Personal Finance, Relationships

Should Customers Be Billed on What They Can Pay?

I may have written about my dad in the past. Dad is a retired dentist. He grew up during the Depression, barely got through high school while he worked multiple jobs to support his family and joined the Navy at age 17 during World War II. My Dad was truly part of the “Greatest Generation.”

After completing his naval service, Dad went back to school. Not college. He went back to prep school. He was 21 years old, taking 7th and 8th grade classes. After two years of preparation, he attended St. Michael’s College where he was consistently on the Dean’s List. After college and a year of work, he went on to dental school where he thrived.

Throughout my Dad’s career, he never forgot about the hard work that he had to put in to his future. He also never forgot about the lucky breaks that he received and the people who helped him along the way. His own father died before my Dad had even turned 19, he had supported his sick father, his mother and his two sisters for a time when he was 12. He held any job he could get from the age of 5. He never gave in to poverty itself or to the oppression of poverty. He also never gave in to bitterness.

By the time I was born, my Dad already had a thriving dental practice in a suburb of Boston. I was a blessing because my parents had lost two children before I was born. Two years later, my brother was born without functioning kidneys. That resulted in 6 years in the hospital until he was old enough for a transplant, with a donated kidney that he received from my Dad. Still my Dad was never bitter.

My dad continued to work hard despite all of the tragedy and hardship, but he never passed that hardship on to anyone else. Every month I would hear my dad tell my mom (who always handled his billing) that she should not bill patients because “they were going through a hard time” or that she not bill other patients because “so and so is in the hospital.”

While most businesses are run on the principle that money should be paid for services rendered, Dad operated under the principle that we are all part of the same community and that those who are suffering should be helped. And help is what he did.

Despite his magnanimous ways, my dad still had many patients who complained about his fees. They just did not realize what a good deal they were getting. When my dad retired, he sold his practice to a dentist who raised the fees to the going rate at the time — triple what my dad was charging. Only then did my dad’s patients realize what a deal they had been getting.

Perhaps my dad was on to something. If we all looked at our clients and customers, and helped them out where possible, they should become better customers. Certainly, we will become better people. If you identified the neediest customers each month and did not bill them, or gave them extra services for free or a discount, do you think it would be devastating for you? What if we all tried to help the people who we encounter each day? Wouldn’t that help more people to become loyal customers over time?

I don’t think that is why my dad was so generous when he was in practice. That was just his nature. It still is. Nevertheless, he very rarely ever lost a patient to another dentist and mom was always able to collect more than 99.5% of the bills she sent out. Can you claim as much with your business?

What do you think, if we all tried to bill our clients and customers based on what they could pay instead of what they should pay, would it be better for all of us? Should businesses invest in the emotional health of customers and clients? I think so. What do you think?

11 thoughts on “Should Customers Be Billed on What They Can Pay?

  1. My dad held/holds a similar philosophy. He grew up poor. Later, when he had a thriving small-town business selling shoes, he would frequently take items for trade rather than cash from folks who needed a little financial help. For example, he once took a baby lamb on trade for a pair of work boots. We played with the lamb for a week or so, then he took it to the livestock auction and sold it.

    I remember another time he held a contest (quite common for stores to do in the 60s and 70s), the prize being a free bicycle. He “rigged” the contest so that a family with many children and few dollars won the contest. I suppose some would consider that unfair, but I’ve never seen it that way.

    I know there were debts he never collected, and that he allowed some people to buy their shoes and boots on credit when he knew they were unable to pay. Yet his business thrived during those years and were in fact the best years of my parents’ lives, financially.

    It wasn’t his compassionate business practices that eventually led to the closing of his store. That happened when the town grew large enough for the chain stores to move in.

  2. “Socialism has proved one of the most popular and persistent political and economic philosophies of the last hundred-odd years. A pity then that it doesn’t work.” quoted from Philip Thomas

  3. My father had a solo ophthalmic practice in a small town of 25,000 for many years. Because he was the only eye doctor between two large cities which were two hours apart, he had quite a “drawing area”, much of which was rural. He had patients who would bring him wonderful fresh produce during the summer months, and he would reduce their fees or not charge for them at all. This allowed them to maintain their dignity and still receive the medical treatment they needed. I have a girlfriend who is a small town attorney, and she has at least one client she will see anytime, as long as he brings her a basket of berries. In either case, both parties benefit.

