plan were all worked out. Here is the letter he wrote — you will have to furnish the string : When I was a boy and used to forget things, my mother tied some string around my finger so that I would remember my errand long enough to fulfill it. I sup- pose your mother did the same with you. Sometimes it works well with grown- ups, and so we are sending a little string herewith. Won't y6u wrap it around your finger and at the same time say to your- self: "I am going to send H. L. Harris $15.00 that has been due him for quite a little while back now?" You will find it works. Try it on yourself — and let us have the check 134 PLAN EIGHTY right away so that we can get it in this month's business. "I never thought a simple piece of string could make such a good collector, ' ' said the merchant, "until a few days after the letter was sent out. Three people called the day after it went out and settled in full — and com- plimented me on the idea. It is the most successful col- lection idea I ever used. PLAN NO. 80 IN ONE CASE THIS PLAN SAVED $1,000 Experience taught this merchant Ike foUy of expecting more than he knew the customer could pay. So he forced payment in the manner outlined in this plan, and suc- ceeded in collecting the entire amount. "A limited range of information about your credit customer will not do," says a Seattle merchant, "for it is only by knowing all about a man that you can judge him accurately. I know many of my customers inti- mately; not only their business affairs, but as much about their social affairs as possible. All these are credit assets or liabilities, and the sum of them tells the credit man when to draw the line and collect the balance due. Often I secure this information by personal visits to the towns where doubtful customers are located. ' ' I went to a town at one time where a merchant owed us $1,000. A brief observation of his business con- vinced me that his trade was falling off and his enter- prise waning. I felt certain that he could not keep his head above water very long, although nobody told me so, and I asked no direct questions. I knew that if I gave the alarm we would lose our money, so I merely said to him, 'Jones, we need the cash, but we don't want to embarrass you. We are not going to draw on you for any large amount at one time, but we are going to draw PLAN EIGHTY-ONE 136 as often as we think you can pay a fifty-dollar draft.' "I went home and got out the first draft, which was p£iid. In a few days I drew again. Jones dug down into his cash drawer once more. He did not want to refuse so small a draft. In this way I kept working the indebtedness down, and Jones, expecting the little drafts, was bending all his energies to raise money enough to meet them. Meanwhile, he was buying from hand to mouth of others who had not yet sized up his affairs. He probably reasoned that the promptness with which he met our drafts gave him standing at the bank — the confidence of a banker is usually the first concern with a merchant whose credit is getting shaky. PLAN NO. 81 THIS PLAN SAVED SEVERAL HUNDRED DOLLARS Rather than allow the statutes of limitation to outlaw an account, a Nevada merchant secures a judgment against his debtor. Should the debtor later acquire property, this judgment enables him to realize on the account. "The best collection pointer I ever got," says a Nevada merchant, "came to me through my attorney. I put an account into his hands that was fast approach- ing the outlaw date. He brought suit and secured judg- ment without delay. Then we waited for a favorable time to collect. In the course of the year, the debtor acquired some property and we made the collection in fuU. "If we had not obtained judgment at that time we could never have collected the money, and, on my law- yer's advice, I turned every one of my lapsing accounts into judgments. This keeps them on the list of possi- bilities for a number of years and has been the means 136 PLAN EIGHTY-TWO of adding several hundred dollars to my collections. I keep an account alive as long as I can by getting a payment upon it, no matter how small, and when that fails I sue for judgment before the account is outlawed. This is not very expensive and it gives me several more years to work in. "When an account is so small that I cannot resort to legal means to collect, I look around town for another merchant who has an account against the same man. By combining the two, we can usually take advantage of the law. I do not believe in using the courts except as a last resort, but it is a mighty good step to know your rights and to know what methods can be used when necessary." PLAN NO. 82 "I HAVE FOUND THIS LETTER VERY SUCCESSFXJL" A Western credit man says he has given this plan a thorough trial and that it works often enough to be very valuable to him. "A great many business men believe that a lawsuit is the most effective method of forcing collections, when, as a matter of fact, it is not only the very last resort of a good collector, but invariably it is the most costly and, in a large percentage of cases, the least produc- tive," says this credit man. "All attorneys and collection agencies charge a larger fee for collecting judgments than they do for other accounts. It is my experience that once a judgment has been secured the real collection work must be started all over again. If the judgment cannot be collected without further suit, additional court fees are necessary, all of which not only increase the collection cash, but also PLAN EIGHTY-TWO 137 increase the ultimate loss in ease the debtor is proof against execution. "It's my experience that you can get more in such eases by showing a disposition to meet the debtor half way than by threatening him with further suit. I have found this letter very successful in bringing such debt- ors into my office to talk over some method of satisfying the judgment against them : We desire to settle all accounts in a peaceable manner and always do so whenever the debtor shows an inclination to do the right thing. We are writing you now, trying to avoid any further legal action. Can you afford the costs of a garnish- ment or an execution? Wouldn't it be better to apply that money to your account? Probably you would not care for any noto- rious advertising of your affairs among your friends and neighbors such as would be in- cidental to the appraising, moving or sale of your household goods or other effects by a constable. A judgment will hold good indefinitely by renewal and interest accu- mulates on it until paid. It may create havoc at a time when you are less able to stand it than at the present time. We do not intend to frame this judgment and hang it on the wall. This judgment was secured to aid in collection, and regard- less of costs (remember you pay them in the end), we will see that this judgment ful- fills its purpose. Disregarding this notice and assuming a hostile attitude will only increase your troubles, therefore let your better judg- ment prevail, call at once, and let us cooperate on settling this account. 136 PLAN EIGHTY-THREE PLAN NO. 83 TWELVE POINTED QUESTIONS THAT MAKE DEBTORS THINK In this plan you wiU find another letter which a Western manufacturer who contributed severed plans for this book uses effectively in cases where milder letters fail. "It very often happens," says this manufacturer, "that a delinquent debtor who has paid absolutely no attention to a dozen or more collection letters, can be shamed into settling his account. But to accomplish this it is necessary to so thoroughly convince him that he has disregarded all the laws of fair play, that after reading your letter he stands convicted in his own mind. It is my experience that threats have no place in such a letter. One of my successful letters of this kind con- tains twelve pointed questions for the debtor to answer, A few fair questions for attention: 1. Did you order goods from us some months ago, on a signed agreement to remit $5 for them within five days (provided you did not within that period mail them back)? 2. Do you owe us that $5 or do you NOT owe it? 3., Have you paid the bill? If so, when and how? 4. Do you intend to pay for the goods? 5. Do you think you ought to make good your agreement? 6. Did we fail in ANY way to make good OUR part of the contract? 7. Have YOU made good YOUR part? 8. Do you INTEND to make good? 9. WHEN will you do it? PLAN EIGHTY-FOUR 139 10. Have you decided to REFUSE to pay the bill? 11. Do you think that a court of appeals (either through legal law or the Post Office Department) would uphold US in our claim --or would it say YOU had a right to obtain the goods and not pay for them? 12. In ignoring our many requests for settlement of account, does your sense of SQUARENESS tell you that YOU are doing right? Enclosed is a stamped return envelope -- for the $5 which we expect will come by return mail. PLAN NO. 84 HERE'S A VARIATION OF THE "I-NEED- THE-MONEY" PLAN THAT WON This is a plan vrith a "There's a Reason'' angle that is compelling. Of sixty-three letters sent