Posted by Joe Gargiulo on Sat, Apr 15, 2017 @ 07:00 AM
It’s 6:55 Saturday morning, and entire neighborhoods along a 10-mile stretch of secondary roads are vibrating as two heavy-duty dump trucks pass with engines growling. Few people are awake at this hour except for those heading to the gym, getting ready for work, or the lone homeowner eagerly awaiting the delivery of building materials from a landscaping supplier.
The convoy’s lead driver is using a smart phone with GPS to find the delivery site — a modest three-bedroom, two-bath home undergoing renovation in suburbia. The homeowner flags him down in the street and the pair discuss a suitable drop zone. Meanwhile, the second driver waits a few doors down with the motor running until the first truck unloads its cargo.
This familiar scenario is simultaneously happening at thousands of locations across the country. Homeowners and contractors place large orders of building supplies that are generally delivered Monday through Saturday to residential or commercial job sites.
Delivering Building Materials
After a weekday phone call to place the order and arrange delivery, the workflow entails pricing and paperwork; communication among the sales team, dispatchers and drivers to coordinate handling; and finally, a driver dropping off the materials and accepting payment at the job site. Whatever the mode of payment — credit card, debit card or check — there will be a delay before the funds are safely deposited in the account of the building supply dealer.
Operating a 10-wheel, tri-axle truck with a dual axle-trailer in tow, the first driver unhooks and parks the trailer before attempting to unload 20 tons of top soil in front of the house where there was once a scrawny lawn. After a successful drop, he retrieves the trailer and repeats the process, but there are only 10 tons of top soil in the trailer. When finished, he pulls his truck and trailer clear of the property so the second driver can do his magic.
The follow truck has a split load box with a movable baffle, enabling the delivery of two types of materials: 25 square yards of hardwood mulch and 10 tons of recycled road base. The second driver is dumping the loads in two separate piles on the driveway. All goes as planned.
Paying for Building Materials
The payment process now begins with the lead driver entering delivery time on an invoice that was generated in the office earlier in the week. He presents the tri-copy invoice for the homeowner to sign, date and write in debit card data. With signed paperwork in hand, the lead driver thanks the homeowner for his purchase, and both drivers head back to the yard for more pickups and deliveries. They will complete a total of seven operations this particular Saturday, but the remaining deliveries will be handled by one driver each.
With this being a Saturday, the building materials dealer will not receive funding until Monday evening — i.e. the end of the first business day following the transaction.
Meanwhile, the dealer is not aware the homeowner has paid for other items over the weekend using the same debit card, and that there will not be sufficient funds by the time Monday evening rolls around. The result is a non-payment of over $1,500 that will need to be collected.
What happened and how can it be avoided in the future?
The answer is (1) sufficient funds existed when the card was processed on Saturday; (2) one of the other charges cleared before the building materials payment; and (3) there wasn’t enough left in the homeowner’s checking account to satisfy all purchases. Thus, the dealer was left holding the bag.
The solution is a simple, but not one that most observers would expect. CrossCheck has a service called Check on Delivery (COD) that abates such minor catastrophes.
Using Check on Delivery, the building supply sales person would have entered payment information from the homeowner on the order date such as checking account number, check number and the amount. That info would have been submitted to CrossCheck for processing and a guarantee of the entire purchase amount.
Learn how Check on Delivery removes merchant risk by downloading our free guide.