  4. I think that what your father did and other people have mentioned here is something we’ve lost sight of — a sense of community and a helping hand.

    None of these customers expected to get something for free but were willing to do what they could in appreciation of the services they provided.

    The woodcarvers I’ve hung out with are big on carving canes for wounded vets, carving and auctioning their carvings for a member of the community who had cancer (and no insurance), donating carved Christmas ornaments for an annual hospital auction, etc., etc. I had a staff member whose mother needed to use a cane and wanted something special for her to use and admit that I cut my rate a lot when I did hers ’cause I knew she didn’t have a lot of money.

    When you’re dealing with strangers, it’s not as possible to do things like that but, when you know the people involved, it feels good and right!

  5. I find that people who really need help wont ask for it
    and those that get help all the time know how to get their way

    I like to help working class people when i can,in my line of work i deal with a lot of dishonest people so it has hardened my heart quite a bit ,but I get joy from helping those that really need help

    i have always wondered how someone could look at someone with a horrible tooth ache and send them away with no treatment the way dentist do

  6. Mr. Jones — Socialism is a political philosophy. I believe David is proposing the concept of charitable humanity. Do you have any objection to voluntary charitable behaviour?

  7. Voluntary charitable actions are great, particularly voluntary cooperative charity by groups. Enforced charitable action, or enforced wealth redistribution, is against freedom.

  8. This seems like a great philosophy/practice for a small business like your dad’s, but I don’t think it would work well for a large company. Without the personal connection, the company would not know which customers were in need, nor would it be able to trust those customers who claimed to be in need because if everyone knew about the company’s policy, some people would take advantage of their generosity. It’s too bad that we don’t have more small businesses these days that could practice such a charitable philosophy. Of course, lots of large corporations donate money to the community, but this is a much more indirect form of assistance and probably harder to obtain.

  9. Amy F. — I agree that large corporations could not give the “local” charitable deals that smaller businesses can offer. That said, I doubt many large corporations are reading my articles, either. If you read back to my previous article this month, you will note that I also make a pitch for shopping at Mom and Pop establishments. This article grew out of my development of the previous article . . . . just more of the symbiosis that we can find in local shopping!

  10. I don’t believe that one’s means should dictate what one pays. The wealthy should not pay more (or full freight) just because they can afford it. In many cases, poverty is self-imposed. This is not to say that charity has no place in business, but it is extremely difficult to tell the difference between someone who couldn’t afford an essential service (i.e. medical care) under any circumstances, and someone who could afford it if they simply readjusted his/her budget accordingly.

  11. I think what your dad did was wonderful! If a business person can do such a thing it is wonderful also. What is hard is going to the doctor with no insurance, making sure the doctor knows this and then instead of prescribing the cheapest medication they prescribe the newest most expensive on the market. In otherwords being totally oblivious to the patients needs. My hubby has no health insurance and I’m on Medicare, we don’t ask for discounts or freebies, but we do ask the doctors to recognize that we can’t afford the pricey solutions.

    Prior to going to the dentist my husband called to check on prices and was told an X-ray would be $25. He came home with a bill for $100 for the X-ray and several hundred for fillings, plus the dentist wanted him back for another $700 worth of work. It became a fiasco especially considering the filling he put in weren’t done right. But very sad that a dentist wouldn’t take the time to be honest and compassionate. I was told years ago I needed a crown at the cost of $450 which I didn’t have. Eventually I found a dentist that did the filling for around $50 and it is still secure doing what it is supposed to and saved me hundreds of dollars that I don’t have.

    I guess what I’m saying is even if a business person can’t/doesn’t want to give discounts they should work with their customer is possible to help them achieve the cheapest solution to their problem if at all possible. I’m especially thinking of healthcare providers at this point. Most businesses are in business to make money and so they don’t want to offer a cheaper solution, but when it comes to healthcare you are trapped as there is no list of costs of services and those without insurance are charged more than those with. How does that make sense? If you could afford insurance you would have it.

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