National Clothesline

Cash flow is the movement of money in and out of a business. (Chambers Twentieth Century Dictionary).

I have provided the definition of cash flow because of the following question.

“My employees occasionally deduct money from invoices at the time of pick up. How can I control this situation?”

I inquired as to why these adjustments were made, and was told that the reasons varied. “Sometimes it was late delivery of the clothing, incorrect pricing, and once in a while, it was a coupon.”

This was a case of cash flow going out of a business.

None of these occurrences is unusual. If you have been in business for any length of time, you have been confronted with these issues or issues similar to these. Unless you are at your counter from opening until closing, without going to the restroom, or having lunch away from the store, your employees must have some authority to make adjustments.

What is frightening to the person who made the inquiry is whether the cash is going into the employee’s pocket, or there is an actual adjustment for the customer’s benefit.

Recently I walked up to the cash register at a plant that I visited and under a computer keyboard was a stash of coupons. The owner was flabbergasted. His first thought was the counter staff was providing discounts to their favorite customers. I suggested that they might be adjusting the invoice at the time of pick up when the customer paid with cash.

I faced these issues when I owned my own business and thus developed a little form that provided some security.

This form required a customer’s signature and the counter manager’s signature.

After filling out the form, the employee attached it to the adjusted invoice.

At the end of the day, the adjusted invoices were submitted to the office. It was then up to me, or one of my office staff, as to whether the customer was called to verify an adjustment was actually made.

Now that I had documentation, it made adjustments easier to track. If CSR #1 was always giving adjustments on cash sales to customers, those customers were called to verify the legitimacy of the transaction. If Customer A was always getting adjustments, those transactions could be looked at closely.

Due to my company policy of Never Say No, I accepted coupons at the time of pick up. I know many companies do not have that policy; however, I wanted all my customers happy.

This form worked very well for the counter staff and the customers. It all goes back to a variation of the statement, “if you cannot measure it, you cannot manage it.”

Another suggestion I made was to install a video system to monitor what was going on at the counter. I had one camera aimed directly at the cash register. Because of that camera’s location, I saw an employee pocketing cash.

On another occasion, an employee was caught on tape going through another employee’s purse. With the use of the internet, you can sit at home or in your office and check what is going on in your plant or stores.

You cannot have too much security in your place of business. Leave your lights on in the counter sales area. This will serve a two-fold purpose. Your sales area will act like a sign, and somebody might think twice about breaking into a well-lit business. Of course, people who break into businesses are not the brightest bulbs in the chandelier.

My father’s plant was located down the street from the sheriff’s office. Along the bottom of his building, around the counter sales area, were louvered windows. The burglar removed some of the louvers and crawled into the sales area. The area was dark because they never left the lights on.

After taking the clothing he liked, the burglar crawled back through the louvered opening.

The next morning when the business was opened and the burglary discovered, a jacket was found lying on the counter with a wallet containing the owner’s identification. The owner of the jacket was released by the sheriff the prior evening.

You now know why such a high percentage of criminals return to prison.

Handling claims

The next inquiry that I received this month had to do with customer claims and how to handle them.

In my mind, we can look at claims falling into two categories. The first category is the missing or lost garment. The second category is the damaged garment.

Those two categories can be broken down into two or three additional categories. When there is a claim of a missing or lost garment, is there a record of having received the garment? If there is no record, is the customer telling you that it cannot be found at home?

In the case of garment damage, things get a little more complicated. Did the customer cause the damage? Did the manufacturer create the problem? Did somebody in your place of business cause the damage?

When any of these issues came up a Garment Inquiry form was used. The customer’s name and all garment information was written down. The most important part was asking the customer what the exact complaint was, where and when the garment was purchased, and what the cost was.

It is amazing to me how much a garment’s value increased when it could not be located or it was damaged. This form was used for any type of claim or potential claim situation.

How often have you heard the following?

“Those spots weren’t there when I brought it in!”

“My garment has shrunk two sizes.”

“The color of my garment has changed.”

“The hole or tear was not there when I dropped it off.”

Those kinds of remarks are what make the drycleaning industry so challenging. How you handle the customers with those kinds of problems is the key to maintaining your relationship with your customer and keeping the client happy.

In the event that we did the damage, it was a simple matter of paying the customer with cash and credit. Generally, I used the Fair Claims Guide from DLI to resolve the depreciated value of the item. The credit I issued was to insure that the customer returned.

If I was not certain whether the damage was consumer, drycleaner, or manufacturer related, the DLI laboratory supplied the answer. If I was certain it was a manufacturing problem, I returned the garment to the retailer.

My advice to anybody in business is you should become the customer’s advocate.

Please write this statement into your company policy book. Never, ever, send a customer to a retail store to return the garment! I cannot begin to tell you the amount of money that was saved by my going to the retailer with the customer’s garment, and talking to the manager of the store or department.

This is especially true when the customer does not have the receipt and claims an extraordinary value for the garment.

The bottom line for handling claims or making adjustments at the time of pickup remains the same. Keep your customer, and make the customer happy. The cost of getting new customers far outweighs the cost of the goodwill that you will generate when you resolve a complaint or claim. Make your customers your raving fans.