Wedding cancelled? Dress not wanted? Dress not paid for in full? Catherine Rickett, debt recovery manager at top 200 national law firm Roythornes Solicitors and an expert in dealing with non-payment to businesses, has some top tips to avoid unpaid invoices…
When a potential client comes to you to purchase their outfit, they are reserving a dress that, once altered, cannot be sold to another. The wedding dress is arguably the most important piece the bride will purchase, so whilst it needs to be perfect, it also needs to be paid for. Your bride is buying your time, as well as the dress. The gown will no doubt need to be fitted, and if alterations have been made before the dress has been paid for, you could find yourself out of pocket if she doesn’t return to collect it and make the final payment; you need to protect yourself by having terms in your contract.
It should be your priority to set out conditions regarding payment terms, particularly in respect of requesting a deposit with any order. Consider also including a payment plan or interest-free instalments according to the dates leading up the wedding as an additional safeguard. Brides will no doubt be grateful that you are accommodating them by helping them fund the dress of their dreams.
A word of warning in the event of non-payment: as you’re pursuing a consumer rather than a business, and because it’s not a commercial debt, you won’t have the protection of the Late Payment of Commercial Debts (Interest) Act 1998, so it’s advisable to specify terms that allow for interest, compensation and legal costs.
Remember though, you must act fairly when dealing with consumers. A Court is unlikely to find that consumers are legally bound by unfair terms. Likewise, a couple may well get carried away when planning a wedding so it is advisable to have a 14-day cooling-off period from the date the original contract is signed. It may also be a good idea to establish whether the couple has wedding insurance, and if they don’t, suggest that they consider taking out a policy in order to protect themselves (and your business).
So, what should your tiered charges look like in order to be fair?
- Deposits should act as a reservation fee for the services and should therefore be a small percentage of the total price, say, 20%, depending of course on the costs to your business at that time.
- Once alterations are to be made, an additional deposit of perhaps 50% should be requested from the client. Make it clear how many fittings are included in the price, and at what stage each payment is due. Any non-refundable advance payments and charges should reflect the business’ actual net costs or loss of profit resulting directly from non-payment or collection.
- The final payment should become due once the dress is ready for collection.
If a bride changes her mind sufficiently in advance that you can cancel the order with your supplier without any direct loss to your business, it might be seen as the right thing to do to give the customer a full refund of any monies paid less an amount to cover your administration costs to date. Therefore, you should look at each situation individually as all circumstances are different.
Whilst you don’t want to lose out financially, it’s very important not to be seen to be making money from a service or goods that you are no longer supplying – and remember that word of mouth can ruin a reputation.
It may be that your client had to cancel their wedding for reasons of genuine hardship, so trying to extract any owed payment at all may be difficult. If a delay in payment is unavoidable, then it may be prudent to offer the client a payment plan to spread the cost, which will save you from throwing good money after bad.
Whatever the situation you find yourself in, provided the terms and conditions in your contract are fair and reasonable, a legal team can be brought in to help chase payments and provide advice if further steps need to be taken.
For more information visit www.roythornes.co.uk or follow @roythornes on Twitter