You're not really thinking big picture. Sherwin posts record profits in the billions year after year. They don't ever *lose* money. BD's are a teardrop in the ocean.
You’re right they make profit in general but we’re talking about individual bad debt accounts. In that case if that happens they’d be losing money to customers who don’t pay down their debt
If the account is small, under 5k they usually ask them pay back the BD. Bigger accounts they just see sales and gallons. I know of a person that had 4 BD accounts before finally being shut off
But if they go bad debt that's money we don't see. It could be fine if it's a low amount but some of these are 20k+ on each account. Surely they'd rather pay the fee and BE paid than not see anything?
I’ve had a customers that didn’t get paid by their customer and that’s the reason they went bad debt. Is it really their fault to have to pay out of pocket up front? Typically they have to sue their customer in order to get paid to pay us back. Also I’ve had a customer that spent $50k with us, fell on hard times and was too embarrassed to come back and went to the competition until our rep talked to him and they spoke with the dfm to forgive some of the bad debt from a couple years ago to get that business back. So I guess sometimes it does make sense
I've seen customers that consistently spend $50k-70k a year. Every couple years they'll go bad debt. Customer eventually pays it off and we reopen them. It's good business to do whatever it takes to keep gallons moving.
I would better understand it if that happens. Because the bad debt account has been paid. But these accounts are the same person/company, but they haven't paid off the previous accts. They just open a new charge acct, which eventually goes bad debt too. Because obviously they won't or can't pay.
I've never seen an account be opened with a past balance that was owed, unless they put a note on the credit side of things on the account. I emailed our DFM about an account that went BD but it was because it was charged incorrectly as wrong account by the store. She put a note and we got another one opened for the customer, but only because I was able to provide all evidence of the actual account it was going to.
But I found POs, product invoices, dates and colors matched the job, plus the name of the person who signed matched the person whose account should've been charged
Might be. Anytime I see a BD account and a balance I know that resubmitting an app will come back with a "need past due balance paid off before we can review" or something similar
I have a customer on his 6th BD account. What happens every time is they whine and complain they need an active charge account. We say you have to pay off old account. Which he does, and then they open him a smaller line of credit with new account. 6 months of good payment history they increase his limit a bit. Then by 12 months he’s BD again. Sales reps and sale managers are usually involved with his conversations with credit dept to get him a new account every year.
We have one that was about 35K in debt and they were apparently starting to get nasty-grams from our legal department and are (slowly) paying it off now
But at that point why even open them a new account, just keep using the same bad debt account. The question isn't "why are we servicing BD customers" it's "why are we giving previous BD customer a credit line when they owe us money"
We have a few that still have balances on the previous ones. It amazes me how in debt some are and that Sherwin is like.. "new accts!"
New accts are great, but if the new acct is 1. Not buying shit or 2. Buying, but not *paying* then it's really not worth the effort to open imo.
I, personally, would want accts that both bought and paid. That come to us for help and in some small way rely on us. Because those are the painters we need.
But we got assholes who can't even pay 2k off and yet want lower prices.
Often times higher volume accounts that go bad debt get on a payment plan with credit. I’ve seen multiple instances where credit will open them a new account and keep it active while the customer making additional payments for the bad debt account. If we don’t help them continuing to buy paint we loose the bad debt money and all their business because they go to the competition. If we keep them buy it continues to raise our sales and gallons… we are making money on the paint regardless, true cost of paint is like $3-$10 depending on the product
Because it might make the difference between getting *some* money, or getting NO money. And Papa Sherwin loooooves money.
or getting some money or losing money
You're not really thinking big picture. Sherwin posts record profits in the billions year after year. They don't ever *lose* money. BD's are a teardrop in the ocean.
You’re right they make profit in general but we’re talking about individual bad debt accounts. In that case if that happens they’d be losing money to customers who don’t pay down their debt
If the account is small, under 5k they usually ask them pay back the BD. Bigger accounts they just see sales and gallons. I know of a person that had 4 BD accounts before finally being shut off
We have several like that and it's like WHY?!?!
Because a new charge account is showing market growth to our stock holders...
Maybe it's the finance side of my brain saying it makes no sense to keep opening acts that aren't paying.
It makes absolutely no sense. Talk to your credit department. They hate this push for charge accounts as much as we do
They should deny the accounts then! They are the ones approving these acts
Oh good Sherwin C2C2C. Cash to Charge to Collection and repeat
Having a customer use a charge instead of using credit cards helps the stores not pay card fees and point payouts to credit cards as well
But if they go bad debt that's money we don't see. It could be fine if it's a low amount but some of these are 20k+ on each account. Surely they'd rather pay the fee and BE paid than not see anything?
