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How I Manage Client Purchases as a Personal Concierge

At the request of one of our community members, I am going to outline below the steps I take when making purchases on behalf of clients.

This can be a challenging process, especially when you first start out. In fact, it is how I got myself into quite a financial pickle early on, when I wasn’t keeping up with my cash flow, and turned into a bank for my clients instead of always being up-to-date.

The biggest concerns I am hearing from the members of our community are:

  • what if a client doesn’t pay after you’ve made the purchase on their behalf, and
  • what if the amount you have received from the client prior to making the purchase is more or less than the actual purchase price?

Below are some key steps I take to ensure I am not out of pocket, based on the different types of clients I have and the different types of purchases we make for them.

 

  1. Regular Clients with Regular Purchases

These type of purchases are usually things like weekly grocery shopping or weekly dry cleaning, but could be any type of purchase we make on a regular or semi-regular basis. In these cases, these are clients we have gotten to know quite well and have a relationship with. They will often set up an automatic payment to be transferred to our bank account on a weekly, fortnightly or monthly basis, and we keep track of all the money they have transferred and the purchases we have made on their behalf. We are always both on the same page, and send them regular statements outlining this. Generally they will have some money in credit, but sometimes they may be slightly behind. If the money is in credit, we will usually keep it on hand, or occasionally refund some of the amount if what we are holding is more than we will reasonably require. If they are slightly behind, we will usually send them an invoice for the difference, knowing that their regular payment will be coming in soon for future payments.

 

  1. Regular Clients with One Off Purchases

For our regular clients where we are only purchasing things for them on an as-needs basis, we will request that they transfer money into our account (or very occasionally leave cash for us) for the purchase they are making. It is standard policy, which is covered in our client agreement (members of The Concierge Secret Society can download an example of our client agreement inside the template library here), that all purchases are to be paid for upfront before we incur the cost. Usually we or the client has done thorough research on the cost of the item, so the amount they are transferring to us is quite accurate. If they end up transferring more than they item cost, we will refund the difference (unless they are happy to leave this amount in credit with us for anticipated future purchases). If the amount is less that the purchase item (which we try to avoid but sometimes this isn’t always possible) we then immediately advise them and send them an invoice for the balance. With regular clients who we know always pay their invoices, we are generally comfortable with this as we trust them and know they won’t leave us out of pocket for long.

On occasion, the client will ring through to the store or service centre, such as for car servicing or a retail store, with their credit card and make the payment themselves, just getting us to arrange the service or product pick up. This is especially useful for high cost purchases.

 

  1. Regular Clients with Urgent Purchases

It does happen that a regular client will ring up with an urgent purchase that needs to be done that day or the next day, and there is no way they can get cash to us, or that a bank transfer will have arrived in our bank account prior to the purchase. If it is a large purchase and is going to dramatically affect our cash flow, or we feel hesitant, we either request that they make payment direct to the store or service provider themselves, or, if this can’t happen, we may have to say that we are unable to do this for them. Otherwise, if it is a reasonable request and we know and trust that they will pay our invoice, we will choose to go ahead with the purchase and send them an invoice immediately to recoup the purchase. There is very rarely an issue of any sort with this and the client pays promptly. However, you always have the right to refuse to make purchases of any size, big or small, if you don’t feel comfortable doing so, or are unable to do so financially. This is fair and reasonable, and I would also address this in the client agreement that you have asked the client to sign prior to them engaging you.

 

  1. Unknown Client with Regular Purchase

If you have a new client who is wanting you to make regular or semi-regular purchases on their behalf, I always ensure that they make payments up front. I don’t start a new job for them unless I have payment from them, and that it will more than adequately cover the purchases they are requiring. I let them know that it is preferable to transfer more money than would be required, because we can always refund them (or keep the money in credit for the future) but that we can’t guarantee that we will be able to make the purchase if we don’t have enough money from them. This is part of the standard policy of engaging with us, and as said before, is covered in our client agreement which must be signed before we commence work with them.

