Tan Oasis

What is the best thing to do when EFTs are processed and they come back from the cc company processor that the customer's charge was declined?

Should I send them to a collection agency because they did not sign a cancellation form and their payment has not been made?

Some of the time it is because the expiration date has changed. So the account is marked unpaid and then when they come in they update it in order to tan. But, I seriously want the money to come in even if they don't tan.

Other times the customer 'forgets' they have a contract to continue paying their EFT unless they submit a cancellation form. But, some do not come back in (am located near a training Army post) and then I am left hanging. Those still have an active contract, but seem to forget about it.

It is hard to run a business when you can't get the customer to stand up to their part of the deal. I still keep my lights on and the beds ready and the place staffed for them.

Also, is it my manager's responsibility to go after the declined EFTs? By this I mean calling them (nicely at first), writing letters, etc. My manager gets 50% of the first month EFT price. Just a side note, I believe the manager got most of the May - June enrollees to sign up by saying they could cancel after a month's draw. Well, the manager made their money the first month, but now the second month when the salon is to make its money, lots have not continued either by cancellation form or by having declined cc.

Should I put a minimum number of months on an EFT contract, would that make it more meaningful to them? But, would it matter if they don't want to pay they just don't pay.

Feeling abused here,
Maggie

P.S. I am sorry if I sounded like I was cruel and rambling, but the JASON months scare me and I try to prepare for them with the EFTs.

CrystalSS

Here is what I do. I am sure there are many others that operate differently. I am not in the contract business, but people do have to cancel a membership for it to stop drafting.

If an EFT declines we make a total of two phone calls. One at the first of the month and another on my cutoff date, the 25th of the month to tell them that it has to be paid NLT the 30th or it goes to collections with an added fee. If they have paid then it is dropped. If not paid by the 30th then the following happens.
1. Account is canceled
2. Member gets a $20.00 fee added to the amount they owe (to cover admin fees and paperwork to collections)
3. Account goes to collection agency and I no longer own the account. If they call or come in they have to deal with collections
4. I have so many people calling to fix the account because they want it off the credit report. SO many people want to refinance or get credit and right now a bad rating is the kiss of death.

It does not come off the credit report but it shows you paid the delinquent account.

Secondly, not sure WHY you are giving 50% of your monthly on a new sign up to an employee? Big mistake in my book...make it a small commission like any other sales commission. We do 7% on sign ups.

As far as contracts...that is your call. However, everyone (to include your manager) will find a hole in your system. If I were getting 50% of your take you better believe I would talk customers into just doing a one month EFT. We would be crazy not to.

Best wishes!

caribbean tan man

see this is why i dont do eft...

im gunna put my head out here and say i cant beleive u guys send this to a collection agency..that is just ridiculus. ruin someones credit over a unpaid tanning package.

i would suggest u just cancel the account and attempt to collect the fees youve been charged(if any) and hope 4 the best.

a nice not explaining what happened and that if they can come in and clear it up either with cash or another card would that be great or fill out the cancellation forms if the no longer want the privelage of this program

__________________
someone PM me when a good tanning topic is posted. :lol:

exoticexposure

how do you send a past due account into collections if you dont have a social security number? Do you get them when you sign people ip on EFT?

JACKED247

After reading this post I started thinking as I first stated I come from a fitness background and EFT is the main drive behind monthly income. I have a guaranteed amount based on the amount of members on EFT to go towards expenses and we try to grow the EFT membership each month. Yes as you stated there is a problem when you put through a bunch of EFTs a month and they decline...it kills the $ coming in and then the process begins with calling etc which to me becomes a waste of time. What we do is when a member signs up for EFT we do give a monthly discount versus if they were to pay month to month and the kicker is they MUST commit to pay forward 3 months and 1 month prior to expiration we then tier them to 6 month commitment pre paid and then from there you can create your own system. Giving a % discount offers a huge incentive to lock in the month rate....if 1 year membership to the gym is $1200 so $120 per month we do 75$ per month EFT and pay forward. This way we are guaranteed the EFT amount and it has prevented a huge stress with wondering each month if credit cards will be approved or declined.

DB Hottie

Jacked247- Do you do EFT or do you just prepay 3,6,12 mos, etc at a time? I'm confused by the way you described it.

Our way of handling EFT declines:

Like you said some are declines other are invalid expirations. We put a balance due on the account and call them, most of the time they will come in to clear the balance immediately. They may not tan until it's paid. If they don't pay the balance due within one week, we cancel the EFT and they must resign up with all applicable sign up fees.

It is more costly to go after these individuals than it's worth. We used to offer EFTs with minimum of 1 year contract. When they went unpaid, we would send certified letters $7; file with small claims $80; my time $priceless= Forget it! I never lost a case and was paid for almost all. The only ones I could not recoup were from people who relocated and I did not have a valid address for the courts to persue them- I was still out the $ for letter(s) and filing fee.

JACKED247

@ DB hottie

sorry sometimes i have an idea and type as I am processing it. Yes what we do is have them "prepay" for the plan they choose either 3 month, 6 month or 1 year. Each tier allows for a larger % off hence they are getting a deal for all 3 tiers so options are pay as you go month to month with no % off OR get 10% for 3 months pre paid, 15% for 6 months and 18-20% for EFT prepay for 1 year. That way I am not sending letters and wasting time it is factored in as generated income. sorry.

engfant

Stop taking EFT and charge real money.

JACKED247

@ engfant

sounds like someone is sleep deprived.......

engfant

When people charge $20 for a month and I charge $20 for 3 visits in basic beds how is EFT better again?