Warranty support for clients that still owe?

[HiTechSolutions]

Is it ethical to limit my free support for customers that still have an opening balance?

For example, this customer bought a POS system but he only paid half so far about a Month ago. Now it's month end, and it get's infected with a virus. He calls me that the system is very slow and he cannot function. Is there anything wrong if I ask for a payment after providing support, while he still owes me?

What would you do?

 

[Mainstay]

"I can have our tech onsite this afternoon, but while I have you on the phone, let's clear up this outstanding balance on the account first."

I presume you have NET terms. If he is inside those terms, give additional support.

If he is outside those terms, collect!

 

[Metanis]

Too much unknown to make a determination.

 

[purdybread]

Depends a lot on the client. New customer or regular with a payment history?

Also what was the original agreement re payment?

More info needed

 

[Mainstay]

Too much unknown to make a determination.

This is true for every single statement ever made on every forum that asks "what should I do?".

So we spitball answers from our own interpretations from the [usually incomplete] information provided.

 

[thecomputerguy]

I mean ... if you included free support in the terms then you provide free support ... but if a customer goes and infects a product I provided to them I'd basically say ... 1.) There is no amount of protection or anti-virus that provides a full-proof solution other than using safe browsing habits, and common sense. 2.) Because the product is so new we are willing to repair the computer this time, and only this time at a discounted rate.

Then maybe give them 50% or whatever you decide off.

 

[Krynn72]

I think you should collect. I can't imagine any situation where a tech offers legitimately "free" support for anything. I would assume the terms are "free support with installed systems." That would imply that they'd need to pay for the installed system.

If there's any question to this at all, then I think you need to revisit the wording of your agreements.

 

[Metanis]

This is true for every single statement ever made on every forum that asks "what should I do?".

So we spitball answers from our own interpretations from the [usually incomplete] information provided.

Your comment is certainly true of technical questions. However, the OP didn't give us enough info about the legal status of the transaction and/or his ongoing contractual obligations. Certainly not enough info to "shoot from the hip". For example, the first question I had is "who owns the system?" And you can't know the answer to that without any insight into the original transaction.

Answering the legal questions will very likely lead to some clarity as to the OP's obligations and range of possible responses.

 

[sapphirescales]

Heck no. A month and he still hasn't paid? I'd dump that client like radioactive waste. But frankly it's your own fault for extending credit. We're not a credit card company. If I'm installing a system for a client, payment is due in full up front before I even show up. If it's a repair we bill at the time of pickup/delivery.

I assume you had them pay 1/2 up front and 1/2 upon delivery. Well if they haven't paid in full yet then it doesn't belong to them and it has no support. At this point if they try to avoid paying the full balance, I'd threaten to take the computer away and charge them for your time and labor and they can find someone else to get a POS system from.

I don't have time for this kind of BS. I don't want to spend 1/2 my time chasing invoices when I could be making money instead. We ALWAYS take 100% payment up front and very few people have a problem with it. You don't give away your products/services and then ask to get paid. That's just asking for trouble.

 

[NETWizz]

The two are mutually exclusive. That is right now that it is actionable for you to collect on a debt owed, and it always will be regardless of if you collect support.

If your contract requires you provide free support, you are still required to uphold your end of the contract unless you can show breach of contract in that the amount not paid is for ongoing support, and the contract is clear that not paying gets you out of providing support.

Simply put two wrongs do not make a right. All they do is make actionable, counter-damages where your client can now come after you.


Ask the customer for payment and provide support. If the customer does not pay send it to collections and/or your attorney.

 

[ohio_grad_06]

To me, and I may be wrong, But wouldn't the client have technically broken the contract first by not paying the bill? Just saying. Many times I'll do a job and say half down and then the other part due upon reciept. I personally wouldn't feel an obligation to fix it until it's paid. The other thing I don't do however is do free support. Maybe every once in a great while out of the goodness of my heart or to get troublesome clients off my back. But I think I'd tell them "My records show you still have an unpaid balance of XYZ, we'll be happy to fix this asap as soon as we receive the past due payment" Then I would want to try to collect payment for the actual fix at the time it was fixed. I don't do net 30 or anything like that. It's due at the time of service. There's one client I let get by with that because he helped us when we were starting out and he's always paid his bill.

