What’s your credit policy? Let us Know.
I just recently saw a commentary by Mike Young of The Book Bin describing his new book credit policy that will come in effect at the new year. I think it is a terrific idea and believe that all those offering to let buyers use nothing but credit should take notice. I don’t think it would be tough to get you all to agree that selling used books is, financially, a tough business. More needs to be done to improve the bottom line. This is an easy to implement idea that your regulars will have no problem with and it will have a direct impact on your cash flow.
As always comments are appreciated.
The commentary was seen at the Old Bookstore Group. If you run a used bookshop and are not a part of this group you owe it to your business to join up. There is simply no better group of peers around.
Here is Mike’s Message:
Hi All! January 1st is a big day for us as we are changing how we do
business. In the past we would give a book credit for books that could
be used on more used books in the store, no exceptions. Most of the
time we were playing library as cash was coming in on amounts people
were spending over their credit but we are finding that people are only
spending their credit and nothing to pay the “rent” so to speak. Jan
1st, we are allowing people to use 50% of their book purchase towards
their credit and pay for the other 50%. We are hoping that this helps
cash flow in our book end of business. We also sell dvds, music, video
games, etc. which has been supporting cash flow but we think that we
can do better. How do other people in the group handle these issues?
Has anyone attempted to do the same as I? If so, how did it go?
Enquiring minds want to know! hehehe As always thank you all very much!
I have learned so much here!
Mike Young from The Book Bin
I started implementing a 50/50 credit policy this year, if you don’t you end up drowning in books (like me) and having no cash in the til (like me). Those that don’t like it didn’t buy their books from you in the first place and you don’t owe them anything. They had to have books from elsewhere or they wouldn’t want to do credit only.
It is quite absurd that this, the secondhand book store, is the ONLY business where people expect to obtain goods or services without expending any MONEY.
Imagine if every single customer came in and did 2for1 credit only?
[...] more. She never buys a book, in the dozens of times she calls in she never buys a book. You have to pay her cash for her books. She even asks to take a book and pay for it the next time she comes in. After all, she is your new [...]
[...] I was giving pretty generous store credit to find customers picking the eyes out of my stock and carefully calculating the prices so they [...]
I did not see a credit policy at that website
Our policy from the start has been to allow people to use 50% of
their credit and pay for the other 50% in cash. We looked at several ways of handling trades, and we thought that the 50/50 policy would work the best. Outside of having to explain how our trade policy works, we have had no problems with the policy. Occasionally, someone who has just moved to our high rent area (outside of Washington) from a low rent area will complain. However, when we explain if we did not have the 50/50 policy we our cash flow would not be enough to support the bookstore, they catch on to our reasoning.
As for buying books, we maintain a firm policy of not buying. We literally would be swamped with books since we get three to six and sometimes more calls a day from folks wanting to sell their books. As it is, in only accepting trades, we have to stop taking on books at times just to deal with the volume of books we do get in trade.
Sometimes, we even have folks that want to donate books to us just to get rid of them, and some of those folks will buy books without wanting to use trade credit. In some ways, I get the feeling that they want to help us out, so that we stay in business.
My standard policy for books is I give 25% in credit for books coming in. Book going out go out at 50% of cover price, PLUS $.10. The 50% is half cash, half credit.
Generally works well.
I generally have 2 “full credit” days per year (on days I’m NOT normally) open which are sent out the the mailing list. Then they can buy on credit only… though many customers wipe their credit that day.
I’ll also do a few “selected full credit, online only” sales where I sell off old inventory to the mailing list for credit only. These are books culled from the database for being too old. it freshens up the shelves and some of them never come back.
Josie,
If you have a great deal of books in stock why not try running a promotion such as “buy 2 books for cash and get the third one with 100% of your credit.” Or some similar promotion.
You might also consider running a senior day special where seniors can used their age as the amount of credit they can apply. So a 65 year old could use 65% credit and the rest cash while a 90 year old could use 90% credit and 10% cash.
I bet you could get a good deal of free press from such a policy which may draw in a new crowd. It would make a good news story so definitely send out a press release to all your local media outlets.
Do you cater to any particular market, such as homeschooling? Target a niche and you may find a solid stream of new customers.
Rhonda
[...] you can to watch cash flow. Cash needs to be coming in all the time. One tweak you can do is the trade/credit policy. We did a straight credit system. Give me $20.00 worth of books and you can spend your credit as [...]
[...] in fact the only people that would probably mind are those that were only taking advantage anyway. Click here to read a bit more on credit policies and feel free to add your own [...]
Just thought I’d drop in a give my 2 cents also. I have a store in a 9400 population town that has no factories, just fast food and health care workers. It’s rough making ends meet here and the strip mall was sold 2 years ago and the new owner just raised the rent 40%!!!! It’s going to be rough. I have always allowed 25% of the new book price in trade credit with a 20% of credit used in cash. I have debated the 50/50 and it wouldn’t fly in this town. They don’t have the $$$ for the cash part. What I am going to do as more cash needs to be generated is rewording the trade policy to state…you can now use 75% of your credit towards your purchase and 25% will have to be paid in cash, check or charge card. We just need to have more cash. I have enough books for me and another store!!! I do have ‘cash only’ departments such as paranormal because no one brings them in and wants to trade Grisham books for them. Al of you store owners know how that goes. I want to stay in business and want repeat customers but the electric company will not take books!!!!
One more note…have any of you heard about the children’s books and lead paint? Alibris board is talking about it but I have heard NOTHING from anyone on it.
Thanks
Josie@
THE BOOK EMPORIUM
Here at Blue Plate Books in Winchester, VA, we don’t offer any trading.
We buy books for cash that we think we can sell.
We sell books for cash (or credit card) we think that people want to buy.
We think that this is an advantage because:
- The cash we give to people can be used either in our store – or in any other store. (It is quite often used in-store.)
- People have come to us to sell their books because they’ve accumulated too much credit at other used bookstores – credit they say they just can’t use.
- Our accounting, our customer policies, and our customer conversations stay simple. When people ask us to explain how buy, sell, or trade, we are able to tell them: “We keep it simple. We buy books and we sell books.”
Blue Plate Books carries a wide variety of stock, including hard and soft cover fiction and non-fiction, as well as first editions and collectible books.
I frequent a used bookstore in the town next to mine. Their policy has always been that you could only use a portion of your credit on any book you wanted to purchase. The store is more for romance novels and paperback books (not of interest to me) but I occasionally find a good business book there. It is a good source of children’s books and I am trying to get my nephews to appreciate browsing used bookstores. It is like a treasure hunt, you never know what gem you will find.
Mike,
This is a great idea! I am so glad you posted about this. With the economy such a mess and people struggling everywhere, this is a great option for some. Hopefully you will do well this coming year, I would think more and more people would be buying used books rather than new, because every single penny counts now more than ever!
Good luck in all that you do!