Opinions Wanted Deposit amount

[Ylva]

I have been checking the archives on the percentages and policies of deposits.
A lot of these threads are quite old and I found many cases where framers did not ask for any deposits.

What is your policy? How do you phrase it so customers know exactly what to expect?
Do you ever make exceptions? And why?

The previous owner of my store required 50% deposit but rarely executed that policy. I inherited pieces that have been there since 1988. Some with 50% paid.

Again, I know this is an old topic but it is still interesting and relevant today.

Ylva
:kaffeetrinker_2:

 

[Mike Labbe]

We did a survey about this 4 years ago, with the following results:

Deposits we generally ask for:
NO DEPOSIT: 24%
OTHER/MISC: 2%
25% (1/4): 3%
33% (1/3): 3%
50% (1/2): 63%
66% (2/3): 1%
75% (3/4): 0%
100%/Full: 3%

I'll go ahead and make it this month's grumble survey topic, so we can compare today to 4 years ago. I bet this will be an interesting discussion, too.

Mike

PS: In our shop we get 50% up front for about 95% of the customers, upon approval of the design. Corporate customers are usually exempt from this policy.

 

[Meghan MacMillan]

I adopted a posted policy I first saw at a commercial photo lab:

Orders under $100 must be paid in full when placed

Orders over $100 require a 50% Deposit

I added a note that says "Orders to be delivered must also be paid in full when placed"

I do occasionally make exceptions, mostly to the first part, particularly if it's a repeat client.

 

[Ylva]

We did a survey about this 4 years ago, with the following results:

Deposits we generally ask for:
NO DEPOSIT: 24%
OTHER/MISC: 2%
25% (1/4): 3%
33% (1/3): 3%
50% (1/2): 63%
66% (2/3): 1%
75% (3/4): 0%
100%/Full: 3%

Thanks Mike. I did find this one and was questioning the 24% that asked for no deposit. I also wondered how many people these days will ask for payment in full. The 3% seemed low to me.

 

[Richard Darling]

Like others have suggested in other discussions, I simply ask the customer how they would like to pay. If they ask about a deposit, I will allow a 50% deposit. But most just pay the whole thing. Makes it alot easier on pickup, less time processing the balance, and almost nothing left more than 3-4 weeks.

So my policy is 50%, but I always ask for payment in full.

 

[Jerry Ervin]

The 3% seemed low to me.

Me too. Especially since the Big Box stores require full payment at the time of order.

If it is acceptable with the public to do business that way there, why not with Independents?

Paul Cascio once gave me this insight, and it works. Just after you give the customer the total charge, you use these magic words, "And how would you like to pay for that?". It works more than half of the time, so only half of my customers ask to pay a deposit.

Thanks again Paul!

 

[JFeig]

my exception to 50% are

if it is a small order with a credit card.......... 100%
if it is a poster special................................. 100%

A poster special as an example is framing and mounting art for $63 - up to 22x28 in one of 4 metal mouldings.

 

[Kirstie]

Me too. Especially since the Big Box stores require full payment at the time of order.

If it is acceptable with the public to do business that way there, why not with Independents?

Paul Cascio once gave me this insight, and it works. Just after you give the customer the total charge, you use these magic words, "And how would you like to pay for that?". It works more than half of the time, so only half of my customers ask to pay a deposit.

Thanks again Paul!

We do this too. The survey is hard to answer. We don't ASK for payment in full, but we assume it. Any problem, we fall back to 50%
I guess I'll answer 100.

 

[Ylva]

The survey is hard to answer. We don't ASK for payment in full, but we assume it. Any problem, we fall back to 50%
I guess I'll answer 100.

I am in the same situation. Asking for payment in full, putting the question how do you want to pay for this and with any hesitancy fall back on the 50%
So I answered the survey 50% and not 100. That's why it's good to leave some comments on the vote as well.
Ylva

 

[PaulSF]

"How do you want to pay for this? We take Visa, Mastercard, American Express, and cash."

 

[nikfrz]

For cash flow purposes, I find that 50% down works the best for me. However, many just pay in full to be done with it. I do have some long time customers that pay when they pick up, which is okay. I know they are prompt about picking up.

