The use of form letters, therefore, is not recon cilable with the sound theory that frankness and hon esty of statement is always desirable. Nevertheless, a series of collection letters which usually begins with a "Please remit" stamped on a duplicate statement, and ends with a notification that legal action will be taken, has its place, especially when comparatively little is known about the debtor. Such cases, how ever, ought to be few. A creditor seldom considers lightly the non-payment of a debt when payment is due; and honesty requires, as a rule, the omission of statements designed to compliment the debtor by try ing to make him think the matter is not seriously con sidered. Moreover, even if the matter is considered of little importance, it is usually unwise to say so.
When a collection correspondent is writing concern ing non-payment, if his attitude is right, his anxiety should be due to the fact that a contract is broken, and consequently one man is using money which belongs to another and the longer he uses it the greater is the injustice done. This should be the chief cause of serious consideration. If it is, for that very reason the writer will be optimistically confident of receiv ing payment. Direct, frank, honest statements that have a distinct ring of confidence in them are charac teristic of successful collection letters. The following letter is a good example: Dear Sir: Our record of your account shows a balance of $40, due since April 1st. According to agreement this amount was to be paid on the first of this month. Just put the inclosed statement with your remittance in the inclosed addressed envelop—and let Uncle Sam do the rest.
Yours very truly, That letter was successfully used by an insurance man in collecting many small accounts. It produced much better results than this letter: Dear Sir: May I call your attention to the inclosed statement of a small balance of $40, due on your account since April 1st. Your delay is no doubt due to an oversight, and we appreciate it very much if you will favor us with a remit tance by return mail.
Yours very truly; This letter does not arouse in the reader any desire to pay; rather it causes resistance. Its chief fault is the apparent eagerness to avoid giving offense. In the letter first quoted above, the expression, "let Uncle Sam do the rest" gives the necessary touch of good nature. It clearly suggests the writer's friendly at titude.
9. Collecting retail retail ac counts are difficult to collect by letter for several rea sons : the addressee is either not a business man with the business attitude toward debts, or he is inclined to be more sensitive about overdue household ac counts than he is in regard to business debts; then, too, credit arrangements in the accounts of retail customers are seldom as definitely fixed as when the debtor is a business firm. This difficulty, how ever, makes it even more advisable that retail credits be fixed on a business basis and that retail customers be "educated" in the necessity of observing the regula tions that the firm establishes—in short, that they be influenced to expect courteous but emphatic insistence on prompt and regular payments.
Even when there are very definite credit arrange ments, the retail debtor requires more careful handling than a business firm. One grocer, for instance, finds that it pays him to include with all monthly state ments, a blotter bearing a cheerful quotation in verse or prose, and a calendar for the month. He says
that payments have come in more promptly since he began this practice. When customers fail to pay promptly, it is essential when letters must be used, that the retail collection letter be adapted to the in dividual case. Some of the suggestions made by one of the largest wholesale houses in the country to its customers, small town merchants for the most part, clearly present this problem. Excerpts from these instructions Collecting money is like selling goods. It involves a knowledge of human nature and ability to select the methods that work best with individual debtors. No matter how carefully you pass upon your credit risks, some are sure to be slow in settling. Misfortune may befall them. Any one of twenty things may cause the customer to fall behind. It naturally follows, then, that the better you are acquainted with your debtors, the more successful will be your collection methods.
A very important essential of the successful collector is firmness. Many a dealer will not press a customer because he is afraid of losing his trade. So he lets the bill get big ger and bigger until finally the customer leaves because the bill has got beyond him. This is a very weak position and a useless one.
At the same time you must know the customer from whom you are trying to collect. What might answer with one will offend another. Understand the circumstances as com pletely as possible before you do anything.
A grocer who insisted on collecting his bills on the 1st and 15th of each month noticed that one of his new custo mers was two weeks in arrears. So he wrote the customer reminding him very curtly that his account was running entirely too high and must be settled, as the policy of the store was that bills should be paid promptly on the first and the fifteenth.
The bill was paid. A check came by return mail. But the grocer never sold that family five cents' worth of mer chandise again.
The fact was, that this customer's wife had been called away from home by the sickness of a relative. Her depar ture was sudden. The maid she left in charge of the house was not instructed to pay the grocer's bill—a very natural omission.
Then the grocer made his mistake. He found out after ward that the customer's financial standing was even better than his own—that the customer was good for many, many times the amount of the bill, and that he had a high posi tion among business men. If he had investigated before writing the letter, of course, he would not have written it. He not only could have collected his money in due course, but now would be selling more groceries.
This loss to the grocer seemed unjust in a way. He had asked for nothing more than was due him. He had given the family his goods and was entitled to his money. Prob ably the aggrieved customer would admit as much. At the same time, the customer had a right to resent the unneces sarily sharp letter the merchant wrote. Anyway, he did resent it and this is what caused the grocer to lose.
You don't have to be apologetic about collecting your money. It is yours. But you do need to know your cus tomers and to deal with them in accordance with what you know. If you don't you are likely to lose them.
10. Suggestions for retail collections.—As exam ples of letters that may help the retail merchant to write successful collection letters, this wholesale house offers the following series, with comments: