Have my first non paying customer. What are my options?

[cypress]

Yes, you're right. Thanks for all your help.

Jesse

**Knock on wood** I haven't had to deal with this before but the past couple of months I have really made it known about my warranty terms and Terms and Conditions. I use the Repairshopr software that allows me to have that printed on the invoice; and I also direct them to my website if it is a new client and we haven't done business before so they get familiar with the terms. Like mentioned before the State laws vary but this is your time and you don't want to have it wasted.

 

[pceinc]

You may be able to research the laws on your own without incurring any attorney fees. Look up laws specific to unclaimed merchandise/equipment for repair or dry cleaning services. I know it sounds strange but my attorney found out many states use the same blanket law that is used for dry cleaning establishments since it's been around for so long. Here is how it works in Maryland.

You can only dispose of the owners belongings if you had them sign or have in plain site a policy stating the fact. Such as all items left over 30 days will be disposed of. If you don't have this posted or did not get a signature, you must mail a delivery receipt letter of intent containing the original invoice plus storage fees if applicable and wait 30 days before disposing of the belongings. If relying on a letter, you cannot dispose of belongings before 90 days of when first contact was made. So if mailing a letter, you would want to mail the letter on day 60. The last option is to do nothing but call and hound them, after 180 days. It's yours. No letters required.
Again the above is how it works in Maryland. My attorney also searched for specifics related to data and whether the data on the device would fall under the same terms and the answer was yes. It's the same as if someone left a note, a check, or a wad of cash in a jacket pocket and left it to be cleaned. If they don't pick it up, they can't cry about wanting something that was in the pocket after it was disposed of.

If it were me, I'd leave them a message and send a demand letter for payment stating it's been X amount of days and unless they claim the items before specified date it will be disposed of. It's probably best to keep it until you do own it and can sell it for the repair cost rather than giving it back and risking them going crazy for showing up uninvited. I would strongly recommend against that.

 

[ComputerPro]

You have the most awesome company name by the way! Lol.

Check laws in your state and have the written policy on your claim ticket and invoices.
Ours says:

Not responsible for loss by fire, flood, and theft, or for goods left over 30 days. Items left over 60 days will be sold for parts to recover money and time invested.
Not responsible for data loss. It is the customers responsibility to have all data backed up prior to repair. Failure to do so may result in loss of data.
The following items are not returnable: Software, Printers, Scanners, laptops & desktops

I'd send the required certified letters (or whatever is legally required in your state) and then sell the unit. Personally I wouldn't give it back if she agreed to the repair. You would just be out the time and money, and she obviously doesn't give a care. You need to get paid for your work. Give here the option of a diagnostic charge maybe.... $39 or so. You have to cover your time somehow. With what you described I'd rather sell her unit.

 

[Kitten Kong]

<snip> have the written policy on your claim ticket and invoices.

Not responsible for loss by fire, flood, and theft, or for goods left over 30 days. Items left over 60 days will be sold for parts to recover money and time invested.
Not responsible for data loss. It is the customers responsibility to have all data backed up prior to repair. Failure to do so may result in loss of data.
The following items are not returnable: Software, Printers, Scanners, laptops & desktops.

We would be in so much trouble if we did this over here Terry.

Irrespective of what our terms and conditions state, the sale of goods act trumps them hands down.

The responsibility over data loss we would be covered for. Software if unopened also covered. Anything else forget it.

 

[NETWizz]

I think what people say is not as regulated as what the laws actually say.

For example, you might say you are not responsible for fire, flood, theft, etc., but the reality is this is exactly why you have insurance. If you are negligent, you are certainly responsible regardless... even though there is no intent.


************************

That said each and every one of these folks have more experience than I do, so what they are saying works fro them. You cannot be on the hook forever.

 

[gadgetfixup]

Unfortunately we've had a couple claims due to a neighboring business catching fire and business break-ins at our store. None of the times has our insurance been forced to cover the claims for customer property although we were adequately covered. It was a real shocker to us as well. Seems almost all insurance policies have wording that protects business owners and forces losses to the customer's home owner insurance policy. It was tough for us to call customers and explain that although we have business insurance, they won't cover your personal property and you'll have to contact your own insurance company to file a claim for loss.

We did have one person try to sue us but we just handed the paperwork to our Insurance agent and told them to handle it. They cited some State law and couple of Court cases to the customer, his Attorney and they dropped the action.

Contract law in our State, Indiana, provides a lot of protection against data loss and other losses because there isn't any State law that addresses our specific industry. We even have a 7 day abandonment clause which is completely legal because we aren't in specific industries where State law regulates abandonment. Although we don't aggressively enforce our 7 day clause we do use it to move us up on the "bills getting paid" priority list.

