| Should deposits be non-refundable? |
| Yes |
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81% |
[ 36 ] |
| No |
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18% |
[ 8 ] |
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| Total Votes : 44 |
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Topic: Non-refundable deposit required |
Rick Barnhart
From:
Arizona, USA
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Posted 1 Apr 2015 6:14 am |
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To paraphrase one side of another topic, there was some discussion about a dispute between a builder, a dealer, and a customer who cancelled the order, one day after the order was placed. According to the previous post, the dealer told the customer that the deposit still needed to be paid, or it would become the responsibility of the dealer.
It wasn't clear (to me) whether or not the deposit had already been placed, in any case, the customer said he contacted the builder, who apparently remained steadfast on retaining the deposit. The customer ended up paying the dealer $100 for his trouble, and the dealer reportedly went forward with the new guitar order, then sold the new guitar to a different customer.
I have ordered 5 new steel guitars from various guitar builders over the past several years. All but one builder required a substantial non-refundable deposit, and the one that didn't was Carter, and in that case, the guitar was already built as a "spec" and was ready to go before my order was placed. From my experience, non-refundable deposits are the norm.
I happen to believe that requiring a non-refundable deposit is a good practice. It is nothing more than a measure of good faith that builders depend on to move forward with the build, obtain the necessary materials, and plan for all related costs to produce and deliver the product.
All opinions on this topic are welcome, but I would request that it not degrade into any sort of bashing. If I've mischaracterized the basic facts in the example, please feel free to set the record straight.
_________________
Clinesmith consoles D-8/6 5 pedal, D-8 3 pedal & A25 Frypan, Pettingill Teardrop, & P8 Deluxe. |
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Glenn Suchan
From:
Austin, Texas
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Posted 1 Apr 2015 6:26 am
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Rick,
I'm not voting on this for the simple reason, refundable deposits on purchases should be discussed during negotiations between the buyer and the seller. If a seller requires that the deposit be non-refundable, the buyer can walk away from the negotiations or accept that particular term from the seller. Hence, there are no laws prohibiting non-refundable deposits.
Rick, in the case you'd mentioned, regardless if this was a new product going into production or a product ready to be sold; if the seller required a deposit up front, and started building or shipped the product prior to receiving the deposit, he has only himself to blame. The buyer can back out of the deal unless there was a written and signed, binding contract stating that upon acceptance of the contract the deposit is obligated.
Keep on picking'!
Glenn
_________________
Steelin' for Jesus
Last edited by Glenn Suchan on 1 Apr 2015 6:39 am; edited 1 time in total |
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Dustin Rhodes
From:
Owasso OK
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Posted 1 Apr 2015 6:28 am
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I posted this in the other thread.
The company I work for does custom engineered products. Nothing music related but like steels a lot of work and thought goes into our product. When someone does this to us we charge a big fee as well. They wasted our time placing the order which cost a dollar amount in man hours and well we would prefer they learn their lesson and not involve us in further tire kicking. |
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Glenn Suchan
From:
Austin, Texas
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Posted 1 Apr 2015 6:43 am
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Also, with many companies, their contracts state that upon cancellation of an order there may be a 'restocking fee'. Typically these range from 10% to as much as (in some cases) 25% or more. The seller may require the deposit as a restocking fee if an order is cancelled. Again, this is something that should be discussed prior to placing an order.
Keep on picking'!
Glenn
_________________
Steelin' for Jesus |
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Larry Bressington
From:
Nebraska
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Posted 1 Apr 2015 6:49 am
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YES...Non refundable is mandatory in today's world, otherwise there will be a lot of uncollected custom built steel's out there, that's just the way the human world works, it's not intentional MOST of the time, but a builder cannot have this kind of wishy washy behaviour.
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A.K.A Chappy. |
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Glenn Suchan
From:
Austin, Texas
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Posted 1 Apr 2015 6:56 am Re: Non-refundable deposit required
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| Rick Barnhart wrote: |
To paraphrase one side of another topic, there was some discussion about a dispute between a builder, a dealer, and a customer who cancelled the order, one day after the order was placed. According to the previous post, the dealer told the customer that the deposit still needed to be paid, or it would become the responsibility of the dealer.
It wasn't clear (to me) whether or not the deposit had already been placed, in any case, the customer said he contacted the builder, who apparently remained steadfast on retaining the deposit. The customer ended up paying the dealer $100 for his trouble, and the dealer reportedly went forward with the new guitar order, then sold the new guitar to a different customer.
