When you hear the word installment, what comes to your mind? Car or automobile installment? Perhaps it was the motor vehicle or any 11-month installment payment agreement that you have got into in the past. Are you bound to a sales installment contract right now? Whether you are in debt or not, it is undeniable that an installment is quite common as a method of acquiring the things that people want or need. It gives the business people in the retail industry the idea of including a retail installment contract as an essential part of their sales strategy.
What is a Retail Installment Contract
In 1850, the American manufacturer of domestic sewing machines, Singer, started to use installment sales to sell their products. It wasn’t long until other retail businesses, such as auto and furniture dealers followed through. However, to complete a sale, you don’t just give the product without an assurance that you will get the payment. As a businessman, you have to obtain a retail installment contract where you and the buyer sign for various reasons, such as the assurance that you will get the payment.
A retail installment contract is a type of sales contract that indicates that a buyer will pay for a service or product in the form of installment payment. The contract may state the title of the seller over the product and interests that the buyer has to pay as part of the installment payment plan. Additionally, it may include other conditions about the transaction.
Essential Components of a Retail Installment Contract
The retail installment contract will serve as your protection in case of disagreement or other issues between the buyer. To ensure that you can defend yourself, make sure to indicate the following items in the agreement.
- Delivery of the Product
In a retail installment contract, you have to indicate the delivery of the product to the buyer. Most installment sales involve delivering the product before the buyer fully pay the item. Whatever you have agreed on this subject, detail it in the contract.
- Partial Payment and Installment Payments Schedule
To consider that the installment as valid, the number of terms should not go below two, regardless of the agreed amount. Take note as well that before the delivery, the buyer should pay at least 10% of the total sales price of the item(down payment). Additionally, you have to indicate the schedule of the fees. Aside from your protection, it will also serve as a reminder for your client to pay on time.
Aside from the major components, you will also include in your installment contract the subject of the sale, the sales price of the item, and other additional amounts, installment schedule and its amount, name of the buyer and seller, and date.
10+ Retail Installment Contract Samples
Looking for an automobile sales contract and other retail installment contract samples? Try the following downloadable blank and printable contract samples. You can have these zipped documents in PDF format.
1. Retail Installment Contract and Security Agreement Sample
2. Retail Installment Contract Template
3. Motor Vehicle Retail Installment Sales Contract Sample
4. Basic Retail Installment Contract Template
5. Retail Installment Contract and Lease Program Agreement
6. Retail Installment Sale Contract Sample
7. Retail Installment Contract in PDF
8. Retail Installment Contract Forms Template
9. Retail Installment Contract Example in PDF
10. Printable Retail Installment Contract Sample
11. Retail Installment Contract in DOC
Best Practices in Managing a Retail Installment Contract
There are many installment samples and templates that you can find online, which you can use for your retail business. However, these files won’t guarantee its success. That is why we included the following tips. These tips will ensure smooth installment contract management.
1. Give the Customer an Option to Decide the Billing Date
Different people can have various income sources. Some people own businesses. Other people are employees that are relying on monthly paychecks. To ensure that the customers will pay you accordingly, give them a choice to set the date of their payment schedule.
2. Set the Proper Expectations in Terms of Deduction
You don’t think that the buyer will take it lightly while seeing an unknown transaction in the statement of account, do you? Avoid it by including the name of the company that will display in their account statement in the contract. Otherwise, issues may arise, such as the unnecessary lawsuits that the customers may file.
3. Make the Policies Accessible
Make sure that the buyers can easily access the retail return policy, cancellation policy, and other policies revolving around the installment contract that both you and the customer signed. You can ensure it by providing a copy of the rules that the buyer signed during the contract signing. Additionally, we recommend you to upload these documents on the internet so that the buyer can access it anytime and anywhere.
Make sure also that you will do your part of the agreement. For example, the buyer wanted to cancel the transaction. Given that it is following the policy give him what he wants. If it is the case, make sure to discontinue charging the person to avoid unnecessary customer disputes, such as chargebacks and other claims.
4. Set Up a Customer Service Hotline
By improving your retail store’s customer service, you can ensure that you don’t just create a sale but also increase the chance of a repeat buyer. Many businesses invest in a toll-free customer service hotline for the buyers to easily reach them out and include their contact information on their website and social media profiles for this reason.
Involving a retail installment contract in doing a business indeed plays a significant role in increasing the sales of a business. Through this article, you have learned how to manage this sales method efficiently. However, remember as well that the retail industry is a broad area of the business sector. There are many things that you will learn along the way. You can also learn some of these lessons by reading relevant articles. You can start with our page about the sample retail business plan.
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