Long, long ago, when we first started publishing print books back in 1999, we used to offer all retailers, schools and libraries credit. Some had ridiculous terms, like “Net 90” (meaning we had to wait three months for a check that sometimes never arrived), while others blatantly violated our purchase terms. How?

At BookLocker.com, we don’t accept returns and we never have. Bookstore returns are an old World War II practice that should have died at the end of that war. Accepting returns hurts publishers and authors. You can read our thoughts on this practice HERE.

Bookstore customers were placing special orders for our books and those bookstores were happy to buy those books from us even though they could not return the books for a refund. The chances of a customer returning a special order are pretty remote. However, some bookstore clerks would order more than one copy, perhaps thinking if one customer needed one, perhaps another customer would come in looking for the book, too.

So, we would ask the store to complete our wholesale order form, which specified our terms (discount, delivery, no returns, etc.) and we would send them an invoice after the shipment went out.

Boy, were we surprised when one of the largest bookstore chains in the country returned some of our books. I sent them a note reminding them that our books weren’t returnable, and offering to ship the package back to them. They didn’t respond. Oh well, I thought. They’d already paid for the order so no skin off our nose, right? Wrong! When they mailed us our next check, we were shocked to see they’d deducted the entire cost of the previously returned titles from the amount due on other invoices. Our revenues started to suffer and we had a pile of returned, unsellable books stacking up in our office.

Another bookstore chain paid some of its bills, but not all, claimed several shipments were never received despite the proof we provided with tracking numbers and the names of their employees who had signed for the packages, and returned boxes of books that had never even been opened, despite signing our prepayment order form before each purchase (which, remember, made them agree to our no returns policy). We started to suspect they were just plain trying to rip us off.

Nothing was more surprising than our dealings with schools and libraries, however. We didn’t have problems with them returning books. We had problems getting paid – period. A large percentage of our invoices to schools and libraries went unpaid and our collection efforts on those accounts were ignored. I expected such behavior from a few retailers but not from such a large number of government entities.

After a year of that nonsense, we were thousands of dollars in the hole on wholesale orders and we’d spent countless hours chasing after payments that would never arrive. It was time to change our payment policy.

We stopped giving credit to anyone and everyone. Any retailer or government agency that wanted to buy books had to pre-pay. No exceptions. We added payment information (credit card number, etc.) to our Wholesale Order Form, and gently but firmly told all buyers we required that form to process their order.

We expected some argument or lost sales but we were shocked when nobody complained. It seems they were accustomed to needing to prepay some firms and they all had processes in place to do just that. They would either instantly pay with a corporate credit card online or they would send our prepayment order form to their accounting department, and have a check printed and mailed to us.

We lost no business by demanding prepayment from everyone and, in fact, our wholesale orders have continued to grow steadily every single year. Best of all, we haven’t been stiffed by anyone using our wholesale order form – ever. None of them has even so much as issued a chargeback on an order, or written us a bad check. They also never attempt to return our books. If we’d continued offering credit, our sales would not have increased but our estimated bad debt would have – to the tune of tens of thousands over the years, based just on the amount we lost in such a short time many years ago.

I got sick to my stomach when I read about the amount of money Borders owes some publishers. It’s a downright shame those publishers didn’t see the light years ago, and start making Borders prepay for all their orders like we did. You see, Borders was one of the companies that gave us BIG problems in the beginning, and one of the reasons we switched to prepay only.

If you plan to start selling your book directly to bookstores, government entities, or other retailers, I strongly recommend you, too, avoid bad debt and numerous headaches by requiring prepayment. You are welcome to use the format of our prepayment order form (link above) if you want. Any of these firms or entities can pay via check or credit card, and some are even happy to use Paypal.

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Angela Hoy is the co-owner of WritersWeekly.com and BookLocker.com. WritersWeekly.com is the free marketing ezine for writers, which features new paying markets and freelance job listings every Wednesday. According to attorney Mark Levine, author of The Fine Print, BookLocker.com is: “As close to perfection as you’re going to find in the world of ebook and POD publishing. The ebook royalties are the highest I’ve ever seen, and the print royalties are better than average. BookLocker understands what new authors experience, and have put together a package that is the best in the business. You can’t go wrong here. Plus, they’re selective and won’t publish any manuscript just because it’s accompanied by a check. Also, the web site is well trafficked. If you can find a POD or epublisher with as much integrity and dedication to selling authors’ books, but with lower POD publishing fees, please let me know.”

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