framing deposits

[framermike]

I've just been reading about "dealing with delinquent customers" and will be going through
the small stack of framed work that is gathering dust in the attic. I know I've got some "free"
supplies up there; anyway, to the subject...
Do you all take deposits? Am I the only framer (fool? smile.gif ) who doesn't take a deposit? If a
customer pays up front at their suggestion I usually give discount, though I don't advertise
that.
Mike

PS I hope there aren't any mistakes - the preview option isn't working (in the
time I have available!)

[lise]

Hi Mike. Good to see someone else from Western Canada! My family lives in Cowichan Bay so I am in your town at least twice a year.
Our firm policy is 50% at the time of order, but I usually ask and get 100% and no discount for full payment. The way to say it is this: As I'm doing up the invoice in MYOB, I smile and say, "With tax it comes to $428. How would you like to pay for it?" Thats when the credit card comes out and there is no issue. We are in the custom order business and a deposit is the norm. The only time I don't take a deposit is with family and even then we whine and they usually pay up. A good way to explain to people who resist is to tell them that cash flow is everything. They almost always understand. The ones that complain too much are the ones I don't need as clients as they will inevitably take months to show up.

[Ron Eggers]

No, Mike, you're not the only one. I rarely require a deposit and I give a 10% discount with prepaid orders. Out of about 33,000 orders, I've gotten stuck with maybe a dozen. If that ever changes, I'll change my policy.

[MiterMan]

Absolutely positively 100% every single time without exception get a minimum 50% deposit. Why?

1. At minimum, your materials costs will be covered.

2. It gives your customer an incentive to come back and pick the work up.

3. It improves your cash flow. Why in the world should you carry all the costs up front while waiting for money from your customer?

If you get 100% up front, even better. But why give any discount for paying up front? Is your cost of goods, labor, rent or overhead any lower because your customer pays up front?

[rosetl]

When I took over this shop several years ago there were "assets" of pick ups. I still have many of them....possibly more than what I have collected myself.

One piece of very good advice I got from the old owners was to put in getting deposits as they had not done so. 50% is pretty standard and I did get a few raised eyebrows at first but only know of loosing one customer. 90% or more of our "never picked up art storage bins" didn't leave a deposit. We inevitably get one or two a year and it seems clear to me that it is because we usually request a 50% deposit.

I read somewhere and would love a confirm -- but doesn't a deposit confirm a contract?

[Sherry Gray]

Nor do I take deposits. It's rare that I get stuck with work not picked up. We call the customer as soon as the job is done and here they come in a few days. No deposits work well for me.

[Lance E]

Originally posted by MiterMan:
Why in the world should you carry all the costs up front while waiting for money from your customer?
Because we can, it makes a great point of difference to encourage the sale.

[AndyPan, CPF]

I have always taken a deposit with any order coming in, and I always will. If someone leaves me with a $300 order, and I get $150 as a deposit, I know she'll be back, because who in their right mind would blow off $150... other than Bill Gates?

I always tell the customer "Okay the total is $300. We usually take a 50% deposit, which would be about $150, or you can pay the whole thing. Whichever works best for you." I find that more times than not, the customer will pay the whole amount up front. I usually get the work out within a week and a half, and they prefer not to have me show up twice on their credit card statement.

In general, I think it's always best to get at least some of the money up front. Like has already been mentioned, at least the materials have been paid for, and you didn;t have to dig into your own pockets to pay for them. smile.gif

[tnframer408]

My usual patteris something like: "That will be $250. WOuld you like to pay with cash, check or credit card?"

Then I shut up.

Then, if customer asks, "do I have to pay for the whole thing now?" answer is, "yes, if you please."

If I get another objection, and can read irritation, THEN and only then, do we go to the deposit thing.

And why would anyone give a discount for paying up front? Sorry, Ron, but when I go to mylocal Home Depot, or big mall clothier, nobody's giving me a discount for prompt payment.

Agree with Mitreman, though: at least if you've got 50% of the bucks, you've paid for material and labor. At least I hope markups are such that you have.

