Responsibly Turning Away Business

[MakingItNow]

I sell home products that every new home needs. I love it and all of the people I meet. The best part is that I am making money at it!

I've never needed to refuse a sale to anyone with my own business, but I have learned to trust my gut. I receive referrals from new home sales consultants, realtors, home builders, and past customers. I also receive business from my website. My logic is pretty simple with this business. Be honest, genuine, enthusiastic, and ensure that every customer is beyond merely satisfied. I'll go way above and beyond if myself or a supplier causes a delay or issue for any customer.

My sales grand totals range from $1,000 to $8,000, averaging about $2,000. I take a 50% deposit upfront, and seek the remaining balance upon installation. My gross profit margin varies from 35-50%. Usually I'm not on the hook for much money if I ever were to get stiffed the remaining balance. Obviously I'd like to limit the chances that might happen.

Most people I deal with have excellent credit and I'm a good judge of character. However, some home buyers have family sign on their home or have builder financing. My reputation is golden and 100% legitimate, but there are customers every now that make me nervous.

In fact, I have one now. I feel obligated to serve them as it was a referral. They tried really hard to place a credit card deposit, then had to make "arrangements" to get $600.00 on a check. The soon to be homeowner gave me attitude and flack about not accepting cards for the deposit, hinting towards something personal with them. Isn't that crazy? Granted, I didn't broadcast deposit details as most people buying a $250,000+ home usually don't ask for a credit card deposit. If they do, they are usually understanding of cash or check after hearing we don't take cards for deposit. I am pretty sure that they will pick my product apart to deny final payment, stiff me entirely, or give me "the checks in the mail". They just don't have disposable income it appears. I usually don't buy into fear, but I am on this one. I do have a signed quote with disclosure at the bottom about final payment upon installation.

Overview of My Process:
Lead > Quote > Deposit (50% Upfront) > Clear Funds > Order from Supplier > Arrival > Installation > Final Payment (Remaining 50%)

So here are my questions for the future:

1.) If I am given a referral, it's based on trust and relationship. If I refuse the referral I may lose future business from the referrer which is most important to me. What do I do if I'd prefer not to sell to one of the referrer's customers?

2.) Let's say that it's a lead I generated without a referrer. I could always quote really high and express a longer lead time than usual. That could earn me a negative review online or set me up for liability issues. How do I deflect a customer scenario as this?

I'm in the USA, specifically Texas. I'm very liability/lawsuit conscientious. I'm concerned that deflecting certain customers could come back as sexist, racist, homophobic, or something of that nature. Money is money to me and I do not allow personal judgements to reflect business decisions. When the red flags start going up I need to know the responsible way to pass on a perceived deadbeat customer.

[Freelancier]

1. You go back to the referrer and tell them "it wasn't a good fit" and then explain who a better fit would be.

2. I'd do business the same way regardless of whether the business is referred. That way you don't have to remember that you adjusted your process for someone (it's just easier to keep things straight if your process is designed to work for everyone).

[bjay99]

Overview of My Process:
Lead > Quote > Deposit (50% Upfront) > Clear Funds > Order from Supplier > Arrival > Installation > Final Payment (Remaining 50%)


As long as you stick to your process, it is easy to turn away business.

[Harold Mansfield]

There are 2 kinds of personal referrals:
Happy customers who refer their friends and associates. These are generally good because good customers usually tend to have associates who are nice people and good customers.

Then there's the friend, family or associate referrals. These people have no clue. They are either referring you because they genuinely think they are helping...but in most cases have no clue about business or who or what makes a good client.

Or they are doing it because they want you to "take care" of someone..usually meaning some kind of deal. These type of referrals aren't about you. They are about them. These are the ones that bite you in the ass, cost you money and become nightmare clients.

You shouldn't feel obligated to take every job just because someone referred them. If I did business with everyone one of my friends recommended I'd have climbed a bell tower by now.
Friends send you people with no money, or that expect "the hook up".
Friends will come to you when they don't want to pay someone else full price.
Friends will send you people to make themselves look good.
Friends will use your favor to get favors of their own.

Treat everyone the same and trust your gut.

[MakingItNow]

There are 2 kinds of personal referrals:
Then there's the friend, family or associate referrals.
Or they are doing it because they want you to "take care" of someone..These are the ones that bite you in the ass, cost you money and become nightmare clients.
Treat everyone the same and trust your gut.



1. You go back to the referrer and tell them "it wasn't a good fit" and then explain who a better fit would be.
2. I'd do business the same way regardless of whether the business is referred. That way you don't have to remember that you adjusted your process for someone (it's just easier to keep things straight if your process is designed to work for everyone).

Thank you both for your time and input on my post. I do have both types of referrers and you're correct Harold about the "take care" referrals. They are a gamble, but great when they are good people. I will be more direct with them with what I would preferably like in the future. I agree with the logic of consistency among customers as you both mentioned. I'll focus my efforts on that.


