Our least favourite aspect of the business is debt collection. Late fees are an essential component and yet always unfortunate. Quite often when chasing late fees we are accused of profiting, which confuses me. Obviously the purpose of late fees is to recoup lost revenue and if we were to profit from them then we wouldn't be offering massive reductions and amnesties whenever possible (we offer 50% off ALL late fees when settled upon return). Anyway my point is that no one likes late fees, not least of all us.
The general practice of debt collection (at my store) is as follows.
1 sms or phone call when 2 days late.
1 sms or phone call when 3 days late.
1 sms or phone call when 4 days late.
1 reminder letter when 5 days late.
1 final notice letter when 10 days late.
Title removed from account, marked as stolen and account sent to debt recovery agency.
Debt recovery agency then sends 2 sms's or phone calls over the course of 2 weeks (on our behalf).
Debt recovery agency then sends a soft letter on our behalf, which offers 50% off upon return.
Debt recovery agency then takes on the debt as their own and pursues by whatever means necessary.
A similar process is undertaken for debt that has been sitting in our system, which has gone unattended. Every 6 months we do a sweep of the system to address any monies owed that have been ignored or neglected. Members who have lapsed but still owe money are sent a friendly reminder in the mail, which will offer them a generous reduction. When such letters are ignored we hand the accounts over to our nominated debt recovery agency and they implement their usual process. It's important to note that we do not add interest on to outstanding debts.
Last month we sent over 200 accounts to the agency for debt recovery and, as usual, we are now getting inundated with angry phone calls. We're used to it. What I find hilarious is that people are so willing to speak to me when they received a "notice of action" from the debt recovery people but ignored all of our previous attempts to resolve the matter. Not only had we attempted to settle the matter 8 previous times, we had also offered them massive reductions during that process. Only when it's too late for amnesty and the threat of legal action is imminent do they bother to make contact.
Of course I am a nice guy and I hate chasing people for money and so in most cases I offer up to 90% off their debt and invite them back with free or discounted hires. A fresh start, if you will. Most people then come around and change their tune and we are seeing a big return to the rental environment. With the prominence of blu-ray, home rental has become a popular thing again with families.
Now if only they would learn their lesson and return on time OR address any debts straight away they would find rental to be a wonderful thing. ie... interaction with knowledgeable staff, an extensive selection of oddities & obscure titles and bundled offers & deals that cannot be rivalled. We offer community and a social connection to cinema.