[...] when the Linden-based company got stung a few times by deadbeat customers, owner Allen Rubel thought it was time to look into credit insurance, a kind of backstop that will pay off his invoices if his customers go belly up or otherwise default on their obligation. Rubel is taking a hard look at credit insurance policies offered by Hub International Northeast Limited, a Chicago -based insurance brokerage with an office in Berkeley Heights.
Finance Looking for ways to stimulate sales in a dry economy Companies consider credit insurance, customer rewards programs which may be asked to custom-order some goods, can mitigate risk by not extending cred- BY MARTIN C. DAKS it to someone that appears on our list.” Timing is everything Corporate Strategy PIC Corp., a chemical manufacturer and dis- Conversely, he said, companies that offer IN OCTOBER, just as the economy was tributor, is in the business of killing bugs. But less expensive than factoring, an arrangement debt-relief services might use the database to beginning to unravel, Wayne-based Toys when the Linden-based company got stung a where a company sells its receivables, usually at target individuals that are having credit and “R” Us Inc. launched Rewards “R” Us, the few times by deadbeat customers, owner Allen a hefty discount, to a third-party collector. cash-flow problems. business’s first loyalty membership pro- Rubel thought it was time to look into credit “A lot of companies don’t know about cred- With consumers constraining their gram. Customers can accumulate points insurance, a kind of backstop that will pay off it insurance, or think it’s too expensive,” said spending, companies are also doing their best redeemable as rewards dollars, and are his invoices if his customers go belly up or oth- Michael Zeldes, a senior vice president at Hub’s to hang on to established customers. One way eligible for exclusive one-time offers and erwise default on their obligation. New York office. “In the last month or so, we’ve to do that is with customer loyalty initiatives, other deals and promotions, said Greg As businesses wrestle with the worst seen an upsurge in the number of companies like the rewards program mounted by A.C. Ahearn, senior vice president of market- economy since the Great Depression, more are looking into and applying for coverage.” Moore Arts & Crafts Inc. ing and e-commerce. looking at ways to stimulate their sales, or at Some businesses, like Red Bank direct “People who enroll in the no-fee A.C. “Plans to put the Rewards ‘R’ Us pro- least limit their losses, industry insiders say. marketing services firm V12 Group, act as a dis- Moore Rewards program earn one point for gram in place began long before the pro- “We deal with a lot of retailers,” said tant early-warning system on behalf of clients. every dollar they spend, and can get double gram’s launch last fall, and it was not a reac- Rubel, who took over the 56-year-old business “Our Financially Distressed Data Suite points when they spend $100 in a single trans- tion to current economic conditions,” he from his father-in-law. “In this economy, you rates millions of people based on their person- action,” said Scott Ridgely, director of loyalty said in a statement. But “we’ve been very just don’t know who’s going to be around long al leading economic indicators, including programs at the Berlin-based crafts company. pleased with the number of Toys ‘R’Us and enough to pay their invoice.” whether they’re 90 days or more late on credit- “They receive a $10 reward certificate when Babies ‘R’ Us customers who have signed Rubel is taking a hard look at credit insur- card payments, whether they’re overextended they reach 200 points.” up for the program.” ◆ ance policies offered by Hub International on their mortgage and other metrics,” said Jeff The program — which Ridgely said was the — Martin C. Daks Northeast Limited, a Chicago-based insurance Berke, the company’s executive vice president company’s first — was originally introduced on brokerage with an office in Berkeley Heights. of sales and marketing. “Businesses can run a test basis in a few stores in September. Based For a fee that varies with the creditworthi- our suite against their own marketing database on the results, management plans to roll it out to happened that we implemented it when the ness of his clients, Rubel can be assured of being and decide which individuals should be all 133 A.C. Moore stores in early June. economy started to decline. But either way, it paid regardless of what happens to his cus- dropped because they’re not likely to be a “We were looking into this rewards pro- was great timing.” ◆ tomer. He says credit insurance appears to be creditworthy customer. So, a furniture retailer, gram for a long time,” Ridgely said. “It just so E-mail to email@example.com Employers must navigate legal Steven J. Dundas Protect the company ‘minefield’ to institute furloughs while cutting costs ■ Before slicing staff, search for other ways to cut costs. Companies’ careless cuts can lead to a date in court, experts say ■ Talk to a labor and employment
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