When the customer can't pay

John R. Hall

I know that most contractors pre-qualify customers before doing an install. No one wants to be stuck with a $$$ invoice that a customer can't pay due to poor credit or an empty checking account.

But what about the customer who needs service work done? These are the people who you wouldn't normally run a credit check on or pre-qualify because the repair would run in the hundreds instead of thousands.

Let's say you do a $300 repair and then the homeowner (or business owner) says they can't pay it, at least not on the spot. What is your next option? Installments? "Undo" the repair? Do you give them a "ballpark figure" ahead of time to prepare them for sticker shock?

It's hard to walk away from a good paying repair and even harder to eat the cost. Just curious.

Weezbo

Learn to take the good with the bad and move on.

dont waste time with it. get them to sign some paper saying they will pay,or get thier word they will help someone else in the future and go with God on it.

joel_19

repairs

pre qualify repairs by having your dispatcher/secretary or whatever ask them how they intend to pay right when you book the appointment. "Will you be using M/C or Visa to pay for your service call Mrs jones? or giving our service person a check when he arives?" Many say they can't pay but just choose not to pay YOU, while they have plenty of money for beer, smokes, and lotto tickets.
That said you can help people out who truly have a hardship by extending them credit if they are a regular customer, let them pay over a few months if they have too (with interest). But be careful, how come they can't put it on thier M/C?? No space left on thier card cause thier in debt up to thier eyebrows or because they'd rather not pay the interest?
Remember it's not your fault they fail to budget thier money for repair work, we all have to repair our trucks etc and budget for itaccordingly. I've seen people making 200k a year try and weasel out of a bill because they are spending like 225k a year for all thier toys that you or I couldn't afford.

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Paul Pollets

Policy

We always ask the customer how they intend to pay before we get to the job: cash, check or credit card? Since the cost of the repairs (or project) is known and authorized before the work begins, there's no "back-pedaling" or excuses accepted after the work has been completed. We've had to send only 1 customer account to collection in over 7 years and it was under $300. Collecting the $$ is as important as the work itself. I got to work for the credit manager of my father's company when I was a young man....his famous quote was " it's notta job until you getta paid" I never forgot the line.

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Weezbo

if you have the billing worked out in advance it is often ...

much better thing all around.say you give them a proposal over the telephone and they say nope thats too much just let them find someone else. i have done all kinds of work for free thinking alls well at the end of the job. my older buddies said thanks buh no thanks and refered them to me...The rotten sob's:))

Brad White_2

Mechanics Lien

When all else fails (and I hate to be litigious) but you can file a Mechanics Lien. This is common in most if not all states and is relatively simple to do. (Some contractors know their county clerk very well, which is unfortunate.) It does not guarantee payment but fixes you as a creditor behind the mortage holder and possibly trustees. You would be paid only upon transfer of the property if by no other means. Some states require renewal on an annual, tri-annual or longer period. Some may be for life of the estate. You do not accrue interest, so a $300 payment in 20 years will get you a loaf of bread and a cup of coffee....
Check out this among other sites.
http://www.mechanicslien.com/

jackchips_2

Not sure how

far back your looking for examples John, as this goes back a few years. OK, quite a few years.

My late Father-in-law taught me to just forget someone who refused to pay. Emphasis on refuse, not couldn't. His philosophy was you get much more pleasure out of seeing these people around town avoiding you like the plague.

He was right, expecially in one case. Actual friends (?) who needed a few plumbing repairs done. After months with no payment I was driving by and saw "Mike" out in the yard. I stopped and he informed me that his wife told him my work was not done right and his wife called someone else to do it again.

"Well, let's go take a look, Mike". We did, no changes, no payment. Until they moved out of town Mike would cross the street whenever we approached each other.

I loved old Bill and his advice even though it certainly isn't for everyone.

Good question, another good memory.

Thanks, Jack

Ken_8

Paul, without getting into how you could possibly know

the cost of the job before you even find or diagnose the problem - and then quote a price perhaps without even knowing what the parts may cost, suppose the customer says, "Can't you just bill me"?





