Originally published on June 19, 2009.
One of my daily chores is to pay my distributor bills. This involves sitting down with a big check book, writing actual checks (today’s are $26.68, $45.00, and $400), addressing actual envelopes, and affixing them with actual stamps. Then the challenge is remembering to take them out of my bag and put them in an actual mailbox at some point during the day (because this is New York and no one has an actual mailbox of their own to put letters in for postpeople to pick up.)
Now I can already hear some of you asking, “Why don’t you just do this electronically. It seems a little silly to be wasting real checks and real stamps when you can just pay your bills electronically.”
And I would answer that yes, it’s a little silly, but that’s just the way it is in the wild world of New York wine.
“Why’s that?” you ask. (Even if you don’t ask, I’m going to tell you.)
In New York, as everywhere, wine sales are highly regulated by the state. In the case of payment terms, every retailer and restaurateur is given 30 day terms. So if the wine is delivered on June 1st, the distributor has to get your check for that delivery by July 1st. If they don’t get it by that day, there’s a 5 day grace period and then the distributor has to report you to the State. (The “State” being the State Liquor Authority, aka the SLA). Not unlike in high school, you’re put on the delinquent list. And detention takes the form of COD status – Cash on Delivery.
COD status means big, busy truck drivers will stand in your store, tapping their feet, waiting for you to write a check before giving you your wine. (Or something like that…I’ve never actually given one of them a check.) And you’re not on COD status for just the one distributor. You’re on COD status for EVERYONE!
This is a very bad thing because paying for your wine the day it’s delivered is a much different situation that paying for it 30 days later (when you’ve had an entire month to sell it and get the cash to pay for it.) So nobody likes to be on COD.
But nobody wants to pay their bills before they have to. I don’t want the distributor to get my cash one day before it’s due. In some cases I don’t have it the day before it’s due, but generally, I’m just inclined to want to keep my money in the bank as long as possible.
So back to why I’m still using checks, stamps, envelopes rather than a snazzy electronic payment system.
Well, only 1 of the approximately 50 distributors I work with offers any sort of automated payment system. And it’s not really automated – I have to call the customer service line, listen to at least 5 minutes of inane music and canned liquor commercials, give them a check number, invoice number, and check amount.
But I can still use my bank’s automated payment system right? Which I started to do once I had started to build a little bit of cash in the bank. It was great – I’d just go online, set everything up and revel in no more stamps! No more envelopes! No more last minute treks to the post office because it took me 3 days to remember to take the envelopes out of my purse! Great!!!!
Not so much. Almost immediately, I started getting calls from my distributors asking where my usually timely checks were. I was about to become a delinquent!
With a little investigation, I learned that the automated payment process isn’t so automated. I was really just “automatically” asking my bank to have someone stick a check in an envelope and mail it from somewhere else. And this somewhere else was in Nebraska. And sometimes it could take up to 5 days to get the check into an envelope. And then another 5 days for the envelope to get to the distributor in New York. So 10 days total. And of course, the bank takes the money out of my account the day I process the payment, 10 days earlier.
Bottom line, I would have to pay my bills at least 10 days before their due date, hope nothing goes wrong in Nebraska (mad cow stampede?), and still could possibly wind up reported as a delinquent to every distributor in the state. And even worse – I would be a delinquent for non-payment of money that had already been removed from my account!!
I think I’ll stick to stamps.