LETTER WRITING:When The Buyer Is At Fault, Writing Credit Letters

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Lesson 24

LETTER WRITING

Writing Letters Refusing Adjustments

When The Buyer Is At Fault

1. Support the Reader's Point of View in Your Buffer Paragraph

Since the customer probably thinks he or she is right, try to make him or her accept the logical solution.

Be sure the customer realizes that you understand the problem and that you will be fair.

2. Assure the Customer That the Request Is Appreciated and Has Received Individual

Consideration.

The requested adjustment is important to the reader in your letter, show that the reader's point of view

is also important to your organization.

3. Present the Explanation before the Decision

Stress what can be done and emphasize your purpose to be fair to all customers. Don't blame and don't

argue. Avoid unfriendly, negative expressions, such as your complaint, your error, you misinterpreted, you neglected,

your claim, you are mistaken, our records show, and your ignorance. With a truthful and tactful presentation, lead the

customer to accept your solution as the only reasonable one.

4. Be Courteous Even When Answering an Angry or a Distorted Claim

If you answer sarcastically, you may lose both your self-respect and your customer. Completely ignore

any insults in the letter you have received; concentrate on writing an answer that is friendly, rational, and

professional. Usually it costs less to keep the customer you have than to find a new one.

5. Try to Leave the Reader in a Pleasant Frame of Mind

A friendly but concise closing is even more important when the adjustment is not granted.

Use the effective buffer paragraph technique when writing bad-news letters:

Step 1:

Buffer

Step 2:

Explanation

Step 3:

Your no (stated or implied)

Step 4:

a friendly close.

You may review the summary of the indirect approach to help you write effective bad-news messages.

The writer of the following letter realizes that Mr. Hassan must be convinced of the organization's

position and be kept as a customer (after all, he did buy an expensive item). Here's the answer to a request

for repair or replacement for his automatic garage door opener.

Dear Mr. Hassan,

You are right to expect high-quality merchandise from The Automatic Door Company, We try to give

you the best for your money and to stand behind our products when they fail as a result of defects in

material and workmanship, as our warranty states.

We appreciate your sending the door opener to us for analysis. It appears that the opener has gotten

wet. Excess moisture over a period of time causes this defect.

Our service manager estimates that cleaning and repairing your door opener would cost Rs. 2500.

Since your door opener is several years old, you may want to consider buying a new one. We have

made many improvements

to our door openers since yours was manufactured, including a sealed circuit board that would prevent

the possibility of damage from moisture. A new door opener, which costs Rs. 3500.00 postpaid, should give

you even longer service than your old one did.

Please let us know whether you want us to repair or replace your opener.

Yours sincerely,

Dear Mr. Shibly,

We are sorry that you are not completely satisfied with your Atlas Vacuum Cleaner. You are entirely

justified in expecting more than four years of reliable use from an Atlas Appliance, and we are always eager

to service any product that does not for some reason live up to standard.

We appreciate your giving us the opportunity to examine the damaged vacuum cleaner. According to our

service department, the filter had never been replaced although the owner's manual advises replacement

every few months. As a result, the motor itself gradually became clogged with dust and dirt.

The cost of repairing and cleaning the vacuum is estimated as Rs. 500. If you would like to have it

repaired, please let us know. With regular cleaning and replacement of the filter and exhaust bag, you should

receive several more years of service from your Atlas appliance.

Yours truly,

When the third Party is at Fault

You have three options:

(1) honor the customer's claim with the standard good-news letter and no additional explanation;

(2) honour the claim but explain that you were not really at fault; or

(3) take no action on the claim and suggest that your customer file against the firm that caused the

defect or damage. Common business sense tells you, however, that the third option is almost

always a bad choice. (The exception is when you're trying to dissociate yourself from any legal

responsibility for the damaged merchandise, especially if it has caused a personal injury, in which

case you would send a bad-news message.)

