Dead Beat or slow pay customers...How do you deal with them?

[Beth n Rod 1,278]

One of the members on PWNA has had a problem with these types and asked for some insight and advice to remedy his situation with a non-paying customer.

I thought it would be an interesting thread to discuss here...How do you deal with them?

Rod~

[CCPC 26]

Thankfully I have not had many problems with this (yet). The most I've had are a few slow payers in which a phone call has resolved the issue.

[PressurePros 248]

I had a lady. I underbid the project intentionally because she had three kids, single mom and her deck was incredibly nasty. I went to her the morning we were completing that we would be finished by noon and that the remaining half was due upon completion. She looks me right in the eye and told me she would have the check ($750) When I knock up her kids say she had to run out and she would mail the check. I knew right away I was in trouble but I had a signed contract and a digital copy of the first half she paid.

I called her every day for a week. I remailed her an ivoice with a SASE. The second week I sent a personalized letter via registered mail. I explained to her that she was taking food from my children's mouth and how, as a parent, could she do that in good conciense. I call every few days (always messages) I offered her terms..never a call back.... The third week I informed her I was filing a contractor lien against her property. I called her the fourth week and told her the time was up and that on Monday I was filing liens, a civil action and criminal charges (an obvious bluff). It worked.. last Wednesday, to my surprise, I opened a letter and out popped a $700 check..the deadbeat still got me for $50

Since that day I will not discount a nickel to anyone, young, old or impoverished. It's unfortunate that losers like this lady (she drives a Mercedes SUV I later found out) spoil it for mankind. --Thanks

[squirtgun 122]

We have a commercial account(restaurant) that was 3 months behind consistantly.I told the GM there would be no more notices mailed concerning the matter.I instead would sit in his restaurant all day,everyday and let anyone who would talk to me know that I was there trying to collect the money that was due our company.

It took him about 3 minutes to round up a check,some cash and a written,sign and dated guarantee I would have the balance in the mail by weeks end(yes,it showed up by that friday).He now pays when services are completed and the same day I went to collect the past due balance he hired us to clean a rental property he owns and pre-paid for that.

I'm with Ken you take food out of my kids mouth ,I'll go old school on you sorry a$$ in a heart beat.

[tropical wave 22]

I've yet to have this problem, like Lance, just a phone call and there hasn't been any serious issues.....knock on wood, Im sure the day will come though....

Ken, do you always collect 1/2 on wood jobs before you start? I kind of like that, but don't really know how to "sell" that to folks.....

[squirtgun 122]

Michael,

Tell the customer the deposit locks in their date on the schedule and covers the cost of their stain etc.We have done the 50% down on wood in the past using those reasons without any questions from customers.

[tropical wave 22]

Michael,

Tell the customer the deposit locks in their date on the schedule and covers the cost of their stain etc.We have done the 50% down on wood in the past using those reasons without any questions from customers.

thats pretty good....I like it.....plus if you get stiffed, its better stiffed for 1/2 than the whole amount , I may need to take this approach....

thanks Scott

[PressurePros 248]

The way I word it is this.. Fifty percent of the project is due at the end of the first day's work. The remainder is due when the customer walks outside, looks at the work and likes what they see. I don't take deposits because so many people have been burned with contractors and I want them to feel secure using PP. Getting the fifty percent pays myself and my guys for the day's work and also pays for the materials and sealer.

After my dilemma with Mrs DB, I now stress to people that work cannot begin unless someone is there to hand me a check. I really hate having to do business this way, but it only takes getting burned once. My only outstanding balance right now is a guy whom held escrow to have his house cleaned (at stettlement) and I am waiting for the escrow manager to release my check. It's been two weeks and I made the guy sign a contract saying if I didn't get my money in 14 days from project completion he is on the hook for it.

[JFife 14]

Officer Mike,

Mine is the same as PressurePro. The key is, make it seem like you are doing them a favor. Important to come off bold and strong, probably like you must in your day job. We start talking contract, and I say, "Ok Mr. Smith, obviously we have to take money up front, but so that you feel confident giving me a check, I won't require it until the end of the first day. I want you to know and see that we are a professional operation, have the tools to do the job, and know exactly what we are doing, and you'll see that the first day. I don't want to take your check now and have you be edgy for the next week until we show up, and you are wondering whether we will or not."

About 50% of the time, they'll go ahead and give you a check at this point.

Regarding boldness, DO NOT say, "is it ok to give a downpayment today"?? You've gotta tell them the payment terms, just read straight through it like it is not a matter of discussion. Every now and then, someone will contest the dp. Dont freak out, this is not a red flag. Like PP said, they've probably been burned. If they insist that they only want to pay when the job is completed, this is a red flag. The fact is, this is uncomfortable for people to talk about, so just confront it bluntly and stay in charge. Don't let them set the terms.

[Beth n Rod 1,278]

How would you handle it for example, if a customer agreed to pay you when the service was rendered, and when you finished they didn't and avoided you? You had verbal agreement that the job was satisfactory...

Beth

[PressurePros 248]

How would you handle it for example, if a customer agreed to pay you when the service was rendered, and when you finished they didn't and avoided you? You had verbal agreement that the job was satisfactory...

Beth

See my post above. To cover yourself, have a written contractual agreement with details of the work to be performed signed by the homeowner, and before and after pictures. With these things in hand you have legal recourse.

[Beth n Rod 1,278]

Just curious....

How many check your client's credit, and if you do is there a certain job size (dollar wise) you do this with routinely?