I have ordered 5 new steel guitars from various guitar builders over the past several years. All but one builder required a substantial non-refundable deposit, and the one that didn't was Carter, and in that case, the guitar was already built as a "spec" and was ready to go before my order was placed. From my experience, non-refundable deposits are the norm.
I happen to believe that requiring a non-refundable deposit is a good practice. It is nothing more than a measure of good faith that builders depend on to move forward with the build, obtain the necessary materials, and plan for all related costs to produce and deliver the product.
All opinions on this topic are welcome, but I would request that it not degrade into any sort of bashing. If I've mischaracterized the basic facts in the example, please feel free to set the record straight. |
Rick, something else has occurred to me: From whom was this customer to be billed? If it was the dealer, then the dealer should have let the customer know (during order negotiations) that the deposit would be obligated upon placing the order. If the deposit obligation occurred between the dealer and the manufacturer; and the dealer didn't place the same obligation on his customer, then the customer should not be required to pay the deposit to the manufacturer - the dealer should.
Keep on pickin'!
Glenn
_________________
Steelin' for Jesus |
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Glenn Suchan
From:
Austin, Texas
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Posted 1 Apr 2015 7:02 am
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| Larry Bressington wrote: |
| YES...Non refundable is mandatory in today's world, otherwise there will be a lot of uncollected custom built steel's out there, that's just the way the human world works, it's not intentional MOST of the time, but a builder cannot have this kind of wishy washy behaviour. |
No Larry, non-refundable deposits may be required by many manufacturers. However, with each and every potential sale, the customer can elect to accept such a term or walk away from the negotiations. For this reason, many companies may negotiate to wave a non-refundable clause on deposits.
Keep on pickin'!
Glenn
_________________
Steelin' for Jesus |
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Chris Grigsby
From:
Boulder, CO
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Posted 1 Apr 2015 7:58 am You Aren't Asking The Right Question
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The question requires further clarification...of course, a non-refundable deposit should be required if the customer is custom ordering a product built to their unique specifications. As has already been mentioned, the customer must also be clearly informed as such so that they can make their decision accordingly.
Requiring a non-refundable deposit on an assembly line product that can just as easily be sold to another buyer is in poor practice, but certainly the business owner's prerogative, again, provided that the policy is fully disclosed.
In my example with Mullen, I was never informed of any such policy, and the guitar was already built when I 'put my name on it'. From a legal standpoint, Mullen or the dealer can claim they have a right to keep money, but that doesn't make it legally so. Any credit card company would support a chargeback from the customer in that scenario. I paid a fee to the dealer as a courtesy because I empathized with how poorly he was treated by the manufacturer...but I certainly wasn't obliged to do so.
Best,
Chris
_________________
Mullen Discovery S10, Hilton VP, Kemper Profiler Head and Kabinet. |
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Rick Barnhart
From:
Arizona, USA
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Posted 1 Apr 2015 9:01 am Re: Non-refundable deposit required
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With all due respect, in the aforementioned topic, the customer indicated he placed an order for a new pedal steel guitar. Right or wrong, I understood that to mean that it was an order for a new guitar built especially for him. Now, it seems that has changed or new information offered. I mentioned in my initial post that in my experience, a ready built "spec" guitar did not require a deposit from the builder. The question remains, whether it's called a deposit or a cancellation fee...should deposits be non-refundable?
| Rick Barnhart wrote: |
| I have ordered 5 new steel guitars from various guitar builders over the past several years. All but one builder required a substantial non-refundable deposit, and the one that didn't was Carter, and in that case, the guitar was already built as a "spec" and was ready to go before my order was placed. From my experience, non-refundable deposits are the norm. |
_________________
Clinesmith consoles D-8/6 5 pedal, D-8 3 pedal & A25 Frypan, Pettingill Teardrop, & P8 Deluxe. |
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Herb Steiner
From:
Spicewood TX 78669
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Posted 1 Apr 2015 9:20 am
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Perhaps I'm not reading the initial example correctly. You mean to say the DEALER demanded the deposit though the order was cancelled ONE DAY after it was made?
IOW, no action by the manufacturer was taken at all, correct? No expense was incurred by anyone, yet the deposit is supposedly non-refundable? That sounds unconscionable to me, whether required by the dealer or the manufacturer.
This is a good reason why purchases should be made with credit cards when dealing with situations like these.
_________________
My rig: Infinity and Telonics.
