This is why I only do next day credit cards

Discussion in 'Lawn Mowing' started by DFW Area Landscaper, Jun 2, 2005.

  1. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    Lady signed up for service my first year in the business. She was firing her last LCO over quality issues. I agree to bill her once a month after I've already done all the work. That's how I did it with all my customers in year one.

    She was a chronic complainer. And a slow payer. She was one of the few I actually had to suspend service on last spring. We cut her lawn this spring a few times and I get an e-mail: I won't be needing your services anymore.

    Fine, I take her off the schedule and stop service immediately. At the time she cancelled service, her payment was two months past due and the balance stood at $204.01. We were just on the verge of suspending service for payment anyway (and should have done it earlier but I always seem to screw that up).

    I finally got her payment yesterday. She short paid the bill by the 2% late fee we charged in April ($1.24), the 2% late fee we charged in May ($2.56) and she didn't pay for the final application ($41.04) or the final cut ($32.40). All told, she still owes $77.24.

    Included with the check is a little note that reads: I am only paying $126.77. You did not do my yard any after the e-mail I sent you. The chemical you put on my st augustine killed it.

    The lady is a professional dead-beat. First, deny the service was performed and then manufacture a quality issue to avoid paying the bill.

    Next day credit card for all new customers or NO SERVICE. This has been a very good policy. Since we started next day credit cards, we simply don't have to deal with schit like this anymore.

    Actually, I thought she was gonna stiff the entire bill. At least I got something.

    Later,
    DFW Area Landscaper
     
  2. willretire@40

    willretire@40 LawnSite Bronze Member
    from VA
    Posts: 1,387

    I understand that. The credit card idea is one of the best things that i have learned from this site billing them next day thanks to Justmowit. So how is your business going. Do you have alot more customers this year? Glad you stuck with the lco business keep up the good work.
     
  3. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    216 customers as of right now. Things are going very well this year. Still have a substantial operating loss on the year, but that is because I had a ton of operating expenses this spring that I don't expect to encounter next year. You know, things like line trimmers, gas cans, trailer hitches, truck lettering, etc.

    Later,
    DFW Area Landscaper
     
  4. mbricker

    mbricker LawnSite Senior Member
    Posts: 505

    Yes, at least you got something. Here are my thoughts on late fees, after charging them to customers for the past 5 years:

    If you charge a percentage, and that is 2% like you are charging, it is often an insignificant amount that does not get the attention of the customer... What does your personal credit card charge you for a late payment? $29? Or more?

    Stiff them with a minimum late charge of no less than 10 bucks. The late fee policy should of course be detailed in your contract or whatever terms you send out annually, or to new customers.

    You are in the lawn business, not the finance business, so NEVER call the late charge "interest" or "finance charge." It is a combination of penalty, interest, and cost of your time for the extra book-keeping associated with a payment that comes after the month should have been closed out. An attorney told me I could go as high as 8% monthly--after the minimum-- without having it denied in court here in Arkansas. Avoid breaking down the fee for a customer, it is none of their business how you arrive at the fee. Just stick with it. Here in Arkansas, late fees will be upheld as a legitimate part of your claim if you have to go to court, including small claims.

    And yes, if you are in a market where customers will go along with giving you a credit card number, that avoids the whole hassle--usually. They can still cancel the account with their credit card company.
     
  5. mbricker

    mbricker LawnSite Senior Member
    Posts: 505

    BTW, if the chemical you put on her St. Augustine killed it, you probably better go back and be sure with a tank of Round-up. Wouldn't want the sweet lady to turn out to be a liar, would we? :p :p :p
     
  6. willretire@40

    willretire@40 LawnSite Bronze Member
    from VA
    Posts: 1,387

    Are you still doing door hangers,and how many of those customers came this years? Are you keeping those crews busy?
     
  7. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    Appreciate the advice with the late fees. I agree, a 2% late fee only lets them think in terms of prioritizing the lawn bill at the very bottom. A late fee of $1.24 is just plain silly as a catalyst for timely payments. But at least a $1.24 late fee will be paid.

    Having said all that, a $29 late fee from Chase Bank is very different from the $29 late fee charged by the guy who is actually mowing the lawn.

    As for the market being "accepting" of credit cards, it isn't. You have to present the right image in order to get credit cards. Projecting the self employed image does not work. Projecting the "big company" image works very well. When I was driving around doing in person estimates last year, I would push for credit cards, but more than half would not give me a credit card. It is a trust issue, I suppose. They see a guy who mows lawns for a living and they just won't do it. However, once they started calling this spring and I ended the on-sight estimates, the credit card is a non-issue...unless they call when my kids are screaming in the back ground. Or, if they call from one of the door hangers I distro'd in year one. Those were very cheap and when they call from one of those, I won't get the business because of the credit card.

    I've also lost out on a lot of business because of the CC requirement. But the way I look at is this: If they would have been allowed to dictate the payment terms, the relationship probably wouldn't have been a good one anyway. Once they smell weakness, they will eat you alive. More importantly, I would have to a.) wait 50 days to get paid if they pay on time b.) manage accounts receiveable and c.) risk getting stiffed.

    Later,
    DFW Area Landscaper
     
  8. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    This is what I am talking about with the "image".

    Our advertisements convey a "large company" image.

    Later,
    DFW Area Landscaper

    Advertisements.jpg
     
  9. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    My competitors might have a harder time dictating credit cards with advertisements like this:

    Later,
    DFW Area Landscaper

    Bloodletting 1.051.jpg
     
  10. Jay's Lawncare

    Jay's Lawncare LawnSite Member
    Posts: 147

    those are some nice door hangers dfw, if you don't mind me asking, where did you have them done and at what cost?
     

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