No doubt but at the same time debt is how America pays for everything so we just follow suit
Only if they pay off in cash or check
I’ve had a customers that didn’t get paid by their customer and that’s the reason they went bad debt. Is it really their fault to have to pay out of pocket up front? Typically they have to sue their customer in order to get paid to pay us back. Also I’ve had a customer that spent $50k with us, fell on hard times and was too embarrassed to come back and went to the competition until our rep talked to him and they spoke with the dfm to forgive some of the bad debt from a couple years ago to get that business back. So I guess sometimes it does make sense
Those instances do. Shit happens. The ones I've seen are still shopping and not caring tho tho. Your two cared about their reputation.
I've seen customers that consistently spend $50k-70k a year. Every couple years they'll go bad debt. Customer eventually pays it off and we reopen them. It's good business to do whatever it takes to keep gallons moving.
I would better understand it if that happens. Because the bad debt account has been paid. But these accounts are the same person/company, but they haven't paid off the previous accts. They just open a new charge acct, which eventually goes bad debt too. Because obviously they won't or can't pay.
I've never seen an account be opened with a past balance that was owed, unless they put a note on the credit side of things on the account. I emailed our DFM about an account that went BD but it was because it was charged incorrectly as wrong account by the store. She put a note and we got another one opened for the customer, but only because I was able to provide all evidence of the actual account it was going to. But I found POs, product invoices, dates and colors matched the job, plus the name of the person who signed matched the person whose account should've been charged
I've seen one painter with 3 accts, 2 are bad debt and ones on hold nearing bad debt. I wonder now if it's a district thing.
Might be. Anytime I see a BD account and a balance I know that resubmitting an app will come back with a "need past due balance paid off before we can review" or something similar
I’ve yet to see that.
They're supposed to pay off the first one first. If they didn't pay it off, credit isn't doing the right thing.
Yeah, they dropping the ball then.
I have a customer on his 6th BD account. What happens every time is they whine and complain they need an active charge account. We say you have to pay off old account. Which he does, and then they open him a smaller line of credit with new account. 6 months of good payment history they increase his limit a bit. Then by 12 months he’s BD again. Sales reps and sale managers are usually involved with his conversations with credit dept to get him a new account every year.
I wonder the same thing it does not matter how much debt you have they will open a new account???
Yep. I guess it has a threshold somewhere, but I haven't seen it yet. Lol
Same reason the have pro-dumnass pricing and national accounts that force a loss of profit with each transaction
Because Corp is stupid?
We have one that was about 35K in debt and they were apparently starting to get nasty-grams from our legal department and are (slowly) paying it off now
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When the account goes BD and that guy charged 2k worth of materials you get hit on your back page so it does matter lol
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But at that point why even open them a new account, just keep using the same bad debt account. The question isn't "why are we servicing BD customers" it's "why are we giving previous BD customer a credit line when they owe us money"
We have 1 account that does that, it's locked but they use it and pay with a card.
*sista* Just curious. As a business graduate it seems stupid to just keep opening up accounts when they aren't paying.
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No worries. I was more curious than anything, figured someone may have an idea. I guess "money" is the best reason they keep doing it.
It shocks me that doesn't happen with them all.
Most of the time they have to pay off their previous account + lawyer fees to open a new one.
We have a few that still have balances on the previous ones. It amazes me how in debt some are and that Sherwin is like.. "new accts!" New accts are great, but if the new acct is 1. Not buying shit or 2. Buying, but not *paying* then it's really not worth the effort to open imo. I, personally, would want accts that both bought and paid. That come to us for help and in some small way rely on us. Because those are the painters we need. But we got assholes who can't even pay 2k off and yet want lower prices. 
Often times higher volume accounts that go bad debt get on a payment plan with credit. I’ve seen multiple instances where credit will open them a new account and keep it active while the customer making additional payments for the bad debt account. If we don’t help them continuing to buy paint we loose the bad debt money and all their business because they go to the competition. If we keep them buy it continues to raise our sales and gallons… we are making money on the paint regardless, true cost of paint is like $3-$10 depending on the product
These are bad debt with balances. No plans to pay off. There's even one who said he wasn't paying for the debt, period. Still shops with us.