Am I too stubborn?
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Am I too stubborn?
I recently went to my local flying club to renew my membership and was stunned to learn that if I was to part with the wad of cash that I had in my pocket for a full years membership I would be obliged to pay a full 10% MORE than if I were to pay by direct debit.
I really can't get my head around this.
I run a business and am quite used to getting a DISCOUNT if I pay in advance and especially in cash, rather than being penalised.
Surely any business would prefer to have the cash in the bank rather than a future promise of that cash?
Suppose I were to drop dead tomorrow?
If the club had accepted my cash do you think my estate would be looking for a partial refund? No. The club's got my money and thanks very much.
However, if I've opted to pay by direct debit, the club gets no more money.
Also, I really object to handing people or businesses access to my bank account. I know of more than a few instances where way too much money has been extracted from an individual's bank account (£3000 in one case and it took 2 years to get it back). I just want to hand over some money and forget about it until next year. What's so difficult about it?
I would consider paying by standing order as this allows me to retain control, but this is not an option. (Actually I confess to not having actually asked this question directly so maybe that is an option, but....)
I was told that the extra 10% was to "cover administration costs".
What admin costs?
If I hand them a cheque (which they treat the same as cash) they still have to present it in the same way that they'll have to present my direct debit mandate. So what extra costs are there?
Perhaps I'm being a little stubborn, but I am seriously considering not renewing my membership as a matter of principle.
When I joined this club last year I raised the same issue and the enterprising CFI offered to discount some instruction by the same amount in order to secure my membership, but I resent having to rely on the good will of this one individual.
I know that £30 (the value of the 10%) is small change but if someone asked you to take £30 out of your pocket and tear it up, would you do it?
It's a shame because the club/airfield is fantastic and I really would like to remain a member, but my access to aircraft is not restricted to my membership of this club.
I really can't get my head around this.
I run a business and am quite used to getting a DISCOUNT if I pay in advance and especially in cash, rather than being penalised.
Surely any business would prefer to have the cash in the bank rather than a future promise of that cash?
Suppose I were to drop dead tomorrow?
If the club had accepted my cash do you think my estate would be looking for a partial refund? No. The club's got my money and thanks very much.
However, if I've opted to pay by direct debit, the club gets no more money.
Also, I really object to handing people or businesses access to my bank account. I know of more than a few instances where way too much money has been extracted from an individual's bank account (£3000 in one case and it took 2 years to get it back). I just want to hand over some money and forget about it until next year. What's so difficult about it?
I would consider paying by standing order as this allows me to retain control, but this is not an option. (Actually I confess to not having actually asked this question directly so maybe that is an option, but....)
I was told that the extra 10% was to "cover administration costs".
What admin costs?
If I hand them a cheque (which they treat the same as cash) they still have to present it in the same way that they'll have to present my direct debit mandate. So what extra costs are there?
Perhaps I'm being a little stubborn, but I am seriously considering not renewing my membership as a matter of principle.
When I joined this club last year I raised the same issue and the enterprising CFI offered to discount some instruction by the same amount in order to secure my membership, but I resent having to rely on the good will of this one individual.
I know that £30 (the value of the 10%) is small change but if someone asked you to take £30 out of your pocket and tear it up, would you do it?
It's a shame because the club/airfield is fantastic and I really would like to remain a member, but my access to aircraft is not restricted to my membership of this club.
Ich bin ein Prooner.
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If I were a member at this club, I would be very inclined to recoup my 10% by way of stirring up a lot of feeling against this dubious practise and doing what I could to get the person(s) who thought this one up removed from the committee.
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Stubborness is (or can be) a fine aeronautical tradition!
If Orville & Wilbur or Lindbergh hadn't been stubborn, where would we all be?
"PAY THE MAN AND DAMN HIS IMPUDENCE!" (Blackadder)
If Orville & Wilbur or Lindbergh hadn't been stubborn, where would we all be?
"PAY THE MAN AND DAMN HIS IMPUDENCE!" (Blackadder)
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In defence of clubs in general...
Most clubs that I know have no or virtually no paid staff. All work is done by volunteers. The treasurer may not be a career treasurer, may not have a treasurers education, and the contracts/facilities with their bank account may be limited, either because they tried to obtain the cheapest service from the bank, or because of the limited treasurers knowledge.
Also, different forms of payment require different ways of keeping records and one method may involve more steps and people than another.
Furthermore, most clubs live in shacks at airfields where it's not a good idea to keep large amounts of cash overnight. So all the cash has to be taken home, or deposited in the bank each day. And even then, cash is almost impossible to insure.