I don't think you can threaten to take the system, and you'd probably want an attorney to look over it, but in my mind, they've not paid for the product. So my thought would be sure, when it's paid for, I'll provide service on it. But I would consider not doing free support unless they are on a contract with you. How they infected a point of sale system, not sure.

 

[NETWizz]

Courts don't look at it that way. They don't look at it as one party broke the contract, so the other party doesn't have to do other party's duty.

They look at both sides having their own, exclusive contractual duties that STILL must be performed even if the other side is negligent. The courts look at it as the only recourse is for someone to arbitrate, mediate, or litigate a dispute.

What I am saying is if you do not perform (even though they did not pay), what will likely happen is you will argue they are in default, meanwhile they get some attorney who argues that it is a completely separate and independent issue that you did not provide services as agreed, which is your duty regardless of his clients duties... and that it just so happens his clients damages are: loss of business, employee wages, etc. and that the dollar amount his client suffered is greater than you (emphasis added). Duty, Breach, Causation, Damage...

Meanwhile the judge finds you were not paid and simply deducts this amount from what you now owe the client, and you walk out with a judgement against you and also inductive relief for the client forcing you to fulfill the terms of your contract without pay!

***************

Trust me... If you have a contract, consult your attorney to ensure you have the lawful right to not provide services. I would suspect your contract needs to be written to indicate services will not be rendered if client is delinquent and misses a payment.

Either way, only your attorney can answer this. I am simply advising caution and letting you know the worst case scenario

 

[ohio_grad_06]

Ahah. In essence, from now on, bill the client for the full amount up front. No payment, no delivery, period. Then no free service, they infect the machine, they can pay for a tech to come out. Seems that would avoid a lot of what Netwizz said.

I definitely can see what he's saying. So yeah think I'll look into the idea that, from now on, when I sell a machine or equipment, payment up front or no delivery, that way I'd be paid for the machine. Then if there's no contract, they can be billed for services at the time needed. Or if you want to do free service as part of a warranty, maybe talk to the attorney to properly word it that way.

 

[jzukerman]

I can't provide any additional advice that hasn't been said about your particular query, but I will say this: this year I've started requiring full deposit on all hardware & software for my clients. This has eliminated a lot of issues with invoicing clients. Labor is billed at the end of the project (unless it is a large project then I request 50% upfront or 33% upfront, 33% in the middle, 34% at end of project). Haven't had an issue yet with clients balking at that.

 

[MichaelBits]

Your free support includes software/OS? You may want to reconsider that.

We warranty what we sell, and support it, but we do not include the OS/software in coverage. If they get it infected the next day, they still pay to get it removed. We may give a discount, but with a firm, "If it happens again, full price."

Guess it's kind of unclear what you mean by free support... I hope you don't give free unlimited support to anyone that buys a PC from you... that sounds like a nightmare waiting to happen.

 

[TurricanII]

We agree with the client (in our contract terms) that failure to pay per the schedule/invoice terms will result in a 15 day notice of suspension to them, after which the service will be withheld until the balance is cleared. Other terms include that non-payment is agreed to be breach of contract (as is our non-performance of the agreed services of course!).

Then just send a templated polite but firm 15 day notice to non payers.

 

[Eagle21]

Too much unknown to make a determination.

I'm surprised the OP has not followed up and provided additional information.
I guess he has lost interest in his own thread.

 

[HiTechSolutions]

Let me clarify. This customer was recommended by another happy client...and has already paid a down payment of 50% since last year around October (So imagine 5 Months I was stuck with it). Until recently about a Month ago they decided to have the POS delivered and installed. (They had financial Problems) So I had this in storage for quite a while...So we agreed to split the remaining balance which they still owe into 3 Payments. So today when I pass by to provide support they indeed paid after I asked them if they can... and the final remaining balance will be paid at the end of next month....So everything is going smoothly so far.

I just needed to know it was good business ethics by asking the client to pay during the visit....

 

[Drod]

Good to know everything is working out for you.