Taking Payment Up-Front - Legal Question

[particle]

I keep pushing my turnaround time noted on my website further and further out, trying to slow down new orders, but now I'm starting to worry about the legal problems of taking payment up-front. For those of you that require payment up front, do you know what the time-limit is for acceptable delivery times? I'm assuming there is one, and need to know if I need to consider incorporating some way to take deposits up-front instead of full payment.

[Cyberthrasher]

The first thing that comes to my mind is PayPal and the 45 day limit for customers to file a dispute.

Other than that I can't say whether there would be anything else. My inclination is to say that when a customer pays you upfront, they're entering into an agreement, knowing how long it will take for them to receive their items. Now, if you took their payment with a promised completion date 4 weeks out and then changed it to 8 weeks without their consent - that may be grounds for legal action (I'm just guessing here). I tried looking around for hard facts, but couldn't figure out a good search term that didn't give results on loan pre-payment penalties. I think as long as you stick to an agreed upon completion date with the customer, everything should be fine.

[bustedlifter]

I usually get 1/2 up front and the rest on delivery.

[shooter55]

I don't think there is a legal qualification to this. I know of people that have placed orders for things that are over a year out, so I would believe that as long as your customer is aware of the lead time, there should be no issue. The big issue is when you run into problems and the original anticipated time has been pushed out considerably. The best solution for that would be communicate that to the customer as soon as you are aware, and discuss with them if that is acceptable. Communication gets you out of a lot of problems.

I am not an attorney, nor do I play one in any films or TV shows..........but I did stay in a Holiday Inn Express once.

[veedub3]

I am not an attorney, nor do I play one in any films or TV shows..........but I did stay in a Holiday Inn Express once.

Ha,ha,ha,ha,

[dfwde]

If your reason for extended the time is the amount of orders coming in you could raise your prices to slow down the orders coming in.

[dfwde]

You would be getting less orders but not losing money

[mrdabeetle]

There is no legal issue as long as you stick to your posted deadline time. One thing that I have done to keep customers happy, is to notify them when their order is next in line and give them a more accurate estimate on completion/delivery. As you are working from a website, the text describing the transaction, estimated shipping time/cost, etc. are the contract. In some areas, this becomes legally binding as soon as the customer completes the payment process.

If I do not have the item in stock, or it is a custom order, the customer must agree to pay a percentage of the total cost of the item as a non-refundable (to cover cost of production) deposit, upfront. The remainder will be required upon delivery.

[chiefjason]

As a part timer, this is why I don't do a website. And currently, I'm glad I did not. I have quit taking money at this point. I've got a list of folks that want a holster. When I can work on theirs I told them I would contact them for payment. I've got one about ready to ship. Three about ready to dye. I might mold another tomorrow. Next week I might start on the waiting list. Being one guy with a limited amount of time outside of my real job, it does not take much to get me more behind than I want to be.

I'm considering raising the price again to slow things down as well. Busy is a good thing. Hopelessly behind is not. lol

[DHauser]

I always get something up front. If the customer sends me the item that a piece is created for then I normally forgo the deposit or take 50%. If they do not (or do not need to) I always get 100% up front. I always give an estimate of time but also advise that time in custom leatherwork is relative. I do however ALWAYS communicate with the customer via e-mail while the project is in process.

[glockanator]

I always get half up front non refundable, that way if they back out halfway through I don't get burned on the project. Found that out the hard way.

[K-Man]

There is a time limit if you accept credit card payments - based on VISA and Mastercard rules at least. That information should be within the agreement you signed with the credit card processing company.

Edited March 13, 2013 by K-Man

[particle]

Thanks for all the feedback everyone. I only accept PayPal, though I've not read to see if there are similar time limits noted in the agreement. I ended up just closing down my hand made products temporarily so I can focus on clearing out existing orders. I think in the future I'll just accept X amount of orders at the beginning of the month, and close the store once the limit has been reached and then reopen the following month. That seems to be the trend among some holster makers anyway.

[Bronson]

The guy I was buying my holsters from would accept the order, without payment, and when your order was the next in the queue to be made he would send an email with an updated delivery time and instructions for payment. You could either accept the lead time and pay or cancel the order at that time.

Bronson

[particle]

Bronson - that's what I used to do, until I upgraded my website with a shopping cart system. It simplified the accounting side of my business since we didn't have to manually generate invoices for each order we shipped, then wait for payment before we shipped the order (yes, we didn't collect money till the order was actually ready to ship). Then, we started requesting payment before we started building the order. It seemed increasingly we were getting orders for customers that traveled a lot and were oftentimes overseas and would need to wait till they got back to the US to pay. So, we'd have to move on down the list and email additional people to see if they still wanted the order, then invoice them, then wait for payment, etc. - I just want to cut leather, not fiddle around with invoicing and such. Plus, there was (not very often) people that had no intention of actually buying the holster - they just wanted to waste everyone's time. Thus, I rebuilt my site and incorporated a shopping cart. I just waited too long to incorporate an open/closed order system.

[Ran]

As a part timer, this is why I don't do a website. And currently, I'm glad I did not. I have quit taking money at this point. I've got a list of folks that want a holster. When I can work on theirs I told them I would contact them for payment. I've got one about ready to ship. Three about ready to dye. I might mold another tomorrow. Next week I might start on the waiting list. Being one guy with a limited amount of time outside of my real job, it does not take much to get me more behind than I want to be.

I'm considering raising the price again to slow things down as well. Busy is a good thing. Hopelessly behind is not. lol

This is precisely what I do. No website and don't want one. Having said that, however, I don't make holsters and gunbelts to make a living. Its a hobby that pays for itself and funds a new pistol every now and then. Lately, I've been turning more work down than I except....and I'm ALWAYS busy..

Edited March 16, 2013 by Ran