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REVIEW
THE
VOL. LXXX. No. 23 Published Every Saturday. Edward Lyman Bill, Inc., 383 Madison Ave., New York, N.Y., J u e 6, 1925
Single Copies 10 Cents
$2.00 Per Year
Figures on Repossessions and Terms
Show No Instalment Abuses
Low Percentage of Repossessions in the Retail Piano Trade Shows Without Question That Merchants Exer-
cise Care in Selling to Their Prospects—Steady Tendency to Shorter Terms Also a Strik-
ing Indication of This Condition—What the "Black Sheep" of the Industry Create
W
HOEVER may be behind the persistent
campaign against instalment selling
which is being carried on in the daily
press throughout the country, they have paid
but little attention to the great volume of the
sales which are made on this basis, concentrat-
ing their work on the exceptional cases in that
improvident class which assumes responsibil-
ities beyond its income despite the efforts
of the merchants who sell on such a basis to
eliminate accounts of this type from their
books. That these exist is unquestionable; but
that they are in a great minority and that they
obtain credit largely on false statements of
their financial worth is just as unquestionable.
The retail merchant who is unfortunate enough
to do business with a person of that type in
the long run suffers as much as the person does
himself, for in the end he is compelled to re-
possess his merchandise, an action which al-
ways tends to lower his profit and naturally in-
jure his business. No merchant wants an in-
stalment sale which will fail to pay out accord-
ing to the agreement upon which it is made;
when he has one of them it is a mischance, and
were the average person to be oversold beyond
his income, as those behind this campaign inti-
mate he is, the merchant himself could not
stay in business.
4.47 Per Cent of Repossessions
The retail piano trade, 82 per cent of which is
done upon the instalment basis, is a striking
example of the comparatively small number of
people who fail to live up to the agreements
they make when they buy upon the instalment
basis. A recent survey of the outstanding piano
leases of approximately 350 retail piano mer-
chants, located in all sections of the country,
which was conducted by The Review, showed
that with such merchants only 4.47 per cent
of the pianos placed out on instalments had to
be repossessed because the purchasers failed
to meet their payments. In other words, of
all the sales made by these houses, 95.53 per
cent were good sales, the instruments having
been purchased by people who were able to
meet their obligations. Slightly more than 90
per cent of these leases were paid out on time,
a figure that shows definitely that, in the retail
piano trade at least, overselling is the excep-
tion to a great degree, and but very few people
purchase pianos whose income is not sufficient
to meet the monthly payments to which they
bind themselves.
An Injurious Reaction
The attack upon instalment selling has a re-
percussion that is extremely important to the
r
HE campaign which is being conducted
in the daily press against instalment
selling is based primarily on the excep-
tional case which, for their own advantage,
those behind it have considered as the rule.
Figures covering the retail piano trade show
that in no case is the average prospective
customer being tempted to purchase more
than his income will permit him to pay for
within the time of the sales contract. They
should be used to counteract the injurious
effect which this publicity has already had
on the
trade.—EDITOR.
piano industry and which affects equally the
manufacturer and the dealer. The greatest
asset of this entire industry is the mass of
outstanding paper, behind which there are two
types of collateral, the instruments themselves
and the financial worth of the people who have
purchased them. Anything which tends to at-
tack the value of this paper has an injurious
effect upon the assets of the industry, makes it
harder for every individual therein to obtain
credit accommodation, restricts the natural ex-
pansion of the industry, and in the long run
raises the expense of conducting it. There is
no question at all that the publicity which has
been obtained by those who have made these
largely unwarranted attacks upon this type of
selling has already to some extent had such a
reaction, and if it is to continue unchecked and
without refutation this reaction will progres-
sively increase. Efforts have already been
made at Washington to enlist the aid of Gov-
ernment bureaus in the drive, a means that
would sharply accentuate a condition that is
already serious.
Shortening the Terms
Another indication that instalment selling is
being held within safe limits by the retail piano
trade is the fac-t that both maximum terms and
average terms upon which retail leases are be-
ing written are steadily being shortened. Ac-
cording to The Review's survey from which
statistics were quoted earlier in this article, the
average maximum terms upon which pianos are
sold at the present time are 31.81 months, and
the average actual terms upon which leases are
written are 21.75 months. These figures show
definitely that there is a steady trend in retail
piano selling to lower the time of the average
retail piano lease, both through larger monthly
payments and larger initial cash payments.
This condition could not exist were it a fact
that the retail piano trade generally is over-
selling its prospective customers and abusing
instalment methods in an effort to achieve
volume sales through undue risks.
The Black Sheep
The piano trade, like every other business,
has its black sheep. At the present time there
is no doubt that a certain type of advertising
in which terms as well as low prices are stress-
ed beyond what they should be has contributed
no little ammunition to those who are attacking
instalment selling. The consistency with which
certain retail piano houses have used this type
of publicity during the past several months has
of course created a certain amount of public
opinion to the effect that sales are being forced.
That a majority of these advertisements have
been simply "bait" has not been apparent to
people outside the industry. Such publicity is
injurious much beyond the competition it gives
to other piano merchants in the locality where
it is used; in fact, its worst injury is to the
piano industry as a whole, a thing that can be
easily demonstrated in the present anti-instal-
ment campaign.
The piano trade must always be based on
instalment methods of selling. The unit value
of the product is so large that its market would
be almost entirely eliminated were it necessary
to sell these instruments upon a cash basis. No
retail house which has tried this method has
ever succeeded with it. When instalment sell-
ing is unjustly attacked as it has been during
the past several months, and when behind that
attack there arc unquestionably ulterior mo-
tives of some kind, the industry itself can not
afford to remain quiescent and permit the basis
of its sales to be lowered in public favor.