Music Trade Review

Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
NOVEMBER 21,
1925
THE MUSIC TRADE
REVIEW
11
Music Dealers' Instalment Sales and
Their Collection Problems
What Do You Know About Your Instalment Customer—The Public Service Corporation as a Valuable
Tracing Source—How to Obtain Information From the Banker—The Farmer and the Property
Record Sheet — Use of Public Records — Eighth of a Series by J. K. Novins
I
T is indeed surprising the number of sources
of credit information that are open to the
average music dealer! Whether the music
store is situated in a big city or in a cross-road
village, he has equal access to many of these
sources. These information sources not only
aid the music dealer to decide when and to
whom to extend credit, but they are also used
to help collect his outstanding accounts. An-
other thing very often overlooked is that many
of the credit information sources have definite
sales value. The enterprising music dealer can
use them to advantage to increase his sales and
widen his selling territory.
During a tour of many cities and country
towns the writer attempted to list the more im-
portant of these information sources. In most
instances the writer found that retailers use
them only for collection purposes, a good many
of them entirely overlooking their sales value.
The Public Service Company
Consider this source of information—the gas
and electric light company in your town. What
a wonderful source of information for tracing
delinquent credit customers! In one big city
the credit manager of the public service com-
pany invited the writer to the record room. In
a big vault were stored hundreds of thousands
of record cards, each containing the history of
a resident. The credit manager then showed
the writer the voluminous ledger records, on
which were shown the paying habits of all resi-
dents for many years back.
Perhaps you want to know whether John
Jones is a good credit risk. The credit manager
of the local public service company can tell you
how John Jones has been paying his gas and
electric bills for the past five, or ten, or twenty
years. Or, perhaps you want to know the pres-
ent whereabouts of Sam Smith, who owes you
money but has changed his address without
notifying you to that effect. The publnc service
company can tell you where Sam Smith has
moved. The record of the meter transfer tells
the tale.
In one Western city the retail merchants be-
gan to make use of this wonderful storehouse
of information. The credit manager of the local
public service company felt inclined to co-
operate, until, one day, someone thoughtlessly
abused his confidence, and from then on it be-
came more difficult to get the information. The
credit manager refused to honor inquiries over
the telephone.
Some retailers succeeded in getting the in-
formation through the medium of correspond-
ence. More recently, the manager of the local
retail credit men's association bureau effected a
special arrangement with the public service
company that all such information be secured
by his office for the retailers.
Keep Information Source Confidential
This brings to mind the necessity of treating
such information in confidence. All retailers
know that the banker, especially in the rural
community, is a prolific information source, yet
many find the banker difficult "to open up." The
fact is, the banker will willingly furnish valuable
information about certain residents, provided the
source of information is not disclosed. Unless
the banker is .convinced on that point, you might
as well not try to approach him on the matter.
Very often a violation of confidence is fraught
with imminent danger. A libel suit may result.
Experienced credit men know the value of con-
fidence when securing credit information. At-
tend the meeting of a group of retail credit men
in any city and you will hear them discuss cer-
tain credit prospects by name, relating their ex-
periences with these credit customers and pros-
pects. As they discuss these people the credit
men will make notations on slips of paper. But
in no event will you find the name of the credit
man's concern printed or written on this credit
report. There is danger that the slip will be
lost, or pilfered, and were the name of the con-
cern imprinted on it a beautiful libel suit would
result.
Recently the writer visited a retail store in an
Iowa city. The credit man showed the writer
his record of the paying habits of various cus-
tomers. Some of the remarks he scribbled on
the blanks were far from being complimentary.
But the name of the store did not appear on
the record cards. Should such a record, by any
chance, get lost there would be no chance of
the concern being involved in a libel suit. The
credit information found on a record card will
often be sufficient to hurt a man's standing in
the community were such information to be
made public.
A valuable source of tracing delinquent cus-
tomers who have moved are the other instal-
ment houses in town. The chances are that the
skip has been trading with one or more of these
concerns, and they will be pleased to tell you
of his present address.
