Deadbeat customers have been a problem since time immemorial. Said
dirt bags ask you to perform a service and/or provide a product
and then either try to cheat you out of full payment or refuse to
pay at all. Back in the days when repairmen made in-home visits
for radio and television sets, evidently the problem could be really
bad. Art Margoli wrote this article for Radio & TV News
describing methods he devised to handle, and most importantly avoid,
uncomfortable situations and stave off ugly confrontations with
customers. One such scheme was to have customers sign a "cognovit
note," which is an extraordinary document by which a debtor
authorizes his or her creditor's attorney to enter a confession
in court that allows judgment against the debtor. Of course litigation
would probably cost more than the bill was worth and therefore would
not likely be pursued, but the cognovit note appeared intimidating
with sufficient legalese to give pause to the seasoned feckless
homeowner. If you are in business for yourself and have similar
issues, maybe something here will work for you. Fortunately, I have
only had a couple incidences of companies not paying according to
my very lenient terms.
Strategy for C.O.D Service
By Art Margolis
The chief customer types who try to defer prompt payment
and the techniques for discouraging them.
Fig. 1 - One defective component caused another in this
About a year ago the owner of a busy three man TV service organization,
a friend of the writer, was handed an ultimatum from his ac-countant.
The accountant stated, "You either raise your service charge or
cut out your credit business."
Delinquent accounts had reached a new high of twelve-hundred
dollars. The expense of billing and special collection trips were
eating deeply into the profits. Since his service charge was considerable
already, the TV expert decided to go on the C.O.D. standard.
He quickly discovered there was one big problem with being strictly
C.O.D. What do you do with the customers who still ask for credit?
A strict adherence to refusal of credit was sending a percentage
of his clientele elsewhere for TV service. He was faced with the
enigma of how to give some customers a form of credit yet remain
essentially on the C.O.D. standard.
Since the author's service outfit has always been C.O.D., the
technician called on the writer with his problem. A long conference
ensued and the harried operator was given a detailed description
of a C.O.D. strategy that has been used successfully for years.
Experience shows that there are four definite types of set owners
who ask for credit even though they know that business is transacted
strictly on a C.O.D. basis.
The Careless Type
The writer ran into one of these only a couple of days ago. The
TV was a three-way combination Philco. The set owner was a well-to-do
elderly lady. The home was on the outer fringe of the service area.
There was no audio, a weak picture, and slight vertical foldover.
A new 12BH7 vertical-output amplifier fixed the vertical foldover.
A new 12AV7 perked up the picture, but that's all tubes would do:
the audio still remained silent. The r.f. chassis was pulled out
of the cabinet and the audio section inspected. Visually a slightly
charred resistor was spotted. It was the "B+" dropping resistor
in series with the screen of the 6AU6 audio i.f. (see Fig. 1). The
ohmmeter read it as 6000 ohms instead of its called - for 25,000
ohms. It was replaced.
The chassis was hooked up and the TV turned on, still no audio.
Evidently something else had burned up the resistor. A screen-to-ground
resistance reading was taken. The meter read 4000 ohms. The schematic
(Fig. 1) showed a 22,000-ohm resistor to ground and, in parallel
with the resistor, was the power supply through the new 25,000-ohm
resistor. The meter should have read no less than 10,000 ohms under
these circumstances. The 22,000-ohm unit was disconnected. It was
the culprit. It read 4000 ohms.
The "B+" dropping resistor had been electrocuted because the
22,000-ohm unit had shorted down, thus dragging a lot of current
through both units.
The r.f. chassis was replaced and the audio sounded off. However,
the damper was also replaced for arcing. The bill was unavoidably
high. When the little old lady received the bill she said helplessly,
"All I have home is five dollars. Whatever are we going to do?"
The writer carried out the strategy for the "careless" type.
He collected the five and marked on the receipt the balance due.
Under that sum he printed in large letters. "WILL MAIL IN 48 HOURS"
and had her sign beneath it. He gave her the carbon. Then he handed
her a stamped, addressed envelope and smilingly instructed her simply
to put the cash, check, or money order in the envelope and drop
it in the mailbox.
The click-click efficiency and tactful concern over the unpaid
balance worked as it usually does. A check arrived. the next morning.
For these people who are simply careless enough not to have enough
money around to meet their daily requirements, the collection message
must be brought home strongly but not offensively. The readied envelope
eliminates the obstacle of the customer having to make one up, and
the signature imparts a strong sense of obligation and urgency.
In the great majority of cases, the money arrives in the mail quickly.
The Suspicious Type
A second type of individual who asks for credit under all circumstances
are those people with suspicious natures. They feel that if they
can hold back payment for a length of time they have a weapon by
which they can force a TV technician to stand behind his work. The
suspicious types are hard nuts to collect from, but it can be done.
The technician has the job of instilling enough confidence in the
customer to enable him to waive his hard rule of holding back payment.