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Ken C.

Well said, Joel

People don't like to spend money on their plumbing (or, heaven forbid, their boiler), because they can't show it off to their friends/neighbors/relatives like that 46" plasma screen television, or a Mercedes. They forget, without a plumber, they could be in trouble, likewise, if their boiler quits on a zero degree day, it would suck to be them. I gotta laugh at some people's "consumerism." I was eating breakfast at a diner recently and couldn't help but hear the conversation of a young couple seated next to me. The woman said her friend had to trade in her Mercedes for a less expensive car because the Mercedes payments were too burdensome. Boo hoo.

Ken C.

In this real estate market ...

... a mechanics lien could be quite an effective tool. In my area, it's a seller's market, and prices have skyrocketed the last few years. We've had a lot of influx of buyers from out of state. Plus, I've read that Americans move an average of every seven years.

EJW

Payment

I ask people who I have never worked for that I will need to be payed before I leave there home. The next time I go there they remember the first time and will usually give me a check without me asking. After that I have no problem billing them. I do like Jesse James method though, he had "pay up sucka" tattooed in his palm!

Grumpy_2

More to life than money

I was changing a water heater, several years back, in a nice neighborhood with average homes for the region. While I was loading up the truck to depart, the next door neighbor came to meet me in the driveway. He asked if I would be willing to take $200 cash for a water heater install at his house, and allow him to make payments over a couple of months for the balance. He explained that he was out of work, his water heater had broken several days before, and he was really upset that his 4 children had to take cold showers and baths.
I have always been a "softie" for a hard luck story, I was once in that position myself, so I agreed to do it. When I got in his house and saw these little kids eating noodles and crackers for dinner, I asked if he had enough money to feed the family, he said not really, but they needed to have hot water too. Well, I installed the tank, told him to keep the $200 and when he got himself squared away to send me a few bucks. It was over a year later, I had written off the account without trying to collect it, when he walked into the office. He handed me the entire amount in cash, and a gift certificate for $100 to a local restaurant. After making sure his financial situation had indeed improved, I accepted his money and told him that the gift certificate was unnecessary. He repiled, "You were the only person that was willing to help me when I was down, and I want you to have it." He has become one of the best customers I have, and over the years has refered a lot of business our way.
Some times you just have to do what is right by people. Yes, you will get burned a few times, but to have one of them turn out like this one did, makes taking a chance on folks a whole lot easier to do.

John Starcher_4

WOW!

Great story, Grumpy!!!!!

I believe in the "what goes around comes around" theory very strongly, and you just confirmed it. You are a good man for doing what you did.

And you're absolutely right - there is WAY much more to life than money!!!!

Starch

DaveGateway

Give and get

"What goes around comes around." isn't just an overused cliche. Helping someone in need will always come back to you, usually from a different source, but you WILL be repaid. Deadbeats are deadbeats, but good people are good people. The small losses you shrug off and the big ones you fight.

Paul Pollets

Getting Paid

Ken, I never let the billing or estimating come after the job.The customer rep asks the customer while doing the intake, "how will you be paying for the service call?" Select house accounts are net 10 day billing. Even on complex troubleshooting, my fees are agreed upon before I begin. I've been stung twice in 32 years, and those amounts are under $1000. How could I possibly know the cost of the job is or what the parts may cost? Experience, I guess. There are times when I've allowed a per hr. fee for diagnostics, to be able to nail the exact jobcost. Who would want to underestimate the scope of work? It's very expensive to do business in the 21st century. Contractors, specifically hydronic/HVAC/Plumbing contractors, need to be assured of prompt payment, as agreed by contract. No contract or authorization? No payment...or verrryyy late payment (wish)

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Unknown

You're a great man Grumpy

That's a hard name to call you after your post . I wish there were more people like you willing to lend a hand to others who need it most . I'm glad to hear the family is doing good .

joel_13

and

If they are trading to get out of that Merecedes payment the dealer is going to be in a great position to hose them even further. I had a relative trade in her good Mazda for a leased Jetta. Her mazda only had a couple payments left was worth thousands and she traded it in on a LEASED car which of course she'll never own. The reaason, her payment would be lower and she'd have a brand new car. Book value on her Mazda was almost 10k. the dealer actually convinced the girl this was a good deal!

