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.

Yahoo Old Bookstore Group

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

15 thoughts on “What's your credit policy? Let us Know.”

  1. 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!

  2. 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.

  3. 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.

  4. 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

  5. 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

  6. 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.

  7. 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.

  8. 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?

  9. True, the 2 for 1 book exchange plus a small exchange fee, does not work any more. There is increasingly high rent to pay! About 5 years ago we changed our policy to ‘Bring in a book and get one of our books for half price.’ We carry used paperbacks, mass market and trade sized, and some not ‘in paperback yet’ hardcovers.

    What made the transition easier for our customers is the way we price our books. We do not charge 1/2 the cover price. All books under $5.99 are $2.00, books from $5.99 to $7.99 are $3.00 and ALL books over $7.99 are $4.00, including trade sized and hardcovers!

    We have great customers, over 3000 that exchange, and they’ll bring in primo books, just to keep us in business. Love them! To be honest, we lost a few customers , but they came back, after some stores in the area went out of business because they couldn’t pay their rent. It took us four years, but now we’re making enough money to live on, mostly.

    1 1/2 years ago we went computerized. While we guarantee to take our own books back, the computer will tell us if we need any books that aren’t ours. Great help, since we have can have 20 of some titles, and the inventory changes too fast for us to keep up any more.

    Love the book business! But am concerned about e-readers and what will happen when all our older customers, who like to hold a book in their hand are gone. But that is another story….

  10. Hello everyone! I have recently taken a vow of voluntary poverty and embarked on the bookselling adventure. I am excited to read articles and ideas regarding the industry. I am working on developing some kind of trade in policy, but what I have done so far has allowed me to collect almost a thousand books a month, while helping out my community. What I am doing is simply this:
    I take book donations for which a percentage of the proceeds benefit the local domestic violence/sexual assault center. I have been open for only two months now, but this idea is well received. I mark all donated books by pricing them with prices that end in a certain obscure number, that is never otherwise used. There are other ways to mark the donated books, such as certain colors for the tags, or stickers, (though I abhor stickers on books.) October is domestic violence awareness month, and it will be my three month anniversary, in which I will be writing my first check to the center. The money goes to a branch of the program that benefits children directly or indirectly involved by teaching them coping skills through art. I am so excited to be a sponsor in this program. Average contributions are about a dollar a book, which is a little better than what I would pay, but saves me the trouble of shopping for books. I have had tremendous success with this idea so far.
    When customers come in to inquire whether or not I buy old books, I simply point to my pretty, framed sign with the details, and explain what we do. Most people are so excited that they bring me bags and boxes full on a regular bases. Surprising, out of all the donations, only few are unsellable.
    If they decline to donate them, say, “I am willing to bargain a trade if you see something you are interested in.” This gives me the power to say yay or nay. Of coarse I am the only employee, so it works for now. Often, the customer is overcome with excitement over a particular title and is more than willing to get a box of books off their hands for it.
    I deal mostly with hardbacks, fiction and none, and antique books. Occasionally, customers need the extra cash, and if they decline to donate the books (no guilt trip involved,) I may offer to some cash for their trouble, and a fair price for antique and collectible books. If I am not in a position to buy them, I simple say that I am not currently buying books.
    Lastly, if they are awesome books and I can’t afford what is fair for the customer, I offer consignment. This is only offered to good antique books worth $15 or more, or subjects which I am low on.

    To sum up:
    First: offer a donation/charity program
    Second: offer to let THEM make a deal with you if they see something they are interested in.
    Third: buy the books if they are something you know will sell and the customer seems to just need the money. ($1 or less each.)
    Forth: Offer consignment on more valuable books.

    Hope my ideas help and pay off. I am very new. Thanks for reading!

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