This letter will be written when neither the company nor the customer is entirely at fault. It must

express an attitude of pleasant cooperation. It should be based on facts and offer a reason for refusing the

requested adjustment. It should immediately make a counteroffer that meets the customer halfway. Of

course, it should leave the decision to accept the adjustment to the customer and suggest a course of action.

You have three options: (1) honor the customer's claim with the standard good-news letter and no

additional explanation; (2) honour the claim but explain that you were not really at fault; or (3) take no

action on the claim and suggest that your customer file against the firm that caused the defect or damage.

Common business sense tells you, however, that the third option is almost always a bad choice. (The

exception is when you're trying to dissociate yourself from any legal responsibility for the damaged

merchandise, especially if it has caused a personal injury, in which case you would send a bad-news

message.)

Of the other two options, the first is more attractive. By honouring the claim without explanation, you

are maintaining your reputation for fair dealing at no cost to yourself; the carrier or manufacturer that

caused the damage in the first place will refund you. Remember that businessman wants to correct

problems to keep the customer's goodwill. Follow these steps when writing a letter compromising on an

adjustment:

Step 1: Buffer

Step 2: Explanation

Step 3: No (stated of implied)

Step 4: Counterproposal or compromise

Step 5: Friendly close.

Writing Credit Letters

Credit: A Promise of future payment in cash OR KIND GIVEN IN EXCHANGE for goods or

service.

Credit is the instrument which enables manufactures producers retailers and consumers to

obtain goods at a time when they can be used or sold even if ready cash is not available.

The major reason customers wish to establish credit is convenience. Customers can:

· Buy now and pay later

· Avoid carrying cash with them or writing checks.

· Exchange and buy on approval more easily.

Writing credit letters:

· Be careful as they r permanent record

· Give protection of in case of legal difficulties

· Credit letter must be courteous, tactful, dignified

Letters concerning credit fall into these basic categories:

. Letters requesting credit.

Letters extending credit

. Letters refusing credit.

Direct Statement of the Request

1. Phrase the opening to reflect the assumption that the reader will respond favourably to

your request.

2. Phrase the opening so clearly and simply that the main idea cannot be misunderstood.

3. Write n a polite, undermanding, personal tone.

4. Preface comples requests with a sentence or two of explanation, possibly a statement of

the problem that the response will solve.

Justification, Explanation, and Details.

1. Itemize parts of a comples request in a numbered series

2. List specific questions.

Don't ask questions that you could answer through your

own effects.

arrange questions logically

Number questions.

Word questinos to avoid clues about the answer you prefer so an not to bias

the reader's answers.

Courteous Close with Request for specific action

Letter Asking Information

Dear Mr. Ahmad:

We are a newly established appliance repair business interested in acquiring a business

credit card. Small shop owners in the area have informed us that business credit cards are a

convenient, organized, and efficient way of handling small day-to-day expenses, such as office

supplies or lunches.

Please send us more information concerning the terms of your business credit cards.

Particularly, we are interested in interest rates, annual fees, the process of obtaining a card,

remittance requirements, and security measures available. Any additional information would

also be appreciated.

Thank you for your time. We look forward to hearing from you.

When the third Party is at Fault

Dear Sir,

we are a newly established appliance repair business and desire to open a credit account

with your company.

For reference as to our ability to meet our financial obligations. We refer you to our banker

whose address is given on the back of the this letter.

if there is any other information you require in order to extend us the privilege of a credit

account with you we shall be glad to have so inform us.

Yours truly

Letter Asking For Credit Information

Credit Information is obtain from different sources; banks, commercial agencies, Financial

statements, etc.

Ladies and Gentlemen:

Subject: Credit Inquiry

The following applicant has given your name as a credit reference:

Mr. Ahmad

Lahore Towers,

Lahore.

We would appreciate your giving us the confidential information requested below:

1. Date the account was opened.

2. Terms of the account

3. Credit limit

4. Current balance

5. Past due amount

6. Date of last activity

7. Payment history

8. Remarks

A postpaid return envelope is enclosed for your convenience. Your help will certainly be

appreciated, and all information will be kept confidential. .

