CREDIT CORNER

Writing Credit & Collection Letters -- Part IV

 

 

Insufficient Funds Check

Comment:  A returned check marked "insufficient funds" is nearly always as embarrassing to most customers. Frequently a customer tries to pay too many bills at one time. If the customer is notified in advanced and given a "face saving" out for the predicament, good will toward your company will be retained.

 

Example 8

The (name of customer's bank) has returned your check for $(   ) unpaid and informed us that the check (date) cannot be honored.

 

Since there is always a possibility of a mistake or a misunderstanding, we have redeposited your check.

 

Please arrange for the check's prompt clearance. If there is something, which we are not aware, we will be happy to have your comments so that we may continue to cooperate with you to the fullest.

 

 

Example 8A

Has a mistake been made? Your check for $(   ) (date) has been returned by your bank marked ("insufficient funds" or "no funds").

 

Since there is the possibility of an error, we are redepositing your check. Please call your bank to make sure your balance is straightened out, and your fine reputation retained.

 

 

Granting Extension and Establishing a Payment Plan

Comment:  A debtor should be granted an extension of time when a good reason is given, or, if it is actually impossible to collect anything on the account at the present, although there is hope for the future payment. Grant the extension graciously, but definitely indicate that such procedure is an exception. Also try to suggest the establishment of a regular payment plan for the future.

 

Example 9

We are aware that business in (location) has been slow. You must, however, realize that we have been overly patient in waiting for your payment of $(   ) which is long past due.

 

Your request to postpone payment until the entire amount can be paid is understandable. But why not show your appreciation of the courtesies we have extended by making a part payment every two weeks?

 

May we suggest (number) installments of $(   ). Please send the first payment of $(   ) now, and then another $(   ) in two weeks, and so on. Your account will soon be paid in full, without hardship. At the same time, you will retain your credit rating, something that we are sure you are concerned about.

 

So, won't you please send your first check now?

 

 

Example 9A

We acknowledge your letter of (date) and appreciate the frank manner in which you have taken us into your confidence regarding your financial status.

 

Even in the most efficient business, a situation can develop beyond anyone's control (such as your unexpected cash problem). Any custom who truthfully explains such circumstances, such as you have, can rely on our fullest cooperation.

 

We have noted that we will be hearing from you by (date). We earnestly hope that business will have improved by then so that a payment of $(   ) will be possible.

 

Meanwhile, be assured that your credit standing with us is not in jeopardy. You see, we regard you as one of our valued assets -- and we want to keep it that way.

 

 

Friendly Payment Request

Comment:  All variations of the "reminder letter" say about the same thing -- "We want your check!" But some say it in a friendly ton -- the tone that gets the best results. If the "reminder letter" is just that, and nothing else, it will show consideration and reasonableness, which could not offend even the touchiest customer.

 

Example 10

Occasionally, almost anyone of us is likely to need a friendly reminder to do something we had already intended to do -- but just forgot.

 

That's why we are writing to you -- to remind you that under the terms of our sale, the amount shown on the enclosed statement (or above) is now past due.

 

We'll appreciate your check, now.

 

 

Example 10A

Just a friendly reminder, but ...

HAVE YOU FORGOTTEN SOMETHING?

 

No doubt at one time or another, we've all had occasion to be thankful for being reminded of something we've overlooked.

 

This letter is a friendly "tap on the shoulder" to remind you of your unpaid account of $(   ). You check, as yet, has not arrived. We know you'll appreciate being reminded.

 

Just put your check in the return addressed envelope and please mail it today. Then we can both for the matter.

 

 

Final Appeal Collection Letter

Comment:  In a "final" good will collection letter, one effective appeal is to the customer's sense of fairness. Emphasize that you have delivered satisfactory goods or services. At times, you may wish to imply that the customer has not treated you fairly, and, in justice, the customer should pay promptly and amicably. Of course it is always wise to explain how the customer benefits by paying the bill. Such appeals can be on the basis that one's credit reputation will be retained, that the customer really wants to be honored, or that future relations will continue to be mutually profitable.

 

Example 11

You have probably been through this same situation yourself.

 

After you have asked for a check many times (as we have done in your case), you wonder just how to ask one more time so that it will do the job of getting a prompt payment for past-due balances.

 

That's the predicament we're in now. We value you as a customer. But we also need money to operate so that we can continue to be of service to your customers.

 

Perhaps if we are direct; maybe if we simply ask "how about it?", you will get that check in the mail to us immediately -- before something else turns up that will take your mind off your account.

 

 

Example 11A

Our past experience has convinced us that a "final appeal" collection should be brief, friendly, and above all, SUCCESSFUL!

 

As you can see this letter is brief, and it is sent in a friendly attitude (we wish to retain your goodwill). Its success will be determined by your sense of fairness and prompt payment.

 

So, please send us your long over-due check for $(   ).

 

 

Last Resort Collection Letter

Comment:  The tone of the last resort collection letter should be, wherever possible, one of fairness and goodwill. There should be no hint of exasperation. There are times, however, when a forceful letter (sometimes signed by an owner or company officer) becomes necessary. Before writing one, it is well to obtain legal advice because certain types of threat and harassment are punishable by law.

 

Example 12

I'm happy to say that it's seldom necessary for us to turn an account over for collection. When circumstances leave us no choice, the customer is always informed of our intended action.

 

Neither you nor I want to see this happen. We pride ourselves on the friendly relationships we have established with our customers and a lawsuit would destroy that. We value your account, and are exceedingly reluctant to take any step that would eliminate that good will.

 

You will surely agree that we have been fair and most patient. However, the time has come when YOUR ACCOUNT MUST BE PAID. Unless you show some effort to protect your credit rating, I have no choice but to authorize collection action.

 

Please mail us your check immediately so that you can avoid this final step.

 

 

Example 12A

I have been asked to approve the placing of your past-due account for immediate collection. I have deliberately hesitated from taking such action so that I could send you this letter informing you of the seriousness of the situation.

 

We have made every effort to be fair and patient in requesting that you pay your account of $(   ). You must certainly, in all honestly, realize this. We have asked many times to let us know how we could cooperate with you in getting this matter settled amicably. You have ignored our previous requests. Thus, your silence leaves us no choice but to place your account for collection -- a step we would sincerely regret.

 

This is a final request for your cooperation.

 

May we please have your check for $(   ), now?

 

 

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