In States that regulate abandonment I suggest you install a "storage fee" for every day the device is sitting on your shelf. We get aggressive after a week because of those losses we previously incurred. It's tough to call a customer and tell them, "I hope you have insurance on this computer that was stolen or damaged in our shop due to no fault of our own". The longer you let customers store their equipment with you, the longer you stretch your liability without compensation. Increasing your exposure to claims without compensation is just bad business. Minimize your risks making legal policies to keep only items in progress stored at your facility.

 

[nlinecomputers]

If they are not going to pay you for the repairs/upgrade why will they pay for storage? Good luck collecting it. Better to try and setup your intake so that you avoid that kind of problems. Diagnostic fees will kick alot of deadbeats to the curb before anything happens.

 

[MikeLierman]

A couple of things that a few here have already mentioned, and a couple that haven't. First off, I've been in this situation 3 or 4 times in the 6 years I've been in business. I can tell you from experience, I won't be reverting a computer back to the way it was and hand delivering it to a customer. My time is far too valuable. We have a $35 diagnostics (which includes a 21-point inspection) at the shop which is waived if they decide to have us fix the computer. I have now and again, reassembled computers back the exact way they came in, and charged the customer $35 diagnostic for our time determining what the problem was.


The first non-paying customer was a good client of mine, was doing some web design for him, and all of a sudden he stopped paying. Claimed he was having a rough time with the starting the new business. He owed reoccurring payments monthly. After two missed payments, I shut off the site I was designing.

Second time, was a few months later--same client. He brought in his laptop for repair. Needed a new HDD. I finished repairs, and just like the website, it just sat there and sat there. 2 months went by, without a word from him. So I left him a warning voicemail that I was going to sell it. And then sent a certified letter requiring a signature. He refused to sign for the post lady so it was sent back to me after 3 attempts on their part. So it was sold. 3 months later he asked if I still had it. I politely explained to him that, no, I put in a new hard drive, and performed data recovery on the failing one. It was a bit of work and sold it to recoup my investments in time and parts. I'm not a dick to clients, but I try to be firm about getting crap picked up. I don't have tons of storage space. I struggle with enough space in our 900sqft office everyday.

The last time was a year ago, had a client bring in two laptops with all the keys ripped off by one of her kids. She was difficult to get a hold of, but didn't think anything of it as she seemed nice and respectful. Well we completed the repairs, the bill came out to exactly what we quoted her. She said hold on to them, I just had an unexpected bill come up that I need to address. Give me a week. A week later, called and called. No answer. Finally a month later she answers all upset because she claimed we took too long to do the repairs and the bill is much higher than when we first talked. It wasn't, she was just buying more time. 2 weeks later and several voicemail and her fiancé answers the phone. Gave me another sob story. Buttered me up and said they will pay it all as he knew we were being honest and patient. Asked to give him 2 weeks. Two weeks go by, he calls, sets an appointment, never shows. 3 weeks go by, I was about to sell one of them, had a buyer lined up, and he just said, forget it, he can't afford it instead bought her a new computer. I thought, "What??? Fixed vs new?? Clearly the new is $400, their repair bill is 387 for two working laptops." He asked if I can at least get the documents off for him and we can just keep the two laptops. I agreed.

 

[gadgetfixup]

If they are not going to pay you for the repairs/upgrade why will they pay for storage? Good luck collecting it. Better to try and setup your intake so that you avoid that kind of problems. Diagnostic fees will kick alot of deadbeats to the curb before anything happens.

Several industries do this, and the idea isn't to charge late fees but get paid as promised and reduce liability. At least with a late fee policy customers have incentive to get in there and pick up their computer. Practically every auto repair shop in our town has signs posted with this same idea of storage fees. They typically start after 3 days - lol.

The flip side is when a customer needs more time you can give them some more time and when they show up tell them our work order says we charge $10 a day over 7 days but we understand money is tight and things happen so we'll happily wave your storage fees. Then you look like the good guy to your customer.

 

[nlinecomputers]

Several industries do this, and the idea isn't to charge late fees but get paid as promised and reduce liability. At least with a late fee policy customers have incentive to get in there and pick up their computer. Practically every auto repair shop in our town has signs posted with this same idea of storage fees. They typically start after 3 days - lol.

The flip side is when a customer needs more time you can give them some more time and when they show up tell them our work order says we charge $10 a day over 7 days but we understand money is tight and things happen so we'll happily wave your storage fees. Then you look like the good guy to your customer.