Joe_51

Grumpy you da bomb !

Mike Kraft_2

Grumpy

Take a bow!

cheese

Grumpy_2

Aw! Knock it off!

I didn't do anything that any one of you guys wouldn't have done in the same circumstances. Sometimes folks need a little boost, we all give a hand when we can.

Jeff Lawrence_24

Well,

It looks like I'm 2X behind the times.

In October, we'll have lived here 14 years....

Jeff


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Jeff Lawrence_24

Not that I'm in Grumpy's league

But I have allowed certain customer to make payments. Usually it's 50% down (which covers most of the equipment) and the rest in 1 to 3 payments.

I don't do this for anyone, but I've never gotten stuck either.

J.

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hr

Can't pay, or won't pay, John

I have a hard time believing any homeowner "can't" pay a repair bill. Banks loan money, pawn shops love to loan money. Millions of car title loan companies in everytown America these days, they'll loan on a signature!

Hardship cases are a completly different topic and I'm sure we all donate for a good cause. Professional rip off artists are a different animal and should not be allowed a "free ride"

My experience indicates the hardship owners will be upfront and explain there inability to pay and ask for help or time. And we all determine when "it's the right thing to do" with no-charge work.

Don't confuse, or mix, these down on their luck folks with the rip off pros.

Letting the customer know on the phone that you have a trip, truck, service "charge" and expect payment at time of service helps a lot. Asking for their payment choice over the phone helps. Slimeballs still slide through ocassionally. Depending on the $ amount it may or may not be worth the collection hassle.

I have a car dealer friend that uses a repo/ collection guy that he claims ALWAYS gets the "monies" I've never had to try him out, however

hot rod

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S Ebels

Another hard luck story

As for the original question, our terms are cash for service work. 1/3 total with order, 1/3 when equipment and related materials are delivered, 1/3 BEFORE final inspection is called in for a job which takes a few weeks or months. On emergency replacement type jobs or those that take just a day or two the terms are payment in full when complete. For customers we are unfamiliar with or ones we don't trust, we'll take a "critical" part out of the equipment rendering it inoperable until paid if they start making excuses after it's installed.

Hard luck story.............

A few years ago I got a call from what sounded like an older gent about 7:30 in the evening. He explained that he was in a bind with no heat and had been refered to me by a neighbor of his. When I arrived at his place (31 miles one way) I was shocked by what he told me and what I found. He had been without heat for 2 1/2 days (late January) after throwing out the "30 days or 30 feet" dude that he had first called to repair his oil furnace.

The old guy was wheelchair bound, living alone and had been heating his house, kitchen I should say, with his electric oven. You could tell the guy didn't have a pot to pee in or a window to throw it out of just by looking at his house. A little conversation revealed that the doorslammer had condemned the furnace due to CO and multiple huge cracks in the HX. The old guy couldn't get down the basement to see what was going on so the cretan decided he could scam him easy. Turns out the old man was sharper than he thought. I went down to the basement and found the old Wayne OEA series burner stripped down to its last nut and bolt, laying on the floor with the transformer and the burner relay gone. The old gent told me that the hack had taken some parts with him but he hadn't realized they were from his furnace. Upon close inspection nothing was found to be wrong with the furnace so I reassembled the burner, installed the parts and fired it up. All that turned out to be wrong with it was a gunked up nozzle and plugged fuel filter. I worked there til after midnight, checking it all over and doing a thourough combustion test on it.

When I finished I handed the old boy the bill for $65 total. He asked if that was all and I told him it was on one condition. That being that he take a copy of a bill showing the actual amount of the call and go after the burner butcher for the whole thing plus whatever else he could get. He said he'd be glad to. It worked out great as I heard back from him about a year later that he had beat the jerk in court for attempted fraud and received full judgement for the actual cost of the service call plus the hack was barred from doing work in that county for 5 years. I told him to keep the settlement because it was worth it to me to get the thief off the road. He was happy and so was I.