 

[Joe B]

50% at time of order - balance upon delivery. No exception and no checks. I would say that approximately 50 percent of my customers will pay the full invoice at time of order even though they know I require only 50%.

 

[Ylva]

"How do you want to pay for this? We take Visa, Mastercard, American Express, and cash."

You don't take checks? Have had problems with that? Might be another good thread..... how many of us do take checks?
Ylva

 

[PaulSF]

We do take checks, but I would prefer plastic or cash. I've had two checks bounce.

However, you'll notice that none of the options I listed was "later" or "half."

 

[evartpat]

100% up front. Almost no exceptions! I can only think of a couple off hand, and they are city accounts that pay on a p.o. Started this policy after a thread here on the grumble about 2 mos. ago, and have had no problems. I would say 98 % pay without hesitation. My boss just loves me for it now, but I really had to convince her!

 

[Joe B]

Nope - don't take checks anymore except from customers with a long history in my shop - of course I don't let my other customers know about it. Had one check bounce for a goodly sum and the person that wrote it left the state. Famous old saying "Fool me once shame on you, Fool me twice shame on me".

 

[pictureframingpro]

same answer as Pat! I have really had no problems getting payment in full since 2 months ago, I started asking how would you like to pay for this today?

 

[pictureframingpro]

I take checks, but I have telecheck, and it is automatically debited from their account, and we are guaranteed our money, and if the check bounces then telecheck goes after their money, and we are worry free. There are a lot of checks that are not approved though.

 

[jim_p]

I accept checks as well as cash and CC. Haven't had any checks bounce yet (knocks wood).

I typically quote the invoice, then tell the customer they can either put 50% down or take care of the whole thing at once. For me, about 75% opt for the latter, 25% for the former.

Sometimes bureaucracy can work in your favor... I just had a commercial client give me a job and paid the 50% deposit by AMEX over the phone. I mailed them a statement showing the deposit and the balance on the job... two days later I got a check for the balance and I hadn't even started the job yet

 

[Kirstie]

Gosh, we've been taking checks for 31 years with very little problem. I don't even ask for ID anymore, and we are in a large metro area. Every few months we'll get a bad check, but only about 1 or 2 a year don't clear. We offer convenience. Pay how you want to pay--AMEX, Discover, MC, Visa, check, cash. Whenever I say yes we do take Discover or Amex, I get a little glint of delight from the customer.

 

[evartpat]

We take checks also. In the last year I think we had 1 bounce, and the person eventually made good on it.

 

[Mikesshop]

Deposit

I normally ask for 50% when they place thier order. I have made exceptions for some repeat customers. I also take checks and have not had any bounce.

 

[Couture's Gallery]

Our policy is 50%..but 90% of our orders are 100% because that is what we ask for ( how would you like to pay for that?) and rarely do we do a job with no deposit ( corp and really good repeat customers ). I put down 100% on the survey, since we mostly get 100%.

 

[Dancinbaer]

I take cash, check and CC. Very rarely do I get cash. Mostly check. Our chamber has a "Bad Check Hotline" program. I have two signs on the design counter.

One says I'm a member of the "Bad Check Hotline, all bad checks will be reported to the Police." No bad checks yet. I have had two customers call the next day asking I hold the check for a day or two. I appreciate that so hold it as they request.

The other sign says "50% Down payment required at time of order. Cash, Check or Credit Card accepted."

 

[PaulSF]

Amazing, of all the people that ask for the money upfront, nobody has told of an episode where the customer walked out in a huff because of the store's policy!!

And I bet the improvement in cash flow is pretty noticeable.

 

[adkres]

We offer a 10% discount on all prepaid FRAMING orders, all other orders are paid in full. Our accts receivable is never more than $1000.00-1500.00 due to schools, hospital, museums ect. You know how easy it is to bury 10%!

 

[wendy lang]

I say: "Would you like to leave a deposit or pay in full today?" It's 50/50 if they'll reply with a "how much of a deposit do I have to leave?" To which I reply: "We ask for half, but whatever you are comfortable with.' Most of the time they just say they'll pay in full.

