READY-MONEY SHOPPING.
LORD CAIRNS, one of the best men of business in Parlia- ment, told the House of Lords on Monday that, taking only the cases which came into Court, it was certain that the consuming classes in England alone paid eighteen millions a year" for the privilege of taking credit. In other words, that is the amount lost by traders every year through bad debts, and the amount, therefore, which would be saved to the trading body—that is, ultimately, to the consuming body—by payment in ready-money. The loss is not, of course, all incurred by shopkeepers ; but a great deal of it is, and the ease with which it is borne is an almost unintelligible marvel. A decent grocer or butcher, not of the first class, would be ready to revolt if the Government suddenly taxed him in £30 a year additional, and would assault some vestryman if the rates rose without warning by that amount; yet two bad debts of £'20 each will cost him more, and be written-off with an angry resignation, which has in it nothing of despair. Indeed, we are understating the case. Decent shopkeepers, who never expect to clear more than £300 a year for themselves, will constantly make five or six bad debts of £5 each in the year, and yet go about under that extra income- tax of two shillings in the pound quite cheerful, and apparently contented. The truth is, that a proportion of bad debts is allowed for in tradesmen's prices, and it is in reducing that proportion that their best chance—perhaps, indeed, their only chance—of rivalling the Stores in cheapness lies. They cannot compete with them in capital. They cannot hope to make their assistants work as hard. They cannot evade quite as completely the pressure for charities, kindnesses, and con- siderations of all kinds. But they can beat them in personal attention to purchases, to sales, and to customers ; and with that immense advantage in their favour, they could, if they could only get ready-money—real ready-money, money over the counter—hold their own. Ready-money is everything to them, and though three-fifths of them are unintelligibly ignor- ant of arithmetic, and keep books of preposterous sim- plicity, still they know that one fact perfectly well. At present, with calculations based upon six months' credit and ten per cent. of bad debts, they are compelled to add at least 25 per cent. to wholesale prices to secure a " living " profit at all ; but with ready-money there would be no bad debts, their small capital could with a brisk business be turned over twelve times a year, and with three per cent. added to wholesale prices, they would do comparatively very well. Yet no trade and no combined group of tradesmen really insist on ready-money, and we should like to know why.
We thought we knew why. We had always fancied that the fault lay with the well-to-do customers, whose dislike of trouble, and caste dislike of anything approaching to inde- pendence in tradesmen, made them refuse to submit to the requirements of the system. Very few men, and still fewer
women, carry money about with them. They are afraid to carry gold, they never have sufficient silver, and it is an absurd tradition with all banks that cheque-books, instead of being issued in pocket-book form, and therefore easily portable, must be issued either as small quartos, which cannot be carried at all, or as long, thick rolls, which will not lie pleasantly in any pocket now worn by man or woman. There is no Silver Bank, though the first man who starts one will make twenty per cent. upon a small capital ; and the payment of small, broken sums in the shop itself is therefore in practice found to be inconvenient. The demand of the tradesman for ready-money deters the cus- tomer, who cannot see why a tradesman who knows him should not trust him with the goods, and is horribly offended if the porter who delivers them refuses to put them out of his hands until he has been paid the money. So inveterate is this feeling, and so deep the sympathy with it on the part of all classes, that the richer tradesmen constantly lose by customers whom they regard as " doubtful," and about whom they have issued the most peremptory orders. Their employ& simply will not inflict what they regard and know that the customers regard as a kind of insult, and prefer taking the risk. We believe that even the cheap tailors, most of whom started on the system of "No cash, no goods," have been beaten about it, and prefer
worrying for quick payment to refusing to deliver; and we have heard men of competent authority declare that " no shop of two prices—one for money, and one for credit—has ever made a large business." The shopkeeper may put out as many adver- tisements about discount as he pleases, but he has always to give credit at his ready-money price. The habitual customers always take the goods without immediate payment, and then expect to be charged the lower prices. " He can sell," they say, " at his discount, for he does ; and I always pay him at the quarter, and why should I not have the lowest rate?" There is no fairness in the argument, but half the customers do not see the injustice ; and the other half, who do, reckon the tradesman's loss of interest by the year, and quite forget that he is not an annuitant, but a business man, whose only chance of success in his low price is to turn over his money once a month.
