How to deal with debtors who are not paying? Shame them

Here's one "best" practice entrepreneurs won't learn in any school: If you've tried all options and yet debtors still aren't paying, try shaming them.

Bartolome Malacura, a 70-year old sari-sari (retail) store owner in Davao, did precisely this by advertising the names of his debtors in front of his store. Believe it or not, the plan worked, said Mr. Malacura. Read on.

Shame campaign works for retail store owner
Published on page A12 of the Oct. 27, 2006 issue of the Philippine Daily Inquirer

ISLAND GARDEN CITY OF SAMAL, Davao del Norte — His neighbors owe him money from accumulated debts incurred from borrowing small stuff from his retail store. The debts were three months overdue and despite repeated demands, no payment was made.

So Bartolome Malacura, 70, did what he thought would force his neighbors to pay — shame them.

He wrote his neighbors’ names on pieces of cardboard and posted these in front of his store. Alongside the names were the items his neighbors owed — liquor, sugar, candies, money.

One placard read: “Hoy (name of the debtor) Bayari utang (Pay your debt).”

“This is just a small enterprise and still they won’t pay?” he lamented.

The biggest debt was from a certain Ube, who owed Malacura P302.50. Some debts were two years old.

Malacura said the shame campaign worked. From P2,000, the total amount of unpaid debts went down to P900.

The names of those who paid were removed from the posters. And the ordeal taught Malacura a lesson in retailing: “I won’t lend anymore. Let them be angry with me.” Dennis Jay Santos, Inquirer Mindanao

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Discuss this and other issues related to managing a sari-sari store in the Starting a Sari-Sari Store thread in the PMT Forum.

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