The trick is to MARK the invoice with a big "PAID IN FULL!" (I sometimes forget, in the rush to close the sale!)

Wendy
The Art Corner
231 Washington Street
Salem, MA 01970
978-745-9524
artcornersalem@verizon.net

 

[Pangolin]

I'll take Visa, MC, Disc, AmEx, Cash, or Check, and I do have a trade account set up, but it hasn't ever been used.

Most customers around here pay a 50% deposit and the balance at pickup.
I have a few pieces here that were paid in full when the last owner had the place and the completed pieces have been here for years - some as long as ten years.

The only times I don't ask for a deposit is orders for the university, who do almost everything by p.o., their policy is to pay in 30 days - it's a little annoying (especailly since some are big orders) but I can live with it if they keep sending business my way!

 

[framtastics3v]

We always ask for 100% at the time they place the order, and I have very little work that is not picked up. If they are serious and know about framing they have NO PROBLEM paying at the time the order is placed. We turn our work in 6-7 days. If I take a deposit the work will sit and not get picked up, at least not right away.
I simply say "it will be $ ???? (the cost) today." It really is just that simple.

 

[David Waldmann]

For cash flow purposes, I find that 50% down works the best for me.

I'm having a hard time understanding that. Do you put the money in escrow and pay them interest on the balance until the sale is complete, or what? There may be other reasons why 50% could be better but how could 100% be worse than 50% for cash flow?

 

[RParrish]

I'm having a hard time understanding that. Do you put the money in escrow and pay them interest on the balance until the sale is complete, or what? There may be other reasons why 50% could be better but how could 100% be worse than 50% for cash flow?

It mostly psychologicaly, you work harder to get the balance.

 

[kurt]

Deposits to take

I have been in business for over 32 years. And up until the last few years we didn't take many deposits at all. Now we take deposits on all new customers jobs and on existing customers jobs when they spend over $300. There are always exceptions to the rule. We have some very good clients that I have been doing business with for many years that I don't take deposits from unless they are spending a tremendous amount of money. A lot of it boils down to cash flow and if your customers pick up in a timely matter.

 

[wendy lang]

My script is: "Would you like to make a deposit or pay in full TODAY?" When asked about the deposit I say: "It's usually half but whatever makes youfeel comfortable."

I balk at $20 for a $200 order, but am okay with $50 for the same. $50 is more of a commitment.

Wendy

 

[JRB]

I have always gotten a fifty percent deposit. Sometimes someone will balk and say that we have their picture. I tell them the absolute truth, I need that money to help me with the materials when I order them, it is a cash flow issue, not a trust issue.

I will go on to explain, if they don't seem convinced, is tell them for me to become the legal owner of their property in California, that I must go through all the abandoned property procedures, which includes hiring legal representation. This usually costs between five hundred dollars to eight hundred dollars.

California law demands that once I become the legal owner of abandoned property, I must now deliver it to the state, properly packed, with all shipping costs pre paid, by me. They do not come and pick it up. I am not allowed, by law, to sell any abandoned or forgotten properly, it belongs to the state.

I explain further that the beautiful paint by number painting, done by her very talented great niece, can never be something I could legally sell. Therefore I must get a deposit.

Then she says that dumbass frame company up in Hillcrest, never asks for a deposit, why do you? I explain to her that particular frame shop is famous for their no deposit framing, and if this deposit issue is going to affect her budget, why she should just drive right up there.

I have now gone from trying to get a deposit to trying to convince her I do not want the job. Usually the new attitude gets me the project.

John

 

[JRB]

I should note to California frame shops, that California law clearly states that abandoned, forgotten, or whatever reason, that property must be turned over to the state. I can not recall the time table that you have to determine if it has been abandoned. I do recall that it is surprisingly short, a matter of a few months.

If you have been sitting on customers property for over six months, or whatever the cut off date is, you are now breaking the law, and will probably face penalties.

This alone should be your motivation to get a deposit that is substantial enough to insure your customer will pick up their work.