We say we should have thought this explanation, this dislike of a customer to take trouble or submit to a fancied slight, quite final, but for the prosperity of the Stores. They succeed in exacting ready-money. The customers pay over the counter there, and never grumble at all. They have money for the Stores in their pockets, or they carry their cheque-books, without repining at their bulginess, or they deposit sums in advance, without considering that practice any evidence of distrust. If they have not the money with them, they go without their goods till they have, and are no more affronted by a refusal to give them credit, than they are by the sleet when it hits them in their faces. It is only an uncomfortable arrangement, under laws which they did not make and cannot hope to control, and which, therefore, are obeyed with as much good-humour as human nature will admit. If, then, the Stores can exact ready-money, why cannot the Shopkeepers do it, and so stand at once prepared to face a rivalry which they declare, with ever increasing seriousness, to be growing fatal to their prosperity ? They are quite in earnest, so earnest indeed as to be unreason- able. They believe, and in most cases with justice, that the competition of the Stores, though it does not destroy their trade, does make all the difference between profit and loss ; and they would almost give their ears to find a remedy, yet the simplest and most complete of all is never adopted. Why ? What is it that prevents any respectable street of shops, or the whole body of any trade, from adopting the Stores' plan, and selling only for ready-money, or its equivalent, payment on delivery of the goods ? We suppose the answer will be that the tradesmen fear to lose their best customers, the customers who deal through servants. The mistresses will not send out money to be paid away for goods at unknown prices, nor will they always be " sending down" money to the kitchen to be paid to the porters who deliver. If they are compelled to do it, they will grow restive and betake themselves elsewhere, or they will be told by their servants—who like the system of " ordering," the power it gives them, and the company it secures them —that none of the exacting tradesman's goods are perfect; while as to his men, "They are that rude, if they have to wait, that it ain't to be put up with !" There is force in that argu- ment, but again it is met by the example of the Stores. If business is departing, as the tradesmen say, it is time to run a little risk ; and if the mistresses can be tempted to the Stores, where they do not send servants, why not to the shops ? We believe, ourselves, that though payment over the counter could never be enforced, at least until port- able cheque-books are invented, and some Bank allows cheques for any amount, however small, payment on de- livery could be enforced very easily indeed, particularly if de- liveries were confined to some particular hour ; and that the real difficulty of the tradesmen is their imperfect power of com- bination. They are afraid of each other's rivalry, much more than of their customers' opposition. They could not watch each other sufficiently, and Smith would always be fancying that Brown gave up his goods without payment to secure favour, or to avoid giving offence. They have neither the camaraderie nor the freedom from pecuniary care which enables workmen to be so rigid, even when, as in the case of their annoying rule about Saturday afternoon, they are giving the bitterest offence both to their employers and to the customers who bring to their employers profit. The trades- men have to face the difficulty of which the Stores as yet know nothing—though they will feel it whenever the Shopkeepers, recovering their senses, set up Stores of their own—the diffi- culty of a competition so intense, that a tradesman may as well go into the Gazette as earn a reputation for disobligingness, or for employing men of unendurably harsh manners. Perhaps, if the danger from the Stores becomes greater, as it certainly will do, for they are spreading rapidly, a new power of combina- tion will be developed among shopkeepers ; but till it is, we fear the adoption of the ready-money system, attrac- tive as it would seem to be both to buyer and seller, must be regarded as nearly hopeless. It is defeated partly by an accident—the difficulty of paying small sums in paper— partly by the natural laziness of mankind, and partly by the English feeling that it is rude for an inferior to adhere to an annoying rule merely because it is profitable to him to adhere to it. So strong are custom and caste, that rather than pay for everything at once, the well-to-do pay twenty per cent. more than they need, besides paying an immense proportion of the eighteen millions a year which Lord Cairns says is every year lost by bad debts in England alone.
Previous page