Son, we live in a world with walls, and those walls have to be guarded by men with steel guitars. Who's gonna do it? You? You, Lt. Weinberg? |
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Glenn Suchan
From:
Austin, Texas
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Posted 1 Apr 2015 9:27 am
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Rick, to clarify my previous statements; when selling most items, legitimate businesses use 'Terms and Conditions' for the sale. Even grocery stores have terms by which merchandise can or cannot be returned. The 'Terms and Conditions' of the sale are the covenant document between the buyer and the seller. Also, the buyer can have 'Terms and Conditions' of purchase. Generally, when both parties have terms and conditions, concessions will (but not necessarily) have to be made by one or both parties in order to satisfy the sale.
Smart sellers and buyers will completely understand and agree to one or both parties terms and conditions, whether or not they have been modified through negotiations, before they buy and/or sell.
Keep on pickin'!
Glenn
_________________
Steelin' for Jesus |
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Rick Barnhart
From:
Arizona, USA
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Posted 1 Apr 2015 9:49 am
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| Herb Steiner wrote: |
Perhaps I'm not reading the initial example correctly. You mean to say the DEALER demanded the deposit though the order was cancelled ONE DAY after it was made?
IOW, no action by the manufacturer was taken at all, correct? No expense was incurred by anyone, yet the deposit is supposedly non-refundable? That sounds unconscionable to me, whether required by the dealer or the manufacturer. |
Herb, my example only paraphrased a customer's allegation from a separate topic, about placing an order for a new guitar. The customer indicated that the builder DID get involved during a phone conversation initiated by the customer...and allegedly refused to back off the no refund policy on their website. I only paraphrased in order to take the unpleasantries out of this thread.
It was only after I started this thread, that I learned the guitar was a pre-built spec guitar, and not a custom guitar built or to be built specifically for this customer.
_________________
Clinesmith consoles D-8/6 5 pedal, D-8 3 pedal & A25 Frypan, Pettingill Teardrop, & P8 Deluxe. |
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Mike Mantey
From:
Eastern Colorado, USA
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Posted 1 Apr 2015 2:17 pm
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We do require a $500 non-refundable deposit. There are many reasons we do this. Probably the most common and obvious is that we begin planning or even producing for the order and when it is cancelled it causes issues.
Our Dealers may or may not charge one that is their choice, however they would be obligated to the guitar or the $500 deposit if they cancel the order as well.
In the case being mentioned there was a guitar to be produced within a few days so the buyer bought and paid for the guitar. Therefore the order came in, was revised to go to him, and then another guitar was needed to take its place. So all was good, started on a new set of endplates and began to start producing the replacement guitar. Then the order was cancelled. So after that, there now was a guitar that the dealer had marked sold, we had marked sold and now both parties have to reverse everything back to the original way.
It was not the end of the World, but it is a real pain to have to handle business this way, therefore the deposit gives us security that you are serious and if not it covers the trouble caused in most cases.
I did not plan on posting on this because it was an experience (a bad one) that a customer had with Mullen guitars.
The reason I posted was just so the general public might understand why we have the deposit policy.
And to the customer involved, I am sorry for the bad experience you encountered with our Company, believe me when I say it does not make us happy to have bad encounters in business.
_________________
Mike Mantey
President and C.E.O.
Mullen Guitar Co., Inc.
(970) 664-2518
sales@mullenguitars.com
www.mullenguitars.com |
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Richard Sinkler
From:
aka: Rusty Strings -- Missoula, Montana
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Posted 1 Apr 2015 5:56 pm
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I'm with Mike 100%.
_________________
Carter D10 8p/8k, Dekley S10 3p/4k C6 setup,Regal RD40 Dobro, Recording King Professional Dobro, NV400, NV112,Ibanez Gio guitar, Epiphone SG Special (open D slide guitar) . Playing for 54 years and still counting. |
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Larry Bressington
From:
Nebraska
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Posted 1 Apr 2015 6:31 pm
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I'm with it too....They ought to make it customary across the board for (all builder)s... it cuts out all the confusion with people having different ideas and different policies that are not standardized, and are very un clear and often hidden in the agreement or conversation. We know this system is unreliable as we read these stories over and over on this forum. Dealers need to speak up front and be clear if this does not become a mandatory procedure across this line of business.
I also think that a dealer who is unclear and does not explain the "terms of sale' very clearly and should be held responsible for not policing his own law?? Maybe a new system could be devised by (text message with a required reply)?
There is nothing worse for two parties, than an unclear and un systematic system, it creates hard feelings over something that can be illuminated right from the beggining, tell me I'm wrong, the proof is in the history of these ever occurring situations.
