September 23, 2016 — My motivation for writing ‘Scoop’ each week the past 8 years has been to openly discuss issues that affect our industry whether those topics are directed at developers, consumers, owners and/or industry personnel including the practices, policies or procedures of ‘the biz’. And for the record, once again, I love this industry and am truly thankful for all those forgotten souls many decades ago who took all the original risks and forged what became this awesome worldwide industry. If not for them, well, I’ll save that for another day. Today, I want to ponder the subject of ‘charge-backs’ as they pertain to the sales peeps working those magical little round tables in the Land of Time.
So Here’s The Scoop: Other than ‘heat merchants’ (aka: outright liars) most timeshare sales reps and closers are straight shooters who sell & close clean and when they do so are they not entitled to keep their earnings just like other Pros such as a (e.g.) a lawyer, a doctor or real estate agents working in general or commercial real estate sales?
Now I’m just thinking out loud but did you ever notice that other than some contingency type cases when any of us hire an attorney to represent our interests and our legal eagle loses our case we still have to pay that lawyer anyway?
How about when a loved one has surgery and ‘passes on’ during or shortly after the operation; did you ever consider that the surgeon (and hospital) earned and is still paid their full fee by our insurance company, our survivors and/or the ‘Gov’ (aka: tax payers)?
And when we go through a real estate agent, sell a piece of land, a building or a house and make it through escrow (close), and then the ‘buyer’ can’t even make the first payment — was not the real estate agent paid their commission and unaffected by the buyer’s inability and/or failure to pay on the note a month later?
Even in the retail industry the owners have a loss prevention process to recoup their losses from theft. Successful retail operations know what percentage of their merchandise will be stolen, the cost of the losses, and they factor those losses across the board and include the losses into the prices of all the other products they sell.
Plus, in the Bar business they have a term called “Shrinkage” which, unlike the well known “Seinfeld” episode using the same term, recoups the percentage of booze the bartenders will spill while pouring cocktails and/or the percentage of beer bottles that will break because of being dropped or the neck snaps/cracks/chips when opened as well as the number of ‘comped’ (aka: on the house) drinks or theft, etc. All those losses are also factored into the prices of all the other drinks, etc. to recover the bar owner’s losses.
I could give a whole bunch of other examples including foods that spoil at the local grocery store and/or deducting losses from a business or professional’s taxes, etc. but the bottom line is that most losses are predictable and usually recoverable when they are factored into all the other net selling prices, etc.; a standard, normal and customary business practice.
But apparently that is not the case in ‘the biz’ because I’m told there may still be one or more developers who won’t even pay their reps’ fully earned commissions until the buyer (aka: the Developer’s Client) remits upwards of six (6) “timely” monthly payments and then, and only then, are the sales reps finally PIF (paid in full) their earned commissions.
And I understand that even after the rescission period, if a new TS owner/member cancels and if a developer elects to provide a refund — less, of course those “liquidated damages” (aka: compensation to the developer) — the sales reps are also charged back all commissions, spiffs or bonuses they earned doing their job.
Worse, IMO, I also understand that some developers these days still don’t even have the decency to give their reps an advance notice and/or a heads-up that a charge-back will affect their next paycheck.
That there are times when the reps’ bills have to be met, groceries and diapers must be bought, etc., but the reps will discover at (e.g.) 5:00 P.M. on payday that a check is not forthcoming and often reps have to dip into their savings and/or scramble for moola to make their car payment, pay the rent, or pay their utilities, etc. on time.
Don’t get me wrong as I want every developer to make as money much as they possibly can. I want them to become wealthier, have a great life and to continue to build fine resorts and create jobs all around the world. I am, despite what I sometimes write and what others may believe, 100% PRO DEVELOPER!
That said, this nonsense of most charge-backs needs to end post haste. And I say that because if any developer hasn’t already factored those losses into their net selling prices then that is their ‘bad’ – and they should ‘eat’ and then write-off the losses!
And those developers who have factored their losses into their net selling prices and who are still, after (e.g.) the rescission period, charging back their reps – well, that, too, is uncalled for and yet begs the next question – Whatzup with that?
Good Luck Out There
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