A perfect "suspicious" type lugged his receiver into the shop
the other day. He left his name, address, and telephone number and
departed. After the set was repaired, the customer was called and
He tried to pick up the TV but was handed the bill first. He
said, "I'll mail the money in." When reminded of the shop's C.O.D.
policy he blurted, "If the set works okay for a while you'll get
your money; don't worry."
The writer tactfully went all through the facts that the work
is guaranteed, that the company is bonded, and that even though
the bill were paid the guarantee would be just as good. The gent
stood firm. Since the TV was still in the shop, there was no problem
- possession is "nine tenths!" However, insistence would have meant
irritation and the loss of good will. The writer went into the strategy
for suspicious customers.
"Sir," he said slowly, "You are going to mess up our bookkeeping
by holding back the money." He took off his wrist watch. "If you
don't trust me sir, here is my wrist watch. When you are satisfied
with the repair you can bring it back."
The beefy fellow lost all his belligerency, paid the bill, shook
hands amicably, and left with his set. This wrist watch has been
offered many times - it has never been accepted yet.
The Professional Beat
Unfortunately there is a small percentage of people who believe
that the word "credit" is synonymous with "free gift." They feel
that if any firm is fool enough to give them an open account, that
firm will just have to suffer the consequences.
A TV technician
can spot these professional "beats"; they all tip their hand with
the same routine. They do not mention a word about payment until
the technician has fully completed his work. Then, after all the
screws are back, the set is perking nicely, and the tool box is
closed tight, they say, "I don't have no money."
The writer's outfit has a strategy reserved for this set of circumstances.
It was used recently by one of the outside men. All of these outside
men carry with them copies of a certain type of contract - an impressive
looking legal paper - known as a "cognovit note." It is used only
in extreme cases where it is obvious that the intentions of the
customer are not honest. A copy of this document is shown in Fig.
The cognovit note is an iron-clad note of indebtedness. It is a
promise to pay a certain sum by a certain time. If the money is
not paid, the undersigned confesses an automatic judgment in favor
of the holder, waiving all legal rights. The undersigned also agrees
to pay all costs and interests that accumulate in satisfying the
note; If the note is signed and payment is not forthcoming on time,
all that is necessary is to turn the note over to a constable, justice
of the peace, or a collection agency. In this case the set owner,
after reading what she had to sign, managed to get the money together.
They usually do.
Fig. 2 - Those who appeal for credit with dishonorable intentions
usually can be discouraged with the stringent legal form
The fourth type of credit-seeking customer is one who honestly
doesn't have the money to pay his bill. There is a method to extend
these people a form of credit and practically eliminate all risks.
The writer used it this week on a 16" Emerson repair. One of
the field men pulled it into the shop for lack of horizontal sweep.
There was a bright, jagged stream of light that extended top to
bottom on the screen. A schematic was pulled and troubleshooting
The horizontal circuits were examined first. They passed all resistance,
voltage, and waveform tests. The trouble seemed to be somewhere
past the horizontal output amplifier. The yoke and high voltage
transformer were checked by tacking in new replacements. The new
replacements didn't change the trouble in the slightest. All the
components in the damper circuit were checked; every part was good.
This one was weird.
The boosted "B+" was investigated. Everything checked satisfactorily.
The only circuit that was left that could possibly cause this condition
was the power supply. The schematic was perused to find a clue.
It revealed there was an isolated filament winding in the low-voltage
transformer for the damper. That is, it was supposed to be isolated.
A resistance check showed there was an 800-ohm short from this
winding to ground. The transformer had to be replaced.
The bill was high. The set owner, after hearing the sad news
said, "It's going to take me a month to pay the bill." Then he asked,
"Is there any way I can get the set now?"
The set owner was asked if he had a checking account. He answered
yes. The customer was then instructed to make out a check. He was
informed that the check would be held a month before cashing it.
All he had to do was cover the check by the time the month had elapsed.
The TV was then delivered, a check was paid for it, even though
the check lay in a drawer for thirty days, and everybody concerned
It's been a year now since the owner of that three-man organization,
mentioned at the beginning of this story, has been on the C.O.D.
standard. Actual results show it has been a wise move. In comparison
to the previous year's $1200 in delinquent accounts, this year's
record didn't reach fifty dollars, and these few lost dollars can
be directly traced to professional beats.
The volume of calls has increased. The owner attributes part
of the increase to the "no-credit" policy. First of all, he claims
that he has gained customers because he no longer loses his clientele
by having to hound them for money. Also, he no longer loses clientele
because they are ashamed to call him when they owe him money.
The fact that a TV service outfit is on the C.O.D. standard doesn't
mean there are no longer any forms of credit. An outfit must bend
a little to cater to the few inevitable requests. But each request
will fall into one or overlap into a couple of the four types noted.
If a TV company is prepared with stamped envelopes, a bit of dramatic
salesmanship, official cognovit notes, or the holding check gimmick,
the credit requests can mostly be satisfied without a loss of customers.
Posted December 23, 2013