My reply to this thread, is not reflecting on anybody particular or company, just an open conversation!
_________________
A.K.A Chappy.
Last edited by Larry Bressington on 1 Apr 2015 7:05 pm; edited 1 time in total |
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Rick Barnhart
From:
Arizona, USA
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Posted 1 Apr 2015 6:57 pm
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Larry, while that may simplify things, I don't think it's necessary for all builders to standardize practices. But really if you think about it, what is the point of collecting a deposit, if it's refundable?
_________________
Clinesmith consoles D-8/6 5 pedal, D-8 3 pedal & A25 Frypan, Pettingill Teardrop, & P8 Deluxe. |
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Bob Moore
From:
N. Rose, New York
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Posted 2 Apr 2015 3:41 pm
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| In some states have a 3day period that a decison made can be changed and sale cancelled. Something to consider. Bob |
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Richard Sinkler
From:
aka: Rusty Strings -- Missoula, Montana
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Posted 2 Apr 2015 5:49 pm
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Looks like the 3 day rule is a federal law. This from the website usa.gov. Full link at bottom.
| Quote: |
Know Your Rights
This federal law protects consumers in their homes during door-to-door sales pitches or at sales in temporary business locations. According to the FTC, the 3-Day Cooling-Off Rule does NOT apply to the purchase of new automobiles or items sold online. It only applies when a company is selling something that costs $25 or more at a location other than its regular place of business.
To comply with the 3-Day Cooling-Off Rule, a seller must inform buyers of their right to cancel the sale and receive a full refund within three business days.
Be aware that there are situations in which the Cooling-Off Rule does not apply:
You made the purchase entirely by mail, online, or telephone.
The sale was the result of prior contact you had at the seller’s permanent business location.
You signed a document waiving your right to cancel.
Your purchase is not primarily for personal, family or household use. .
You were buying real estate, insurance, securities, or a motor vehicle.
You cannot return the item in a condition similar to how you received it.
Remember, if you paid by credit card and are having difficulty getting your refund, you may also be able to dispute the charge with your credit card company under the Fair Credit Billing Act. |
Emphasis and color added by me.
http://www.usa.gov/topics/consumer/smart-shopping/home-shopping/3day-rule.shtml
_________________
Carter D10 8p/8k, Dekley S10 3p/4k C6 setup,Regal RD40 Dobro, Recording King Professional Dobro, NV400, NV112,Ibanez Gio guitar, Epiphone SG Special (open D slide guitar) . Playing for 54 years and still counting. |
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Charlie McDonald
From:
out of the blue
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Posted 3 Apr 2015 3:18 am
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| Richard Sinkler wrote: |
Be aware that there are situations in which the Cooling-Off Rule does not apply:
You made the purchase entirely by mail, online, or telephone. |
Would that not apply to all forum purchases?
There seem to be more exceptions to the rule than otherwise; if the item is for personal use, it would be an exception.
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Those that say don't know; those that know don't say.--Buddy Emmons |
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Richard Sinkler
From:
aka: Rusty Strings -- Missoula, Montana
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Posted 3 Apr 2015 10:31 am
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As it reads, I would think so. That law is pretty wishy-washy.
_________________
Carter D10 8p/8k, Dekley S10 3p/4k C6 setup,Regal RD40 Dobro, Recording King Professional Dobro, NV400, NV112,Ibanez Gio guitar, Epiphone SG Special (open D slide guitar) . Playing for 54 years and still counting. |
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Stuart Legg
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Posted 5 Apr 2015 10:19 pm
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The law has little to do with this kind of agreement. The money is mine until you get the money from my bank then it’s yours. So if I prevent you from getting the money from my bank in some way then you’re sht out of luck!
It seems to be a sellers market with steel guitars in that folks are willing to put up large amounts of nonrefundable money and wait forever for delivery. So get over it. If you can’t afford to lose your deposit and can’t wait forever you don’t need to be ordering a custom guitar.
I figure if I can be without that particular steel guitar for a year before I get what I ordered then I really didn’t need it did I.
Of course if you are an Icon of steel guitar with your nothing short of continual preferential treatment the premise of this topic will seem silly to you. |
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Billy Carr
From:
Seminary, Mississippi, USA (deceased)
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Posted 6 Apr 2015 3:30 am PSG bus.
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| Personally, for me only speaking, I prefer to pay the full amount upfront and then let the builder build a guitar or in Mullen's case, I'd probably just buy one they have on there website for sale. If they didn't have a guitar for sale on the site then I'd gladly order one and pay upfront. Thanks. |
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