Increasing sales during a recession is no easy task.  Federal Express started in a recession, so it is more than possible.  The key is being able to provide your existing customers, as well as new, potential customers with the credit their business or household will require to purchase your goods and services.  Sears was a master at giving everyone credit, using small monthly payments, while expanding credit limits, thereby increasing sales.

Store credit is not uncommon, and becomes an absolute necessity during recession.  Oh, you say what recession.  Times are great!  The Dow Jones recovered almost all its loss of last week in the biggest one day session since the 2008 meltdown.

I say, the recession has already started.  Prepare for the worst.


The first step in a credit process is to determine who gets credit.  If you elect that they have a pulse, so they get credit, your sales will go  off the chart.  If you adopt a more stringent standard, like cash only, then your sales will reflect accordingly.  Cash sales require no credit management.  You sell, you get paid.  Transaction over.  If you choose somewhat less of that standard, then a credit policy will be essential.  In order to make those kinds of determinations, information will be necessary.  THE CREDIT APPLICATION.  This form allows the credit grantor to learn vital information about the credit recipient.  Name.  Address.  Phone.  Email. Work.  You can ask anything you want.  If they don’t like the question, they do not have to be your customer.  You are not only selling your good or services, but now a second transaction occurs.  Finance.  You have elected to be the bank.


Think about a bank credit application.  Think abut the questions you answered in order to get an American Express Card.  Think about the personal guarantee that is always demanded.  This is how a bank acts.  Follow the leaders.  Do as the bank does.  Make your credit decisions, and credit management a separate part of your business.  Like Sears, the credit was a separate part.  Make sure your customers understand your terms.  Give them notice of interest on unpaid balances, late fees, the amount of interest you will charge.  The minimum payment allowed.  Spell it all out at the outset.  And, be sure to advise what is going to happen when they don’t pay.  The fees that will be assessed, legal, collection, court, any and all necessary to collect the debt, as well as reporting to credit bureau.


Not only the first statement, but each and every month that the account is open.  Assess interest.  Let the customer know.  Reward good behavior for making timely payments.  The accounts receivable is your sales.  You get it over an extended period, rather than all at once.  Your A/R has always been an asset, but now, instead of becoming a source of heartache, those who didn’t pay, it becomes a cash flow that you rely upon to continue to grow during recession.  Remember, the first companies t be effected by a downturn are our banks.  Remember Too Big To Fail?  Well, credit tightens during recession.  Your customers will feel this pinch, and have to cut back.  What alternative do they have.  You!  You become the alternative to bank credit.

Store credit managed in the way we advise, will be as good s cash.  Better!  More sales means more money.

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