Yes but computers are alot cheaper and far easier to walk away from. Round here I think it would cause even MORE to walk away than move to quickly pay up. PCs prices are just too cheap. One of the reasons I don't really do residential work anymore is because of that.

 

[ComputerPro]

The not responsible for fire, flood, theft etc... is standard verbage on a lot of claim tickets. Some won't stand up in court depending on the state and insurance intervention would certainly be needed. I think its there as a first line of defense mostly. Most will just read that and be done. Others may push the envelope and take you to court. You must have decent insurance if your in the service business really.
Ironically, we just had a lady call yesterday. She said she had a laptop in our shop that she forgot about. From 2012 or 2013 lol. She said she got a new system and just wondered about the old one. She didn't have a claim ticket or any other info and we've switched POS systems twice since that time, from MerchantOS to mHelpdesk to RepairShopr. After explaining our policy and telling her that the unit was most likely disposed of we assured her that her data would have been completely erased so none of her information would get out, she seemed fine and understood without any issues. A lot of it is the circumstances of that particular case and how its handled that makes the most difference in situations like these.
I forgot to add that we also have it written that goods left for extended periods will be assessed a storage charge of $1 per day. We explain that we are not a storage unit and storing any items in storage facilities would incur a monthly charge of some sort. It helps with the " even if we have your system after all these months, the cost would be quite a bit to get back ". This along with the 'systems left over 60 days will be sold to cover costs...' etc gives us the ammo to combat a lot of the people who would demand the ridiculous like 'I want my system back its been over a year' type of person.

 

[pceinc]

Unfortunately we've had a couple claims due to a neighboring business catching fire and business break-ins at our store. None of the times has our insurance been forced to cover the claims for customer property although we were adequately covered. It was a real shocker to us as well. Seems almost all insurance policies have wording that protects business owners and forces losses to the customer's home owner insurance policy. It was tough for us to call customers and explain that although we have business insurance, they won't cover your personal property and you'll have to contact your own insurance company to file a claim for loss.

We did have one person try to sue us but we just handed the paperwork to our Insurance agent and told them to handle it. They cited some State law and couple of Court cases to the customer, his Attorney and they dropped the action.

Contract law in our State, Indiana, provides a lot of protection against data loss and other losses because there isn't any State law that addresses our specific industry. We even have a 7 day abandonment clause which is completely legal because we aren't in specific industries where State law regulates abandonment. Although we don't aggressively enforce our 7 day clause we do use it to move us up on the "bills getting paid" priority list.

In States that regulate abandonment I suggest you install a "storage fee" for every day the device is sitting on your shelf. We get aggressive after a week because of those losses we previously incurred. It's tough to call a customer and tell them, "I hope you have insurance on this computer that was stolen or damaged in our shop due to no fault of our own". The longer you let customers store their equipment with you, the longer you stretch your liability without compensation. Increasing your exposure to claims without compensation is just bad business. Minimize your risks making legal policies to keep only items in progress stored at your facility.

Wow!, That does not bode well for returning customers. I specifically asked about this when we purchased our insurance and check on it when renewing each year. Our policy does cover customer machines/equipment. It also covers data since we added it to our E&O.

 

[Galdorf]

Canada is different customer has 30 days according to law to pay or pickup left equipment after that time it becomes abandoned property and you can sell to recover losses, you do have to try to make contact our shop has 120 days.
I get loads of laptops that are never picked up most are in good working condition i usually make a backup before wipe and sell.

 

[pcpete]

We would just be patient. Put it on the back shelf and call once a month. After 6 months to a year if she does not pay, let her know you are selling it to recoup costs. On the investment of $50 for a hard drive, one of two things will happen: you will get paid in full for the job and make money, or two you can sell a working laptop for a big profit. We do this all of the time and make decent money. Unless you need that $50 today to survive, let it ride and appreciate in value.

 

[gadgetfixup]

Wow!, That does not bode well for returning customers. I specifically asked about this when we purchased our insurance and check on it when renewing each year. Our policy does cover customer machines/equipment. It also covers data since we added it to our E&O.

Our policy has those same clauses and additions but when a loss occurs that isn't fault of the business owner you'll have a difficult time getting your insurance to cover customer losses of their personal property. Trust me we argued on behalf of the customer but our insurance Agent says the loss was not your fault so there is no claim against you for their loss. Their equipment could have been stolen from a car or their home and the coverage would be with their auto or home insurance. If we had done something to damage or lose a customer's equipment then our insurance would have covered it. You can't force your insurance company to pay a customer's loss any quicker than you can get them to pay your loss. Ultimately it's their decision.

