Does your company apply finance charges to customer balances?
- No 44% 118 votes
- Yes 46% 123 votes
- We did and then discontinued 4% 10 votes
- We are considering it 2% 6 votes
- Other 5% 13 votes
Rajesh Prasad, CBA – It is not a good practice to apply finance charges to customer balances. Some customers come back and request refunds months later. We notify them if we are to apply any credit balance to the open or remaining balance.
Debbie Williams – We add sevice charges to their account monthly if they account is past due. We offer to negotiate the fees when the accounts becomes current. Usually we will split service charges 50/50 for good accounts.
D Marc – Yes, our customer agreement has a provision for service charges and the system automatically applies them after a certain grace period. It’s not right to penalize our good customers by raising pricing so we can cover the additional financing costs of delinquent ones and some of our divisions have very slim margins. If we had no intention of collecting service charges, we wouldn’t bill them. We do consider adjusting if it’s a 1x situation and we will occasionally negotiate a split but we try not to be discriminatory.
Steve Gardner – We apply finance charges to every overdue account and use it to encourage faster payback and use the fees to negotiate a final payment. If it is not forgiven, then we use it in the total when we turn it over for collection to get a higher payment that offsets the collection fees.
F. Scott Wilson – We are reinstituting finance charges for some of our customers. One of our companies uses a different software, so any products purchased from that company are not accruing finance charges; the rest are. We decided to do this because it costs *us* money to cover debts held for a long time beyond terms. If we don’t charge interest, there is little incentive for anyone to make sure they pay us sooner, rather than later.