Collecting Debt at Holiday Time
How You Can Offer Hope to
Stressed-Out Consumers
It's the time of year for festive gatherings, family dinners — and big hits to your consumer's wallet.
While there's no perfect time of year to recover debt, the holidays can be particularly stressful for American consumers. So, what's the best way to collect your receivables during the holidays?
The Holidays and Debt
Consumers whose accounts are already in collections can easily incur even more debt over the holidays. According to a recent LendingTree survey, 34% of Americans ran up more than $1,000 of debt to pay for their 2023 holiday expenses.
Sixty-five percent of the survey respondents who incurred holiday debt in 2023 said they hadn't expected to do so, 57% said they were stressed about the debt, and 40% were plagued with buyer's remorse.
Taking Care of You
Collecting debt from stressed-out consumers can be emotionally draining during the holidays. You’ll be better equipped to offer them compassionate and effective support if you effectively manage your own stress first.
Here are some basic tips to minimize stress and maintain mental wellbeing:
- Eat a balanced diet and stay hydrated.
- Engage in regular exercise.
- Get a minimum of eight hours of sleep each night.
- Practice mindfulness, deep breathing, or other relaxation techniques.
- Take frequent short (e.g., five-minute) breaks to stretch or walk around during the day. (Changing your environment, even briefly, helps your brain rest and switch gears.)
Similarly, a 2023 American Psychological Association (APA) poll found that almost 90% of U.S. adults feel overwhelmed by the holiday season. Financial issues were the primary holiday stressors, with 58% of the respondents stating that monetary concerns caused them the most anxiety.
Overall, 63% of American adults polled by the APA used negative words, such as "overwhelming" or "exhausting," to describe the holiday season.
Additional stressors can compound the problem. For some consumers, for instance, the holidays are a painful reminder of loss due to death or estrangement.
Others suffer from loneliness and depression (such as Seasonal Affective Disorder) at this time of year or dread anticipated family conflict. In addition, holiday pressure can weigh especially heavily on women, who feel they are expected to create magical (and costly) experiences for their families.
As a creditor or collector, you must be sensitive to these feelings when attempting to collect receivables at holiday time.
Keep a Cool Head
You can set the tone for your collections calls even before contacting the consumer by maintaining a composed and confident attitude. (See sidebar, "Taking Care of You.”) A calm demeanor can help soothe an anxious debtor.
Did you know that the very act of smiling improves your disposition? It also changes the tone of your voice. Smiling raises the soft palate at the back of your mouth, resulting in more fluid sound waves, making your voice sound warm, friendly, and receptive.
It’s a good idea to keep a mirror near your desk and periodically check your reflection during a collections call. Do you look tired or irritated? That will be conveyed in your voice!
If the consumer becomes emotional or angry during the course of the call, recognize that his financial fears may be exacerbated by holiday stress. Allow him to vent and listen without speaking so you can help steer the conversation in a positive direction.
Remain Flexible
Be sure to have flexible payment options available to present to your consumer. Offering multiple options, payment plans, or other arrangements will go a long way toward satisfying your company's or client's needs while alleviating consumer anxiety. Once the consumer realizes he can feasibly pay off a debt he's been avoiding, he'll begin to feel relief.
Although you may feel pressure to wrap up overdue accounts before the end of the year, remember to be patient and recognize that not everyone will be able to pay during the holidays. But be sure to follow up with those consumers after the New Year.
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When You Need Help
Business owners, healthcare providers, and property managers deserve a happy holiday, too.
As the year draws to a close and you reassess your accounts receivable practices, you may find collecting on overdue accounts is more than you can handle on your own. If so, it's time to let the CBSI professionals carry the debt collection burden for you. We can recover what's owed to you while remaining sensitive to the various holiday stressors your consumers are struggling with.
And THAT can mean a happier holiday for everyone!
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Featured Image: Adobe, License Granted
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