II. Canadian Agent of German Manufacturer of Cameras Complains About Defective Shutters

Baumann & Schmitt

Munich, Germany

Gentlemen:

Recently we have received several complaints from customers who state that the shutters in your cameras do not function properly.

You will certainly understand that the dissatisfaction of our customers with your products is a matter of great concern to us, as it might cause a decline in sales. Since the prices of German cameras are higher than those of comparable American products, we have always emphasized in our advertising the excellent workmanship and dependability of the German cameras. If they lose this reputation, it will be very difficult for us to maintain our present position on the market.

As this matter is very urgent, we hope to receive your comments by return mail.

Very truly yours,

Campbell & Co. Ltd.

III. Customer at Fault - Claim Refused

Dear Mr. Tower:

We have received your letter of May 19 and the Slumbertone Clock-Radio which you want us to repair free of charge under the terms of our guarantee.

Our Repair Department has carefully checked the clock-radio and reports that it has apparently been tampered with, as two tubes and the loudspeaker are damaged.

Since our guarantee covers only faulty material and workmanship, we cannot assume the repair costs ourselves. However, we would charge you only $10. If you want us to go ahead with the work at this price, please let us know at once, and we shall return your clock-radio in perfect working condition in about three to four days.

Yours sincerely,

X. Collection Letters

Delays in Payment and Non-Payment—Reminders and Collection Letters

Delays In Payment and Non-Payment

Just as the buyer follows up his orders, the seller keeps an eye on his customers' unpaid invoices.

When a customer fails to pay his debts on time, the seller sends him a reminder. If necessary, the reminder is followed by increasingly urgent collection letters (or: dunning letters).

Should the customer fail to respond to these letters, steps have to be taken to collect the account. This may be done by entrusting a collection agency or bank with the collection, or by bringing legal action against the debtor.

Collection agencies are commercial establishments specializing in the collection of bills. (Inquiry agencies usually are collection agencies at the same time.)

Collection through banks is effected, in most cases, by means of a sight draft. The creditor draws a sight draft on the debtor and hands it to his bank with instructions to pass it on to the debtor's bank for presentation for payment. Although the debtor cannot be forced to pay the sight draft, he will usually honour it if he is able to do so, as he knows that his refusal to pay will give the banker notice that he is in financial difficulties, with the result that the banker will demand repayment of outstanding loans and refuse to grant the debtor any new loans.

Reminders and Collection Letters

When an account becomes overdue, it is first assumed that it has been overlooked by the customer. Therefore the account is brought to the customer's attention by means of a copy of the invoice or statement, a printed notice, a letter, etc. These are called reminders. When sending invoice copies or statements as reminders, many firms add a rubber-stamped notation (Past due — please remit), a printed card, or a gummed label (collection sticker). The letters employed as reminders are usually form letters. Sometimes a reminder is included in an offer or sales letter sent to a customer (hidden reminder).

If the reminder does not produce any results, it is followed by two or more collection letters. In these letters various arguments and appeals are used to obtain payment or at least an explanation from the customer.

Specimen Letters

I. Collection Letter

Dear Sirs,

We wrote you on 5th March asking for payment of the overdue balance of £ 161.38, but so far we have not received any reply from you.

If there is an error or any other reason why payment has not been made, please let us know, and we shall look into the matter at once.

Otherwise we must ask you to send us your cheque without further delay.

Yours faithfully,

II. Lawyer Makes Last Request for Payment

Gentlemen:

My clients, Smithson & Co., have informed me that their repeated requests for payment of your long overdue account for $638.50 have been ignored by you.

This is the final demand for settlement on an amicable basis. Unless payment of the above amount is made immediately, I shall be compelled to institute legal proceedings against you without further notice.

Yours truly,

III. Customer Makes Payment on Account—Asks for Extension for the Balance

Dear Sirs,

We have received your letter of the 10th August and are sorry for the delay in settling our account.

Owing to the slackness of trade during the past few months, we have not yet been able to dispose of your last consignment. Besides, many of our customers have been slow in meeting their obligations.

We are sending you a cheque for £50 on account and should be grateful if you would grant us an extension for the balance until the 30th September. You can rely on receiving a remittance in full settlement by that date.

We should be greatly obliged to you for accommodating us in this matter.

Yours faithfully,

Encl.