Beth

[tropical wave 22]

Ken and Jon.....Thanks for the advice, the talk of deposits has been spoken about before, I like both ways, 1/2 up front, then like you guys said, lots of people have been burnt by contractors (happens way too often up here as well as elsewhere Im sure) and the first 1/2 after the first days transformation would put people at ease as they'd see the professional results....hmmmm, gonna need to put some serious thought into this.....

do people have a problem cutting 2 checks as opposed to one?

this is a great thread, keep em coming... :cool:

[wesley 15]

Just this past week we had a deadbeat customer. Talked to the lady the night before we were to start the job to remind her to put her dogs up and turn off the electric fence. I also reminded her to leave a check under floor mat at the front door and I would leave her an invoice when we finished. The next morning when we got there no check but we washed the house anyway since we made the trip. The job was only a $160 job so I wasn't too worried. That night after not hearing from her I called and after she said hello I introduced myself and she hung up on me without saying another word. Repeated phone calls no answer. This went on for two days, Friday night around 10:30 pm drove past house to make sure they were in town and they were,(I wasn't stalking them that late at night I was leaving from a high school football game just down the street) so the next morning I called the local sherriffs dept. and told them I was hand delivering a bill and asked them for an escort since I didn't know how they were going to react and to also keep me from doing something I may regret later. We showed up at the front door and they wrote me a check in about 30 seconds, there excuse was they were busy and hadn't thought twice about the check. Anyways long story short I am a man of principle and right is right and wrong is wrong the money wasn't the biggest concern here it was the fact that somebody tried to screw me. No written contract, only verbal and I was going to get my money one way or the other but with the local authorities standing outside everything went great!

[Beth n Rod 1,278]

Always make sure to check your state law to determine what you are allowed to ask for regarding down payment. For example, in Maryland you are allowed to ask for up to 1/3 down before beginning the work.

Beth

[K.J. Pressure Washing 14]

ANY job over $1000.00, I get 25% up front. If the customer has issues with that,(none so far..) I don't do the job. Always get a contract signed. I think it just makes sense and brings out the reality and seriousness of the deal.

[acidburn 14]

I require 1/2 down on all wood jobs. Rarely does anyone balk at it. But, like previously stated.....I go over the terms of the contract, and the terms are non-negotiable. I am nice about it....and frequently make exceptions (referals, repeat customers, etc)....but I also know how to hold my ground if I get bad "vibes" from the person, and walk away if necessary. I would rather loose the job than have to deal with the PITA factor of collecting. Commercial accounts provide enough grief with collecting....no need to add more grief with residentials.

FWIW....I often wonder about how others feel about this, but I would rather do residential work (it's just not steady year round). Res. is more gratifying, most people are actually happy and satisfied when you leave. With a lot of commercial (especially the larger corps.), the managers are like "yeah, you showed up and did something, bill us and you'll get your check in 30 days....maybe."

[tidyjet 14]

Wesley's idea of a police escort whilst serving a bill to DB is brilliant.

I filed against someone last week. Deck/strip job. Also did significant amount of surface cleaning (boadwalks and around pool). Anyways, customer claimed she didn't like the way the deck looked so she wasn't paying. I've offered to redo - to her satisfaction. She refused (interesting). We even negotiated a lower price that she could live with and leave it be. But then she changed her mind. Not happy with it so in her mind she's under no obligation. Mind you, there was all the surface cleaning she's happy with.

So, now I'm letting a judge decide. This is a major PITA; assuming I get a judgement in hand, I still have to collect. I'm expecting to have to put a lien on her property. Anyways, more fun and games and a learning curve in the school of life.

I gotta wonder. If our economy was based on 100% satisfaction (services or products), would it be able to function? Anyone can lie and say they wern't completely satisfied.

[The Rob 14]

I always get half down if the job is going to take more than a day or over $400. I figure that I work on trust. I trust them to pay me the second half of the money, and they trust me to do the job. Usually the first half down only covers materials anyways. I have been doing contracting work for the last nine years, and I have never had anyone have a problem with half down. So I would suggest for jobs over a certain amount (pick a number) get half down. Just my .02

[grimeawayok 14]

first a friendly call, then a demand letter, and then collections and or civil action

[Beth n Rod 1,278]

A verbal contract is only as good as the paper it is written on!

Some times people get lucky. I know we learned our lesson on this one years ago.

Now, we wont do anything without it being written down and signed. Call it stiff, but we are too busy to chase after so many who take advantage of the generosities and misplaced trust.

Rod~

[FullBlast 14]

I have a fella that it is just about a year now that I done it and I got$100 out of a $300 bill the interest is going to eat him up. I got on him atime or two but I'm getting ready to get serious with him. Maybe just show up some day with a helper and get a check or load up his Craftsman tool box as he watches!! Other than that fella I don't have much trouble.

[Deagol 14]

That's a big benefit to do exhaust hoods...just save a vacuum full of nice greasy water, and if the customer doesn't want to pay, they can have their grease back...all over their kitchen:)

Seriously though, I've only had one problem with this, and it was a corporate account. Payment got tied up at that end because of paperwork issues, but did get resolved without anything more than a few dozen phone calls. Most of my customers are COD.

[Washaway 64]

I must say, knock on wood, I've never had an issue that I can complain about. For the most cases it's just phone tag and honest forgetfullness on the clients' part.

However if I do have problems it's quite simple:

First is a couple of phone calls.

Second are mail or emails.

Third..........well..let's just say that I'm old school, being born in a communist country and all.

[StainlessDeal 16]

Third..........well..let's just say that I'm old school, being born in a communist country and all.

Does that mean you put them on a 5-year plan? lol:)

Sorry, sometimes I just can't resist temptation.