Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
OCTOBER
17,
1925
THE MUSIC TRADE
REVIEW
11
Music Dealers' Instalment Sales and
Their Collection Problems
Opening and Closing the Instalment Sale—Need for Co-operation Between Sales Force and the Collec-
tion Department—How to Prevent the Salesmen From Misrepresenting Terms — The "Confirmation of
Sale" Letter—Co-operation That Secures Better Terms—Third of Series of Articles by J. K. Novins
T
H E instalment sale is a highly delicate
process and it demands skill and the co-
operation of the entire sales force as well
as of the credit department. A bad move or
apparently inconsequential remark by the sales-
man will often endanger the early collection
of the account.
There is need for close co-operation of the
salesman and the credit department. The fol-
lowing incident, related to the writer by a
prominent business man, will illustrate a con-
dition which often occurs in even the best-
governed retail stores.
For several months the business man had been
diligently solicited by the salesman of a retail
store to purchase a radio outfit. The business-
man finally capitulated, but with the distinct
understanding that he would have the time-
payment privilege, and to this the salesman
readily agreed. Before sixty days were over,
however, the business man received a curt note
from the credit man of the retail store inform-
ing him that his radio account was overdue.
In a moment of anger he scribbled over the
face of the letter: "Consult your salesman on
terms," and sent it back to the store. Presently
the thing was straightened out, but the cus-
tomer was by no means entirely appeased.
Possibly it was the fault of the salesman, or
perhaps the credit man had made an error,
but as far as the customer was concerned it
was the fault of the store.
Should Salesman Talk Terms?
That such incidents are by no means uncom-
mon is shown by the fact that many retail
stores adhere to a strict rule that the sales-
man should not talk terms to the customers,
but that such matters properly rest with the
credit department. Furthermore, they impress
on the customer the fact that no verbal agree-
ments will hold good, that the management
should be held responsible only for the terms
stated in the sales contract.
In one instalment house there is a standing
rule that a salesman responsible for talking
terms to a customer should be dismissed from
service. This rule is never violated.
A practice adopted by the Knight-Campbell
Music Co., Denver, Colo., aims at two things:
to eliminate the possibility of the customer not
fully comprehending the sales terms, and to
discourage salesmen from
misrepresenting
terms to the customer in their anxiety to make
sales.
Shortly after a sale is consummated this con-
cern sends the customer a "Confirmation of
Sale" blank on which are recorded the terms
of sale as well as the facts about the articles
purchased. The customer is informed how
much she paid down and the balance due, with
notations how this balance is to be paid. She
is then informed that an interest charge of
8 per cent is payable after a certain maturity
date, and that this interest charge will be dis-
continued in the event the full amount is paid
by a certain date. At the bottom of the blank
this is printed:
"Kindly advise us at once if above does not
agree with your understanding of the terms of
the deal.
"Notice of amounts due will be mailed to you
in advance. Please return notices sent to you
with your remittance."
The customer has a chance to "come back"
if she feels that the terms noted on this blank
were not those explained to her by the sales-
man. The second paragraph is very important.
Like other music stores the Knight-Campbell
Music Co. has the problem of synchronizing
charge and instalment accounts. Very often a
Schmidt, who reports conditional sale to you as
follows:
"Cable & Co. Piano No. 253502 and
Bench
$375
"Carrying Charge
28
total price $403, on which has been paid $60
and the balance is payable at the rate of $4 on
the Saturday of each week commencing Novem-
ber 29, 1924. The note matures November 1,
1926, and any unpaid balance draws interest at
Brnurr. Salorabn
the rate of 7 per cent per annum from that
date.
CONFIRMATION OF SALE
"Please read the terms of your contract care-
fully to make sure there is a correct under-
To
standing between us. It has always been the
policy of the Schmidt Music Co. to have no
We acknowledge with thanks contract signed by you for the fo
verbal agreements differing in any way from
ing purchased thru our
that which is written or printed on the contract
$
or signed guarantee.
"We have arranged to have the insurance
policy issued as provided in your contract for
the terms of the note. This policy will take
Total Contract $
effect at once and may be paid with your next
Credits . . . $
monthly instalment.
Balance Due - - S
"The purpose of this letter is to express our
thanks and to verify and make clear to you all
Balance payable as follows
terms of the transaction."
How to Get Bigger Down Payment
While
the credit manager in the retail store
With 8% simple interest from
has the final say as to how much the customer
Inlervsl will be discounted if paid in lull an of bejwe
should pay down on the instalment purchase,
he places great dependence on the salesman.
At one instalment concern the salesmen are
instructed to find out tactfully how much a
customer is prepared to pay down on a pur-
fcnuiht-£nmpbrll JBUBU (CO.
chase. Most time this information will come to
the salesman without the latter making any
effort to find out from the customer.
'
Knight-Campbell Confirmation of Sale
While
talking
to
the
salesman
the
customer
customer will maintain both kinds of accounts.
She will make a payment without making plain might notice something she would like to pur-
whether that is to be credited to the charge or chase. She might say, "I would like to buy
this if you will let me pay down $100, which is
instalment account. When the customer returns
all I can afford to pay down."
the remittance with the store's notice such pos-
It happens to be a $500 purchase.
sible confusion is avoided.
"Suppose you arrange that with our credit
Reminding Salesman of Sales Terms
manager," the salesman will say. "I know he
The "Confirmation of Sale" is made out in will be reasonable. Just a moment, I'll get him
triplicate. One copy goes to the salesman and
to see you about it."
the third copy to the office file. The following
Out of hearing of the customer the salesman
is printed on the salesman's copy:
tells the credit manager the customer is willing
"To Salesman:
to pay $100 down on the sale. When the credit
"This copy of our formal acknowledgment manager sees the customer the following con-
of this deal to our customer is our acknowl- versation takes place:
edgment to you that this contract has been
"How much do you feel you can put down?"
received by us, for which we thank you. Please the credit manager asks, presuming ignorance
note terms and conditions of deal and notify
of what she told the salesman.
us promptly if not correct."
"Well, what are your terms?" the customer
If the salesman upon receiving this notice counters.
feels that the terms outlined thereon are not
Ordinarily the credit manager would ask $50
the terms he represented to the customer he or $75 down on the $500 instalment sale, which
reports the matter to the management, which
would make 10 per cent or 15 per cent down,
has time to straighten it out with the customer but knowing of the customer's intentions he
before it gets to the point of causing difficulty asks $100 down. He gets a higher down-pay-
between customer and management.
'
' ~ nient and the customer is mighty well pleased.
On the reverse side of the "Confirmation of
Let Customer Suggest Terms
Sale" blank is printed attractive reading matter
This brings to mind the fact that you can
of sales value.
often secure better terms by letting the cus-
tomer suggest the terms. One credit manager
Letter Confirming Sales Terms
The Schmidt Music Co., of Davenport, la., makes frequent use of this idea. He has found
sends a letter of confirmation of terms to the that the average customer will not usually ask
customer shortly after he has made a pur- for as liberal terms as the credit manager
chase. A letter acknowledging a piano sale in his anxiety to effect a sale would ordiparily
offer. The customer generally "goes orifi bet-
reads as follows:
"We wish to thank you for your kind patron- ter" for fear of being tufne"d ,down were she
{Continued on pagel&) •
age given" tis through our salesman, Mr. Carl