Is Your Customer Holding A Retirement Sale?

Retirement Sale

From the Front Line:
Is Your Customer Holding A Retirement Sale?

We all dream of retirement.  What are your dreams?  Spending time with grandchildren?  Wintering in a warm climate?  Golf whenever you want?  Maybe you envision palm trees and a beach.  I envision skiing every day of the ski season!

Retirement is a good thing.  When a business has a retirement sale, you might think about a seasoned business person having one last sale to close their store, pay their creditors and head off into the sunset.  So what’s wrong with a retirement sale?

All too often we have found that around the end of the year “retirement sale” is a euphemism for “liquidating“.  In the former, creditors think they will get paid and in the latter, they rarely get paid.  Some soon to be retired businesses actually increase their holiday and year-end buys knowing they don’t intend to do anything other than liquidating after Christmas.

What’s a credit manager to do?  Be on alert, know your high-risk customers, and use the tools and information you have at your disposal:

  • Look for customers with marginal credit that are making significant buys for the holiday season.
  • Talk to your sales force.  Countless times I have had sales people tell me they know about customers who are having “retirement” sales, but they fail to relay that information to the credit department.  Your sales force often provides your first warning that there is a problem.  Ask them what they are seeing out in the field.
  • Actively monitor credit holds and customers wanting credit increases.
  • Look for warning signs when calling customers, do they have voicemails announcing a year-end retirement sale or liquidation sale?
  • Is your customer non-responsive?  They often don’t want to talk to any creditors.
  • Use the web!  Google your customer’s name to find out what they are doing.  Look for announcements of retirement and liquidation sales.

Protect your company’s exposure on the front end.  If you have marginal accounts, cash is best.  If you have already extended credit terms, then do everything you can to make contact and arrange for payment on a specific date.  If you are nervous that the customer isn’t going to cooperate with you, then we are happy to help you. 

I am sure you have great customers that occasionally hold a retirement sale.  We wish them the best and for everyone else, keep your guard up and be cautious!

Kelly Cronan is the Vice President of Receivables Control Corp.  Kelly can be reached at 763 315 9660, and his email is