Importance of Rural Information Sources
The need for proper use of information
sources is more acute in the farming districts.
First of all, the crop conditions furnish an index
to the music man whether to extend credit liber-
ally or whether to tighten up. Second, the
farmer now has his automobile, and in one day
he will trade in stores within a considerable
radius, so that it is now all the more necessary
for the country merchant to keep track of the
customer's buying habits in the various stores
in the territory. Third, the harvesting season
is accompanied by migration of floating labor,
on which there must be some check if the coun-
try merchant is ever to collect his outstanding
accounts. Likewise, a bad harvesting season
will witness unemployment of farm labor, with
the resulting danger of bad collections and the
passing of bad checks. Fourth, the farmer in
many agricultural districts is heavily mortgaged,
and unless the country merchant, or the neigh-
boring city merchant, consults public records
about such indebtedness and takes the neces-
sary precautions to guard his own accounts he
will be the last man to collect, even after court
litigation.
To determine the farmer's paying capacity
the rural merchant draws on a number of
sources of information.
The Farmer's Income
He has access to the public records in the
county offices. One of the most valuable in-
struments is the property record of each resi-
dent in the county, which the merchant can se-
cure from the assessor's office. The music deal-
er ought to find the "Property Record Sheet"
especially useful, from a sales as well as a credit
standpoint, as on this sheet are listed the farm-
er's property and property improvement value,
household goods, automobiles, machinery, live
stock, etc.
As to the extent of the farmer's income from
his farming operations, the music dealer can
secure the necessary data from the condensing,
canning, dairy and grain elevator companies.
Thus, in Weld County, of northern Colorado,
the credit association secures, annually, from
the sugar beet plants, as well as from the con-
densing, dairy and canning outfits, the average
monthly income of each farmer. This informa-
tion is filed away in the bureau office, and from
there is disseminated to the individual mer-
chants whenever needed.
Of equal importance are the county records
of bankruptcies, building permits, mortgages,
extensions of mortgages, warranty deeds, deeds
of trust, releases of deeds of trust, receipts of
inheritance taxes and assignment of wages. As
a rule, instalment sales records can be gotten
from the county offices, and these are of par-
ticular interest to the music retailer, as he knows
to what extent his customer has encumbered
himself to the automobile, furniture and other
instalment retailers.
The Credit Association
Were the music merchant to get all this in-
formation direct from the county offices he
would have little time left for his own business.
Therefore, the well-organized credit bureau
gathers this information and makes it available
at all times to the local merchants. The Weld
County Credit Association publishes a weekly
and daily bulletin, in which all this information
is recorded, as well as a record of suits and
judgments in every court in the county, even
divorce cases, as well as matters coming up
in probate court, together with dates of ad-
justments. Other matters given in the credit
bulletins are marriage licenses, accounts placed
for collection, skips, removals, new residents, a
list of those delinquents who are now paying
their accounts, etc.
Of special importance is the information re-
garding assignment of wages, as under such cir-
cumstances the music merchant has no legal
way to collect his account. The Weld County
Credit Association informs the merchant when
wages have been assigned, to whom assigned,
for what period assigned, the amount and by
whom assigned. From land owners the Asso-
ciation secures information about tenant farm-
ers and their farm laborers. The Association
also has a representative who makes the rounds
of the stores in the various towns in the county,
copying from their books names of customers
and their paying habits. From the postmasters
in the various towns the Association secures re-
vised lists of those receiving mail, together with
their present post office addresses, and these
lists are furnished free to the retailers. To the
music merchant such lists "have excellent sales
value, as they can be used for sending sales
literature.
An interesting development in Greeley, Col.,
is that the Merchants' Credit Association will
refuse to give credit information to the mail
order houses. Sometimes a mail order house will
write to a banker or direct to the association
for information about certain residents. As a
rule, the local bankers will turn over such in-
quiries to the credit association. Where it is
known definitely that the inquiry comes from a
mail order house the matter is not given any
attention. At times the source of inquiry is
someone acting for a mail order house, and
where this is known, or where there is the
slightest suspicion of such imposition, the in-
quiry is ignored.