avatarBrian Munger

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WHY SHOULD I PAY A BUSINESS 100% UPFRONT FOR A SERVICE?

​When looking to purchase a service from a local business, you will occasionally come across a payment process that may not be to your liking. Some service-based businesses will require 100% upfront for a new project. As a prospective customer, what do you think of this? Is this policy going to scare you away? Or are you willing to adhere to the policy? If you know very little about this business, and they no have no customer reviews posted online, then this option is very risky. But what if the company was referred by a friend? Or what if the company has over 100 5-star reviews on their Google business listing? Are you more willing to pay 100% upfront? Even if the business has a known reputation for quality, it still may seem sketchy to you to be required to pay upfront.

There are valid arguments for the 100% upfront payment. Consider, for example, a local résumé writing business. One local résumé writing business determined that requiring upfront payment was the most appropriate policy to implement after examining two possible scenarios:

Scenario #1: The client pays 100% upfront, but is not provided a résumé and/or the résumé does not meet the client’s approval. In this case, the client would request a refund from the résumé writer. If by chance the client is denied the refund, the client then has the options of processing a credit card chargeback (which are very simple to do) to get his or her money back. Also, the client can respond to the poor results by writing and posting negative reviews about the business all over the Internet, which can be devastating for any small business. With this in mind, you can rest assured that the writer will do everything he/she possibly can to meet customer expectations and maintain a positive reputation online.

Scenario #2: The writer creates and provides the résumé to the client before accepting any payments. After receiving the résumé, the client suddenly “disappears” and never submits payment. The résumé writer attempts to contact the client to collect payment, but never receives any type of response. In this situation, the writer has no “convenient” method of retrieving the money from the client. One of the few options would be taking it to small claims court, but that would likely be more trouble than it is worth.

Conclusion of the Business Owner: The business owner takes more of a risk than the client if there is no upfront payment required for services. Keep this in mind next time you are shopping for specific services in your area!

Originally published at https://www.blogphenom.com on January 7, 2024.

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Business
Services
Customer Experience
Payments
Business Strategy
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