 

[TenYardFight]

Lots of great advice here. Let me put it a different way...

1.) Don't spend another minute on (collecting) this. Your are compounding your losses. Use your time to get more work or refine your processes.

2.) It is ok to spend some time figuring out how to avoid this in the future, but rest assured of your are targeting decent customers, this will rarely happen. You might consider writing it off. Again, go get more work.

3.) Since there is no data involved, just sell the machine. Worst case you have to replace it with a comparable one after collecting from her. I'll tell you though. ..dollars to donuts you will never hear from her again. We are a pretty high volume shop. I have done this twice in 4 years. I still have both of those customers original hard drives. Or an image. Just in case

I would encourage you to reconsider tweaking your policies because of this one case. If it happens often, something ypu are doing is attracting the wrong customer.

Good luck and keep posting!

 

[CheddarPCsKP]

Out of interest what do UK shops do with a situation like this? I'm asking as we have one sat on our shelves gathering dust now.
It's an HP G6 fan replacement so not a great loss financially but seeing it sat there taking up space is starting to irritate me.
It was booked in at the end of January, job done inside 48 hours and SMS sent to the customer on completion as usual. Since then no response at all from the customer - over the last six months we've left VMs on his mobile and landline, sent a letter followed by a recorded delivery letter which was delivered and signed for.
I suspect he's bought another laptop and has no interest in this one any longer so I'd like to get shot of it. As I understand the law, after advising the owner of our intentions we're entitled to sell it for a fair price but have to pass the proceeds onto the owner less what he owes us, as we know where he lives. I'm not however prepared to go to the trouble of datawiping, reinstalling, etc just to recoup a few pounds for us and see the remainder go to the customer.
However, there's a decent screen, motherboard, keyboard, hard disk, RAM, and fan on it so it's worth something to us in parts - are we entitled to scrap it after advising the customer of our intentions?

 

[Kitten Kong]

Out of interest what do UK shops do with a situation like this? I'm asking as we have one sat on our shelves gathering dust now. <Snip>

The UK laws keep changing. Best thing to do, would be to contact your local trading standards office. Or consumer direct on 0345 404 0506. CD are now part of citizens advice bureau. They offer free advice to businesses as well as consumers.

Your correct with how it used to be.

Now the laws have changed (unless they have changed again).

You have to keep the laptop for a 'reasonable length of time'. What reasonable is, is up to you, and if needed a judge.

We used to have to keep clients data - no longer need to.

Used to have to pass remaining money back to client - no longer need to.

I would personally say, you've gone way past the reasonable time frame. Consider it yours now. But please check it out.

 

[ohio_grad_06]

You could also pursue small claims in the US. Even if you spend money on it, you might be able to get a lien against their car/property Which not that they would have to pay it right away, but if they should ever wish to sell the car/property, they would have to pay you first. I had a lady do the non payment thing to me once.

I worked on her laptop, which she had some type of software on that would NOT load. Brings it to me and says this has all my tax information on it for payrolls so you can't uninstall it etc. Ok, fine will do what I can. Note her hard drive was also failing, Windows Vista system, we'd been in business 3 years or so by this point. I spent hours jumping through hoops, cloned to a spare hard drive(told her this), worked off the spare, checkdisk, whatever I could think of to get her precious software to load. No dice. Ended up telling her nothing I can do to get it to load, sorry, writing off part of my time, bill was like 190 bucks. I deliver it to her home, her hard drive back in it which she agrees. The coward hides behind her kid. IE I get there, had given her the machine, she refuses to pay, and accuses me of stealing her failing hard drive from her Vista laptop(ok REALLY we can't do any better than that??) I go to grab the laptop and to start it up in front of her. Then she stops me, "no we aren't going to do this in front of my kids" I leave and never did see a payment. My wife was working for a realtor at the time, come to find out, same lady was trying to sell her house. I could have tried going to small claims to get a judgement and attached a lien to her house meaning she wants to sell her house, pay the bill. I didn't mess with it because I didn't care to see the lady again. But makes me realize why people said she'd been divorced a time or 2. That lady was a different case. Don't know how some people manage to stay breathing for 40+ years.

 

[CheddarPCsKP]

Thanks for that Nige - very helpful. I'll speak to TS; we've had a few conversations with them recently as we're applying for the BWC scheme. Assuming it's ok to do so I'll send another recorded delivery letter giving the owner 21 days to collect and then make the decision about selling it or scrapping it.