As long as you stick to your process, it is easy to turn away business.
Actually it's just the opposite:
Reading from right to left, pick a step, any step. Remove it. You'd see the end result is less than favorable.
Reading from left to right, pick a step, any step. Remove it. You'd see there isn't a step to be had after that. ;)

[huggytree]

what stood out to me is the fact you dont accept credit cards....you dont correct? why?

i didnt for 6 1/2 years either

but now i do and its somewhat popular

some people live paycheck to paycheck, but still pay their bills....they may live their entire life that way, but yet never missing a payment

if you take credit cards its much safer for you too....you dont have to ask for the final payment...have it all setup and just charge it when your done...

referrals are king...i wouldnt do anything to upset that...ive had customers who have given 10 referrals

its your business, you can make any rule you want......but turning down work because you wont accept credit cards may be short sighted

i wish i had accepted them from day 1

[Freelancier]

My sales grand totals range from $1,000 to $8,000, averaging about $2,000. I take a 50% deposit upfront, and seek the remaining balance upon installation. My gross profit margin varies from 35-50%. Usually I'm not on the hook for much money if I ever were to get stiffed the remaining balance. Obviously I'd like to limit the chances that might happen.


what stood out to me is the fact you don't accept credit cards....you dont correct? why?

Cash is king and I understand not wanting to have the possibility of a credit card dispute after you complete installation. Since you're doing physical installation, that means that your customers are relatively local, which means a dispute could be covered by a contract that would give you the ability to go in -- after the court agrees with you -- and take out the installation if they decide to dispute it. If you haven't, you'd need a good contract.

Also, I've seen how easy it is to get a fraudulent money order or to write a check against an out-of-state account that had insufficient funds. The client's final payment is still at risk anyway.

Considering your profit margin on each sale, the potentially small number of disputed installations shouldn't be an issue for cash flow. The relatively small credit card fee (3%) is also not really onerous considering your margins.

I tend to agree: you should consider allowing credit cards to be used for purchase.

[Harold Mansfield]

Cash is king, but not always feasible. I've come to realize that there is really no protection against charge backs, or stopped payment on checks no matter how malicious or dishonest they are. It's just an unfortunate part of doing business.

[shadojake]

I agree that cash is king. When customers ask me if I take cc's, I simply reply that I do. If they ask if I perfer cash or credit/debit, I let them know I prefer cash. The fees are part of the cost of doing business, as it would be in a retail setting. I am not sure if the fees are what you are concerned about.

With checks, there is the concern about insufficient funds, closed account, etc. One could always call the bank with a check and verify there are funds to cover it. Then take it immediately for deposit or cash it.

There has been only one time, so far in about 1.5 years, that I did not want to take a job. It was a design I personally did not like. It was not my style and was tricky to do. The design did not have any questionable phrasing, or anything lewd, or anything like that. The "style" was less traditional that what I usually do. But the customer ended up satisfied the first time around, though I still disliked the design. However, I never let on to the customer how I felt.

There have only been a couple of times I got stiffed for not taking a deposit up front .... the customers never picked up the order once called. One of those times, the lady ordered and then her mom got diagnosed with cancer. (This particular design can easily be sold elsewhere.) Now I have a written policy that I will use for special orders. It requires 50% down and the balance paid on delivery. This will cover any materials. I probably won't implement it with close personal friends. However, I will not hesitate to use it with a stranger or a first time customer.

However you collect payment in the future, I say follow your gut. You have that internal check for a reason, use it.

[MyITGuy]

The soon to be homeowner gave me attitude and flack about not accepting cards for the deposit, hinting towards something personal with them. Isn't that crazy?
Nope, not in my opinion. Just as you prefer Cash to protect your interests, I prefer to only work with vendors who accept Credit Cards to protect mine, this way the credit card company can act as a mediator (Although a bit unbalanced as I am their customer) in the event there is an issue. If you only accept cash, then I'm likely going to move on to the next vendor.

Additionally, you mention that you work with new home buyers, something to keep in mind is that they likely just spent every last dime in their checking account for the security deposit, inspections, unexpected repairs, closing costs and down payment that in today's world would represent 20%+ of the home value...so they may not have any funds left in their checking but have plenty of credit available to them to be used.

Look at Huggy's post and how he feels...I recall we had this discussion at least a year ago.

[Harold Mansfield]

Personally, I hardly ever have cash on me anymore. I can go months without ever having touched paper money.

When I was in the service industry and made most of my money in cash, that's all I dealt with. No cards. New TV? Cash? New car? Cash. Rent/Mortgage? Cash.

Back then I couldn't understand people who never had cash on them. Especially in Vegas. Cash City.
When I became a limo driver I started understanding that there are some people who use cards purposely to track expenses and turn in expense reports.
I had never been one of those people, so I didn't get it.

Now I'm one of those people, who deals with other business people who do the same, so I expect that everyone takes cards.

[MakingItNow]

Or they are doing it because they want you to "take care" of someone..usually meaning some kind of deal. These type of referrals aren't about you. They are about them. These are the ones that bite you in the ass, cost you money and become nightmare clients.
So very true! There are plenty of companies & people that refer me now without compensation. They know I'm competitive on pricing, but more importantly they have no hesitation in doing so because they know the customer is in good hands.


When the red flags start going up I need to know the responsible way to pass on a perceived deadbeat customer.
Hit the price higher than the competition by 20%. Then ask if they have already got a quote from "so & so" as well. Then tell them you'll match their price the best you can.


what stood out to me is the fact you dont accept credit cards....you dont correct? why?
Because I was blind. I do now :p

This useful thread actually helped shape my year last year. Thanks!