Collections by Coupon

Encouraging rapid payment and repeat business by stuffing a discount coupon in with invoices.

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JANUARY 1991

Soil Shield International has cleaned up its collections by stuffing a discount coupon in with invoices. If customers pay the invoice within 15 days, they'll get 5% off the next purchase of the company's fabric protector. "If a furniture retailer normally buys $1,500 worth, he sees a coupon worth $75 and says, Wow," says Mike Connolly, president of the $13-million-a-year company based in Fremont, Calif. "Because it looks like cash, it's more attractive than an offer in a letter."

In the four months after the first coupons were offered, the program helped slash average outstanding accounts receivable from 50 to 40 days. What's more, the coupon has encouraged future sales.

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