Dealing with Customers that Late Pay…or Don’t Pay at All!

Have you ever been stiffed for payment by a customer? 

My name is Mark Wayman, and for the last 15 years I have owned an Executive Recruiting company focused on casino/gaming and high tech. Over 1,000 placements; $100,000 to $1,000,000, with an average of $200,000+ base salary.  

Several disclaimers. First, we don’t have to agree on every topic. That’s what I love about America, we can agree to disagree and still be friends! Second, I am not here to judge – that’s God’s job. I’m not here to criticize, because I’m certainly no Saint. Third, you are welcome to post your questions on this article; however please keep it upbeat and positive. Finally, I only work with executives I know personally or are referred by my professional network. Have quite a few personal friends in my stable, so I’m not able to accept unsolicited resumes. No disrespect intended! 

Today’s topic is customers that “late pay”…or don’t pay at all. One of the toughest aspects of being a small business is when you sell a product or service and get stretched out on payment. It’s even tougher when the customer refuses to pay the bill at all. I’m going to be intentionally vague with my examples since the intent is not to call people out, but rather to highlight bad behavior. I am not condemning the company or the people; just the behavior. 

The Deadbeat Customer – This might be the most disappointing experience of my professional career. One particular casino company sent me down multiple rabbit holes. About once every ten years they would actually hire one of my candidates. It became increasingly challenging to fade all the time investment and never get paid. The first sign of trouble was when they interviewed one of my candidates and stated, “He is outside the 12 month window, so if we hire him, we are not going to pay you.” Technically accurate, however in my 15 year history no customer has ever pulled that one. It put me on notice that I was a VENDOR and not a VALUED BUSINESS PARTNER. Finally, after working 200 hours on two big searches that went nowhere, I terminated them as a client. Sent what I considered to be a courteous and professional email stating that although I valued our relationship, I just had far too much business to keep investing time. No disrespect intended. A month later they hired one of my candidates, and not only did they NOT pay me, they would not even return my messages. Would I like to be paid what I’m owed? Of course! Anyone that tells you money doesn’t matter…doesn’t have any. Far more disappointing, though, is that I thought we were friends. I sent business to their casinos. I personally flew across the United States to say “thank you” in person when I had a placement. Wow. There are enough good customers that you don’t need to deal with people that treat you poorly. 

The Late Payer – A certain casino company on the Las Vegas Strip is notorious for stretching out payments to suppliers. Not a crisis for me, however if you are selling slot machines and get late paid they are basically using you as a bank. All the vendors know them; most avoid them like Chernobyl. My first experience with the company was in the 90s when I sold them personal computers. The terms were “net 30 minus 3” – meaning if they paid in 30 days or less they take a 3% discount. They paid 60 days late and took the 3% discount anyway. Recently I did an executive search for them and they paid me in three installments. The first two payments were late…again. There is enough good business that you don’t have to deal with organizations that treat you like a vendor. 

The Short Payer – A slightly different take on the Late Payer is the Short Payer. Placed a Casino President, and when payment arrives, they are $20,000 short. Another company notorious for screwing their suppliers. Called the client to inquire why the check was light and he starts screaming, “That was our deal!” Actually, it was not, and I had a signed contract to prove it. Apologized profusely and told him I obvious did not remember the terms. Then I placed five VPs with the Casino President and made far more than $20,000. Companies performing RFPs and looking for deep discounts are not good business. 

Be Wary of Guys that Love to Litigate – Years ago I placed a Casino GM at a property that was six months from opening. Three months of interviews working with two corporate level contacts and two property level contacts – four separate contacts. When I sent the invoice for payment, some HR person I never heard of says, “We already had his resume on file and we are not going to pay you.” Huh? I submitted weekly written updates to my four client contacts for three months. When I asked the candidate to back me up, he refused to get involved. Why? Because he was desperate for employment and does not give a fat rat’s ass about me getting paid. You are laughing; however he was far from the first person to lie about having already submitted a resume. So now comes the question:  Do I sue the customer for my $65,000 payment? I have the paper trail and a pretty good court case. My decision was to walk away. I have never litigated anyone and no one has ever litigated me. Interestingly enough, years later someone told me, “Good thing you did not sue!” Apparently their CEO is world famous for stiffing people on their bills, then dragging them through the court system. He has a staff of lawyers with nothing better to do. The GM lasted six months and was terminated. They kept him just long enough to get the property open and find a replacement making half his salary. That GM never worked in the casino industry again. There are times when litigation makes sense, however I would rather walk away and never do business with the company again. 