For the shops that do not collect a proper deposits, all those unclaimed pictures that you have stored in that back room, could end up costing you many thousands of dollars in penalties and fines, if you were to have a surprise state inspection. You will not be given any time to come up with the money, they usually want it that day. You may be able to convince them to let you make payments on it, depending on the amount.

Be careful with your good will generosity, it could very well put you out of business.

John

 

[Fastfar]

Wow, that's a bit scary John...I work in a out of the ordinary sort of frame shop, we are in a corner of a large Ace Hardware Housewares dept and one of three frame shops in Davis. My associate and I started here only six months ago, and there was at least a dozen pieces of art left for years. We have tracked down most of the owners and collected for the work originally done. In some cases the paperwork for the remainder is missing/no longer present. How does one go about turning unclaimed property over to the state? Also, can you cite the relevant statutes? Could it be Business and Professions Code?

And we don't take any deposit upon order as that is the Davis Ace Company Policy!!! Which may be why we have this unclaimed art, in which we (the past framers) have invested materials and labor.

 

[JRB]

Wow, that's a bit scary John...I work in a out of the ordinary sort of frame shop, we are in a corner of a large Ace Hardware Housewares dept and one of three frame shops in Davis. My associate and I started here only six months ago, and there was at least a dozen pieces of art left for years. We have tracked down most of the owners and collected for the work originally done. In some cases the paperwork for the remainder is missing/no longer present. How does one go about turning unclaimed property over to the state? Also, can you cite the relevant statutes? Could it be Business and Professions Code?

And we don't take any deposit upon order as that is the Davis Ace Company Policy!!! Which may be why we have this unclaimed art, in which we (the past framers) have invested materials and labor.

I am basing this on a letter I received from the state, I reckon it was around eight or so years ago. The same letter was sent to all banks and brokerages. I can not recall what I did with my copy. I am sure if you contact your bank and explain to them about all this, they will be able to tell you which agency to contact for more complete and updated information.

If they can not furnish you the information, contact the state board of equalization. I know they can set you on the right path.

Before you do anything, contact your supervisor or the owner of the Davis Ace Company first. NEVER get the state to focus in on your company, without the owners full knowledge.

I can not overstate the importance of that.

John

 

[PaulSF]

Well, that's the key, John. The state isn't going to come after anyone unless they jump up and down and shout "over here, over here." The average frame shop simply isn't worth the resources.

I wouldn't try to sell off anyone's "artwork," but you are certainly OK to remove it from its frame and store it away. And change your policy to require payment in full up front. It's better for your cash flow, and if someone wants to leave their stuff with you for years, at least you've been paid.

 

[JFeig]

As a person who has not visited California in over 35 years. I have a question.

How do garages and contractors handle "mechanics liens" that are part of most others states statutes? The letter you are quoting was sent primarily to financial institutions as well as other businesses.

 

[JRB]

As a person who has not visited California in over 35 years. I have a question.

How do garages and contractors handle "mechanics liens" that are part of most others states statutes? The letter you are quoting was sent primarily to financial institutions as well as other businesses.

I honestly do not know. I have never been involved in such things. I would imagine that items such as cars, trucks, airplanes, RVs, etc. that have a transfer of ownership is made through registration slips and such, that all filed leans against the item would have to be cleared of leans before the transaction could be completed. Again, I am just speculating.

I do know that in aircraft, and real estate sales, most people advise a title search for old leans, be made by the buyers. If you end up owning these things legally, you have also taken on all past encumbrances and leans..

John

 

[Mike Labbe]

Thanks for participating, folks! The poll is closed, but discussion can continue.

What do you think?


How much of a deposit do you generally ask for, when new customers order framing?

08% No deposit due in advance (was 24% in 2004 survey)
01% ~25% (1/4) (3% in 2004 survey)
03% ~33% (1/3) (3% in 2004 survey)
70% ~50% (1/2) (63% in 2004 survey)
14% Full payment due in advance (3% in 2004 survey)
04% Variable deposit %, depending on dollar value of order (2% in 2004 survey)



It's interesting to see how these figures changed from 2004!

Mike