Letter for changing from a credit to a cash plan by docbase


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									Letter for changing from a credit to a cash plan
Sample letter Mrs. John Troy,
14 Ocean Ave., Portland, Me. Dear Madam: When this store was opened ten years ago, we believed that our service would be the most effective if we operated on a credit basis. Therefore we solicited charge accounts, of course taking extreme care that only people of known integrity and substance should be on our books. We have had the privilege of serving you through such an account. There are two fundamental methods of conducting a retail business. The one is on the cash and the other is on the credit plan. In the cash plan all goods are either paid for at the time of purchase or at the time of delivery. In the credit plan, those who have not credit or do not care to use credit pay cash; those who have credit rating charge their purchases and bills are rendered monthly. Credit was not extended by the store as a favor; it formed part of a way of doing business. The favor is on the part of the customer. The charge system has many advantages, principally in the way of permitting the store to know its customers better than it could otherwise. The disadvantage of the credit basis is the expense of bookkeeping which, of course, has to be added into the price of the goods sold. Our losses through unpaid bills have been negligible. Our customers are honest. But it has seemed unfair that the customer who pays cash should have to bear the cost of the credit accounts. As our business has worked out more than fifty per cent. of our whole trade is on the cash basis. After careful consideration we have finally decided to go entirely upon a cash footing in order that we may further reduce our costs of doing business and hence our prices to you. We think that in such fashion we can better serve you. Therefore, on July 1st, which marks the end of our fiscal year, we shall go upon an exclusively cash basis and no longer maintain charge accounts. We think that you will agree when you see the savings reflected in lower prices for the highest grade of goods that the change in policy is a wise one and that you will continue to favor us with your patronage. Very truly yours, Pelletier & Co., (Handwritten) C. Brown, Credit Manager.

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