With Etsy, eBay, Pinterest and any number of other e-commerce business transaction options, you may never see your customers face to face or know their stories. When your clients do not live in your neighborhood (or even your country) and they have past due accounts, how can you go about collecting the funds? If your business is online and payments are made online, what “paper trail” do you have that proves the debt?
Record keeping
Online transactions are an inevitable aspect of business in the 21st century. It is just as vital to have a debt collection process in place when you have an online business as it is with any other type of business. Keep a file for each customer that includes purchases as well as billing information, with dates, as evidence of a purchase. Also keep track of shipping information like when the shipment went out, what service was used and a tracking number. That enables you to communicate with the shipper should the order be lost in transit and prohibits a debtor from claiming they never received the order. If an item is returned for any reason, make note of that as well. These customer files differ only in that they are virtual or digital instead of stuffed inside a manila folder in a file cabinet.
Truth be told, there should be significantly less unpaid bills for an online business, because a customer’s financial information is usually provided up front, before the product is delivered. You may, however, encounter chargebacks from the credit card company if your merchant services provider does not verify account standings prior to accepting an order. In fact, online financial transactions have the benefit of verifying funds before you ship. Using PayPal or a shopping cart program with a merchant services provider for credit card transactions offers two benefits:
- Funds may be verified at the time of purchase.
- There is an online record of the order request as well as contact information that can be used in the case of a chargeback.
Other considerations
Online commerce, more often than not, occurs across a wider geographic area than any other type of business. It’s the nature of the Internet. The difficulty of such a broad expanse of business territory is that financial laws vary from state to state and country to country. For this reason, it is a good idea to work with a debt collection agency that has experience in a wide variety of locations as well as a network of lawyers who are familiar with the legal nuances in their particular area.
Online debts are recovered in much the same way as any other debt, by locating the debtor, making professional contact regarding how they will pay past due funds and, when necessary, legal proceedings. If anything, online tools make debt recovery even easier for our team of professionals, enabling us to use a variety of databases, contacts and other tools that were unavailable prior to the Internet revolution.