Constantin

Beautiful justice

A win-win for the ethical specialist and home-owner alike. I wish more hacks could be driven out of business this way.

Constantin

Grumpy, you made my day

Thought you'd like to hear that. Congrats again on helping a person in need and having your goodwill repaid in full.

I wish more people were charitable like you and honest/diligent like the homeowner in your story. Keep up the good work and I hope that slimeballs and the like don't temper your enthusiasm to help a fellow man in real need.

Tom_35

Customer can't pay

Years ago a plumber told me about a nursing home remodel that he had done and was never paid the balance of the job. He finally went to the job and started removing the toliets. He took out 12-15 toilets and took them back to his shop. He soon got a call from the irate owner wanting to know what was going on.

He told the owner that something was wrong with the toilets and he had to check them out. The owner said he wasn't aware of any problems and the plumber replied "there has to be some sort of problem because you won't pay for them."

The owner gave him a check for the balance plus labor to reinstall.

I don't know if this was "legal" or not, since the toilet was "attached" to the property, but it happened in Oklahoma.

Ken C.

Excellent point! What with ...

... the rapid increase in house values the last few years, many homeowners got a huge boost in home equity, so they should have little trouble getting a home equity loan if they know their heating system (or plumbing, electrical) is going to need some updating. After all, many take out home equity loans for remodeling, so why can't they do the same if they face major plumbing/heating repairs?

Ken C.

I said an AVERAGE (n/m)

ScottMP

And That Gentlmen ,

Is why I come to the WALL. To be around people like Grumpy.

what a wonderfull thing you did.

Scott

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Ken_8

We definitely need to

toss back a few adult beverages at Wetstock V. and discuss how you can do what you do. I have a lot to learn it appears.

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Dale

small claims court

A judgement in small claims court often helps when the individual who had no money suddenly wants to buy a house or get another mortgage and finds a large problem on the credit report. We've had hundred$ come in after several years.

Gary

lesson learned

Just last winter I learned a good lesson. No matter who it is have a contract signed . I did a complete heating job on a house , the total was about 14,000 and that was a deal for what I did . All I got was 5300.00 . It was my neibor I did the work for , thought I could trust him but he just bullshitted me into doing it . Attached it a pic. of the boiler and the piping.

Gary

no pay

Gary

no pay

Last winter I learned a good lesson . Alwas have a contract no matter who it is . I did a complete heating job on a remodel , the job came to about 14,000 and all I got was 5300.00 . The house was my neibor and he just bull @#% me into doing it . What a sucker I was . Attached is a picture of the boiler and the piping.

jerry scharf_2

notice of lien

I'm not sure how it is in other states, but in CA you have to file a notice of a mechanic's lien within 21 days of date of completion or you can't do it ever. In CA, this is almost SOP for anything on account.

I see this as a part of doing business. Explain to the customer that it's nothing personal and it's not about trust. It's two pieces of mail that you send them automatically, one of the notice and the second the release. They keep the pair in a file and you do the same. It will give those thinking of sticking it to you second thought. For anyone who pays the amount due within 15 days, no notice, no release, no bother.

jerry

Ken C.

Sorry to hear that

That boiler and piping is a work of art. Some people say neighbors and relatives are the worst people to work for.

jim lockard

this winter

You will as always know the sevice fee (door fee) up front. Then if I do not know you I will need proof of payment before I start C.Card dial up or I will hold your signed check. I will also ask that you sign my work order.
Then when we go to court and I hope we do not, I will win.
J.Lockard

mp1969

Know the feeling

Had a daycare center several years ago that ran into more $$$$$$ problems then they anticipated . I was told I would be paid the final $220.00 in two weeks that never seemed to come. After several attempts with no results I called her and said "forget the final $200.00 when you get on your feet take the kids on an outing.
The response was better than any ads in the yellow pages, the word of mouth referrals I got more than made up for the $200.00 and the feeling I got money does not buy!

Great post!!!!!

MP 1969