Addressing Lack of Authority to Order as Justification for Non Payment

From time to time, a delinquent customer will claim the person who ordered merchandise did not have the authority to do so.  The key to addressing this claim is to know exactly how to handle it.  Lack of authority is not an accident.  It is a tactic used by debtors to avoid dealing with their past due balance and such this is a well-known and effective negotiation tactic.

I suggest a simple and straightforward approach that involves these simple steps:

• Thank your customer for the information.
• Express your concern about the breakdown in the customer/debtor's internal controls.
• Suggest that you see two options to resolve the problem quickly and amicable.
• The first option involves the debtor immediately returning the goods in question.  (Obviously, this tactic would not be applied if the product in question was customized).
• The other option, assuming that the debtor company wants to keep the merchandise in question is to require and expect immediate payment in full for the past due balance irrespective of whether the employee in question did or did not have authority to place the order.
• Explain that there is no third option or alternative for the debtor to consider.  They can either pay for the merchandise or return it.

This technique forces the customer to make a decision because they cannot have it both ways.  They must either they keep and pay for the merchandise immediately, or return it immediately.

© 2009 by Michael C. Dennis.  All Rights Reserved