[PurplePerson]

To each customer, I always say, "Would you like to pay for all of it or for half?"

If they say they didn't bring any money with them, I say, "Oh that's OK. We order on Monday mornings, you just need to have your deposit brought in by then, otherwise we cannot order your frame."

They ask "What if I am late?"

I say, "We will just have to move your due date back, but that will work fine."

They have it there by Monday.

[Ted]

When I used to have my own shop, I would take a few minutes at the end of the presentation and price quote to inform the customer the following:

"We are a small town shop that places a tremendous trust in our customers. We don't ask for a deposit up front but would appreciate the item being picked up and paid for as soon as it's ready. Assuming that no item is back ordered, I can have this finished by (date). If that's not convient, when would you like to pick it up?"

This situation always worked for me. I didn't mind carrying the cost of framing, if I knew that it was being picked up the day it was finished. Arranging a finishing date (with a reminder call...sometimes) added an expectation and a respsonsibility not only to the customer, but to me as well.

Adding an element of trust makes people feel special and good about themselves. In many instances, the customer would pay for the job up front and appeciate my honesty.

Ted

[PAMELA DESIMONE,CPF]

I was wondering why those of you who don't take deposits don't take deposits?

[AndyPan, CPF]

And why would anyone give a discount for paying up front? Sorry, Ron, but when I go to mylocal Home Depot, or big mall clothier, nobody's giving me a discount for prompt payment.

Couldn't figger out how to quote, so cut and pasted. This is from tnframe. While I agree with you that we shouldn't be discounting for full payemtn, I just wanted to point out that as framers, most of the companies we deal with DO offer discounts for prompt payments. I know most of my companies give me between 2% and 3% for payment within 10-20 days. Granted, this is not a substantial discount, it's still something.

Discounts for a customer who pays in full makes little to no sense to me. Like:

Customer: Okay I'll pay that in full.
Me: Okay, well I can discount that 10% for your full payment. The new total is $240.
Customer (after pulling out all cash in purse): Oh I only have $200 of that now, is that okay?
Me: Well, since you don't have it all today, I have to take the full cost.
Customer: What?! But you said...

An arguement waiting to happen. Kudos to those that this works for though. I'll stay with my deposits. :D

[Ron Eggers]

Here's what I think: If you're opening up a new shop, I'd strongly advise you to require a deposit. Why don't I? I never have. Nearly all orders are picked up promptly, usually before I myself have paid for the materials. Most established customers prepay the order and get the 10%. But all customers are trusting me to do a wonderful job for them and I'm trusting them to pick it up and pay for it promptly. As long as that trust is justified, I won't require deposits. I've made a lot of really bad decisions in 25 years of business but, so far, this hasn't been one of them.

Why do I discount prepaid orders? It's a perk. It encourages people to prepay. The discounts are tracked TO THE PENNY and are built into my pricing. In effect, people who don't prepay are subsidizing the ones who do. Seems fair to me.

I'm not recommending anyone else use these policies. I'm just telling you they work for me.

By the way, I hope I don't sound upset. I think this is a very interesting thread and I'm glad FramerMike had the guts to start it.

[Terri M]

At my previous position, we required 50% deposit up front. I usually worded it "That will be $150, would you like to pay for all of it now or 1/2 now, 1/2 when you pick it up and love it?" Regular customers would usually pay the whole thing, new customers appreciated the 1/2 now, 1/2 when they picked it up and loved it. I think our confidence that they would love what we did helped ease any concerns they may have had.
We also had the wall space on the wall to hang customer's artwork. When we had a new customer who was not sure about us, I would hang their artwork up so they could see it when they picked it up. They thought it was neat we hung it on the wall for everyone to see. (did NOT do that for items that were going away gifts or items that did not need to be seen by others-had a lot of going away gifts with the military.)
The deposit usually ensured that they would return for the item. Any time someone puts money down, they don't normally forget it. :D

Just my 2 cents worth.
Terri