 

  1. Unknown Client with Urgent Purchase

We have had a few urgent requests from clients we have never worked with, often from people who are overseas and need to deliver something to a friend, colleague or family member urgently. In these cases, I state that yes we can do it, but that they must pay in full for all purchases, plus the estimated time it will take us to deliver the service, prior to us starting the job. The best way I find for this to happen is to request money via PayPal, as once they have made the payment you will immediately see it in your PayPal account, and can then immediately transfer it to your bank account (although it will usually take a few days to arrive into your bank account). If you have the cashflow to make the purchase, knowing that the cash is on its way to your bank account, then you can feel comfortable to go ahead. However, if you don’t have the cashflow to do this, or don’t feel comfortable in making the purchase, then you have every right to decline the job. I have had a couple of requests where my gut feeling was telling me that something wasn’t quite right, so I have said that we were unavailable. However, I have had numerous successful jobs this way, where people have been overjoyed with the service we have provided, especially when delivering a care package to a sick girlfriend. You should always go with your instincts, and feel comfortable saying no if you feel the need. And once again, always ensure they have signed your client agreement prior to going ahead.

 

How do you work out how much money the client should transfer?

To ensure that I am adequately covered, I always make sure I do thorough research as to where I am going to purchase the item, and confirming the cost of the item. This is usually done fairly easily via the internet, and I will also often ring the store to (a) confirm the item is in stock, (b) ask them to put it aside for me and, (c) confirm the final price. Even if a client has done some research and told me the price, I will often double check this just to make sure. However, groceries and dry cleaning for example, can be a little trickier. Usually last minute requests aren’t huge purchases so you may just be short a few dollars either side and can often comfortably manage this. For the regular, larger grocery shops, the client usually has an idea of their normal purchase amount, and will have transferred more than enough money to cover this. The bottom line is, ensure you have done your research, and have clarified with the customer very clearly what you will do if you don’t in fact have enough money from them. Will you decide not to make the purchase until you have the correct amount, or will you send them an invoice?

 

Using PayPal For Client Purchases

PayPal is a great tool for receiving purchases from clients, especially urgent requests, because you can get the money quickly, and immediately see the money in your PayPal account. However, there are a few downsides that you may want to consider:

  • There are fees involved in using PayPal. For every amount you receive from a client into PayPal, they take a percentage fee. This may not be a big issue if the client is just paying for your time, and you incur this fee as a business expense. The issue comes when you are making a purchase on their behalf and they transfer the exact amount for the purchase, without considering that PayPal will be taking out a fee from that transferred amount. How we tend to manage this is that we ask them to transfer extra to cover the fee (more than we anticipate it will actually be). If we need to provide them with a refund, we then do this from our bank account, rather than PayPal, as PayPal will return the fee to you once you provide the refund, and then this can get rather confusing and messy. It can be a bit tricky to understand at the start so I suggest you read here on how PayPal manages refunds and partial refunds work or email me and I can help further.
  • Clients can seek to get their money back via PayPal disputes. The thing that makes many clients comfortable using PayPal, for all online purchases, not just through your personal concierge businesses, is that if they feel they haven’t received the goods or services they paid for, they can submit a case with PayPal to seek to have the funds returned within 180 days of purchase. However, this can pose a degree of risks from a business perspective. Clients can file a dispute directly with PayPal and then PayPal contacts you, asking you to provide proof that indeed the goods or services were provide to them. If PayPal doesn’t feel you have provided adequate proof, they will automatically transfer the money back to the client out of your PayPal, and there is little you can do. Now I haven’t had this happen in my personal concierge business, but it is one of the risk you can take. It is why I recommend you track everything via email, and keep copies of all receipts. It is especially important to get written confirmation from your client that they have received the goods so that if they challenge you, you have written proof that you can send to PayPal. You also need to understand the process so I suggest you read further information here.

 

Do you have any other tips or recommendations?

All the information provided in this article is just my experience, and the way we currently handle things. However, it is not professional advice, and it is up to you to research everything thoroughly to ensure it is adequate for your business requirements. We are always open to newer and more secure ways of managing client purchases, so if you have any other tips or recommendations, I would love to hear them. You can comment below or email me directly.

 

Do you have any further questions?

I’ve done my best to cover all the variations of client requests however, if you feel there is more you are unsure of, or have a specific example you would like to share, please comment below or email me with your question.

 

Do you have any blog post requests?

This blog post came about as a direct result of a request from one of our community members. I’d love to know what further information, tips or advice I can provide you, so please don’t hesitate to get in touch with any blog post requests you may have.

If you are looking for more business management help, don’t miss my training ‘Organising You Personal Concierge Business’ inside The Concierge Secret Society.

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