That's Blackmail

This happened years ago when I was the credit manager at Armor All.?One of our customers was seriously past due.?I placed that customer on credit hold.?A couple of weeks later, I got a call from that customer’s CFO.?

He wanted to talk about the payment needed to clear the past due balance, and he wanted to talk about an order pending.?The first part of that discussion went something like this:

Him:?We’re considering paying the past due balance tomorrow.

Me: That’s good news.

Him:?Before I finalize that decision, I want to talk about the pending order.

Me:?The one we have on credit hold?

Him:?Yes.?Why exactly is it on credit hold?

Me:?Because your account is seriously past due and your accounting manager could not or would not provide a reasonable and realistic payment commitment to us 15 days ago.

Him:?Did you actually talk to her about this payment?

Me:?Yes, I did.

Him:?Did you mention that an order was on credit hold?

Me:?I mentioned in my conversation with her, and in the email that I sent after that conversation that we would have no choice but to hold orders.

Him:?I see.?Well, I assume that the order can be released now.

Me:?No.?Your account is seriously past due and it remains on credit hold.

Him:?Why aren't you releasing that order?

Me:?What I heard you say a couple of minutes ago is that you’re considering paying the past due balance.?I think I said something like that’s good to hear.

Him:?So, if I tell you the check will be mailed tomorrow for sure, will you release the order pending today – yes, or no?

Me:?No.?

Him:?Why not?

Me:?We already have one broken payment commitment from your accounting manager to clear this past due balance.?At this point, I need to wait for that payment to arrive.

Him:?But once the check is in your hands, you’ll release the order.?Right??

Me:?No.?Once the past due balance has been paid, I’ll make a decision about the order pending.

Him:?At this point, I want a commitment, in writing, that once you receive the payment, the order pending will be released immediately.

Me:?No.?I’ll make that decision after we receive your payment.

Him:?That’s not good enough.?You’re not giving me a reason to issue payment.

Me:?The reason you should issue payment is that your account is more than 45 days past due.

Him:?Why won’t you commit to releasing the order pending?

Me:?Why won’t you commit to paying the past due balance without tying the orders pending into that payment??I’m really not comfortable with the direction this conversation is going in.?

I find it problematic that you’re trying to link payment of an invoice that’s over 45 days past due to the release of your orders pending.?It’s coercion and I’m not comfortable with it.?

Him:?I want my orders released.

Me:?I want payment.

We didn’t agree.?Within weeks, that customer filed for bankruptcy protection.?We never did collect the invoice I spoke with the CFO about.

Here’s what I think:?Credit pros should do everything possible not to allow a customer to link release of additional orders to payment to clearing / paying a past due balance.?

I used the word coercion in the conversation.?That’s the polite way of saying blackmail.?I didn’t like the feeling of being blackmailed by that customer.

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