Sincerely

Evaluating the Credit Information

Traditionally, the following three Cs of credit form the basis for extending credit privileges:

1. Character refers to a sense for honesty and ethical dealings with others. It means meeting obligations

and is demonstrated by willingness to pay.

2. Capacity is the ability to pay. It is evidenced by income or potential income.

3. Capital refers to tangible assets in relation to debts. Capital also determines the ability to pay if the

debtor does not pay willingly.

Extending Credit

1. Welcome the new charge customer, and express the wish for a pleasant association.

2. Outline special privileges that are available.

3. Explain the terms of payment.

4. Encourage the customer to use the new charge, account, and enclose promotional material.

5. Build goodwill by indicating your eagerness to serve the new customer well.

Gentlemen,

This customer does not discount our bills, we and is from 60 to 70 days slow, although we have

never experienced any difficulty in obtaining settlement. At present they owe us for our bill of July 15

for Rs. 1400, which is now just past due.

We hope this information will be of some assistant to you in assigning a credit limit to this

account.

Sincerely yours,

Letter Extending Credit

Dear Mr. Hassan

we take pleasure in opening a charge account at bright's, with your name. I feel sure that this

will be the start of a long and mutually pleasant association.

As a charge customer you will enjoy many privileges at bright's. for instances our

charge customers receive advance notices of special sales. They may also use their cards at out terrace

restaurants and book rental department.

By the first of each month you will received and itemized statement of your purchases

made through the 25th day of preceding month. Purchases made after the 20th appear on the following

month bill. Payments are due by the 10th, and a monthly charge of 1.5% will be made on the balance

reaming at that time.

we hope you will make regular use of charge accounts.

sincerely yours

Gentlemen,

We are glad to have your order of December 20th and of the opportunity to add your name to

our list of satisfied customers. We find, however, that we are without sufficient information to permit

out consigning these goods to you on credit. This does not mean that we question our ability to meet

your obligation, but of course we must have assurance that our terms will be met. If you wish, we can

send your order on C.O.D. basis or, if you will send us the names of those with whom you have done

business in the past, and full out the enclosed statement, we can in all probability, ship your order at

once on credit.

Yours very truly,

Refusing Credit

Every credit-refusal letter has two objectives:

1. To say no tactfully

2. To keep the goodwill of the customer

There are various reasons for refusing credit. The main ones are:

1. Lack of established credit.

2. Overextension of credit, which may result in an inability to pay bills on time.

3. Unwillingness to pay that which is owed according to credit reporting agencies.

BUFFER

· Eliminate apologies and negative-sounding words.

· Phrase the buffer to avoid misleading the reader.

· Limit the length of the butter.

· Express appreciation for the credit request.

· Introduce resale information.

· Make a transition from the favourable to the unfavorable message.

· Make transition from the general to the specific.

· Avoid a condescending lecture about how credit is earned.

· Avoid negative words, such as must decline.

· Suggest positive alternatives, such as cash and layaway purchases.

Dear Mr. Hasan

We should very much like to send you the good on your order No. 543 of August 27,

but to certain unavoidable reasons we are not in a position to a credit account at this time of the year.

But you really must have your goods. They are on the top of our packing list. May we

consign them to you on cash or COD basis?

Dear Mr. Ahsan,

Thank you very much for you order of April 7, we are blad to that you are interested in

our product because you will find them a source of profit and building.

Just now however, we are without sufficient information toi permit us to ship this order

on credit term. We feel sure that we can make shipment in this way after you have become more firmly

established in business.

As in the case all those who apply for credit, we have made a careful investigation of

your resources and credit obligations since you have number of Loan commitments may we suggest that

you continue to allow us to send you on a cash basis until such time as you are able to reduce your

personal obligatations.

Your may be sure that we will welcome the opportunity of considering your application again when

circumstances are more favourable towards your receiving additional credit.

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