The CEO Search – Here is another flavor of non-payment that is specific to Executive Recruiting. A client engaged me for a contingency CEO search. Contingency meaning I only get paid if the customer hires my candidate. Long story short, I work on this CEO search for eight months and had four excellent candidates interviewing. I got this! One day the phone rings and I’m thinking the customer is calling to tell me which of the four candidates he is hiring. Nope! They decided to use an internal resource. When I asked for a small payment to cover the eight months I invested in the search, they declined. Going forward, they were a huge failure. All business…is NOT good business. 

So now that we have outlined a few amusing tales of woe, how to deal with these situations…and people? Sure, we could litigate. In most cases I had the audit trail to prove in court they owed me the money; however here are a few of my alternative suggestions. 

• Make Sure the Paperwork is Complete – After 15 years in this business, I know the typical hold up on late payments: Paper work. Lord, give me $100 for every customer that asked for a W9 AFTER payment was due. These days I ensure all vendor paper work is complete up front, then double check with A/P and/or Purchasing to ensure they have everything required for timely payment. 
• Call the CEO – My terms are “net 30” meaning I bill on the candidate start date and payment is due 30 days later. If payment is not received in a timely manner, on day 31 I email the CEO in a kind and courteous manner and say, “The check is probably on someone’s desk. Could you help a good Brother out?” Works every time. It’s highly embarrassing to the CEO when A/P or Purchasing late pays a valued business partner. 
• Not All Business is Good Business – My space is gaming, and although I have 100+ casino clients, I don’t do work for several of the major players. Why? Because not all business is good business. Some are infamous for horrible cultures. We call it “hostile pay.” Others pay below market compensation. I am a card carrying Member of Costco, but this is not Costco; it’s Nordstroms. My “A” players don’t work for “B” wages. But being honest, mostly because life is too short to deal with knuckleheads. Remember, 10% of the customers are 90% of the drama. Choose your customers wisely. 
• You Can Wait Them Out – My experience is that when executives treat people poorly, eventually they get terminated. Almost 100% of the time. Been in Las Vegas 25 years and I can wait them out. When new, more competent management arrives, I come back in from the sidelines. I’m like the power company. If you pay your bill I’ll turn the power back on. 
• Never Get Sideways With a Recruiter – Some might call this “recruiter revenge”; however I simply consider it a way to balance the books. When a software company stiffed me on payment many years ago, I recruited away four of their top Software Developers. Ouch! That hurts. If a company is my customer, I don’t poach their executives. On the other hand, if a company does not pay their bill, all bets are off. You might think you are very clever, but good luck back-filling those jobs in this competitive environment. 
• Everything Happens for a Reason – Either you believe in God, or you don’t. If you believe in God, then you believe everything happens for a reason. There is a master plan and all things work together for the good. Not hear to preach, however for us Believers…everything happens for a reason. Over the years I lost out on a couple of CEO searches. At the time I was frustrated to lose the gig, however I later learned those companies never hired a CEO, and the Recruiter did NOT get paid. Ohhh…now I get it! 
• They Will Get What’s Comin’ to ‘Em! – When it comes to revenge, my Dad gave me the best advice ever, “They will get what’s comin’ to ‘em Son. No need for you to help.”  Or as the Bible elegantly states, “Vengeance is mine says the Lord; and I will repay.” Some people refer to that as Karma. 

Do It Anyway! – I want to leave you with my favorite quote. It’s from Mother Teresa, and it reminds us, “It is between you and God. It was never between you and them anyway.” 

People are often unreasonable and self-centered. Forgive them anyway.

If you are kind, people may accuse you of ulterior motives. Be kind anyway.

If you are honest, people may cheat you. Be honest anyway.

If you find happiness, people may be jealous. Be happy anyway.

The good you do today may be forgotten tomorrow. Do good anyway.

Give the world the best you have and it may never be enough. Give your best anyway.

For you see, in the end, it is between you and God.

It was never between you and them anyway.

Mother Teresa