All of this may lead to a preferred method of payment of your annual membership fee, with either an incentive (discount) for paying in the correct fashion, or a punishment (uplift) for paying in a non-preferred way. I don't think it's entirely fair to call that punishment the "administration fee" since the volunteer works for free, but I can understand that that term causes the least amount of discussion.
From my personal experience as volunteer treasurer (in several non-aviation related clubs), a direct debit mandate (or whatever that's called in the UK) is by far the easiest method of payment. Sure, as the treasurer you've got to input the direct debit mandate details into the computer once, but from that point on you can process 100s of invoices in literally a second. And I don't know how things work in the UK, but in the Netherlands you are only required to keep the signed mandate on file, but you don't have to present these signed mandates to your bank beforehand. Furthermore, it's impossible for the invoiced people to forget or "forget" to pay the invoice. The only remaining problem is a few (typically less than 1%, if you do things right) people who phone their bank claiming the transaction was improper, so it's rolled back. So for ease of use, a direct debit mandate is the best option for invoicing anything, from the treasurers point of view.
Cash, on the other hand, is the worst option. The trouble with cash, in addition to miscalculation/theft issues, is that it doesn't *automatically* generate an audit trail, like a direct debit mandate, or a credit card/debit card payment, or a bank transfer does. So there is extra work in creating this audit trail. And obviously, without a proper audit trail your administration breaks down, and there is an opportunity for dishonest people to skim off cash without anybody knowing what happened.
In the clubs I was treasurer for, I completely abolished the use of cash. Which made things really easy since *all* transactions were done via a single bank account, so the bank statements were all I needed to keep as underlying records for my ledger. But these were the types of clubs where this was possible, fortunately, and I appreciate that not all clubs are able to abolish cash altogether.
Noah, I challenge you to become a volunteer treasurer for a medium-sized club of any sort (say along the lines of 100-300 members) for a year or three, and then see if you still support that statement you just made.
Being a treasurer, volunteer or paid, is not a high-glamour job. You never get a compliment if your books are in order. Instead, you get to deal with the **** (insert your favourite synonym for excrement here) if people refuse payment for some reason or another. If you make a mistake, the whole club suffers. And even if everything is going smoothly, it's a heck of a lot of work, at least a few hours every week. Which, obviously, nobody notices.
And if you then have a few people at the annual club meeting who start "stirring up a lot of feeling" with the aim to "remove you from the committee", the fun of being the treasurer wears off rather quickly.
I once heard an analogy which sums up the situation rather well, IMHO. In every club, there's 10% people who are pulling the cart forwards, 80% people who are sitting in the cart along for the ride, and 10% trying to pull the cart back. In which group are you?
Most clubs that I know have no or virtually no paid staff. All work is done by volunteers. The treasurer may not be a career treasurer, may not have a treasurers education, and the contracts/facilities with their bank account may be limited, either because they tried to obtain the cheapest service from the bank, or because of the limited treasurers knowledge.
Also, different forms of payment require different ways of keeping records and one method may involve more steps and people than another.
Furthermore, most clubs live in shacks at airfields where it's not a good idea to keep large amounts of cash overnight. So all the cash has to be taken home, or deposited in the bank each day. And even then, cash is almost impossible to insure.
All of this may lead to a preferred method of payment of your annual membership fee, with either an incentive (discount) for paying in the correct fashion, or a punishment (uplift) for paying in a non-preferred way. I don't think it's entirely fair to call that punishment the "administration fee" since the volunteer works for free, but I can understand that that term causes the least amount of discussion.
From my personal experience as volunteer treasurer (in several non-aviation related clubs), a direct debit mandate (or whatever that's called in the UK) is by far the easiest method of payment. Sure, as the treasurer you've got to input the direct debit mandate details into the computer once, but from that point on you can process 100s of invoices in literally a second. And I don't know how things work in the UK, but in the Netherlands you are only required to keep the signed mandate on file, but you don't have to present these signed mandates to your bank beforehand. Furthermore, it's impossible for the invoiced people to forget or "forget" to pay the invoice. The only remaining problem is a few (typically less than 1%, if you do things right) people who phone their bank claiming the transaction was improper, so it's rolled back. So for ease of use, a direct debit mandate is the best option for invoicing anything, from the treasurers point of view.
Cash, on the other hand, is the worst option. The trouble with cash, in addition to miscalculation/theft issues, is that it doesn't *automatically* generate an audit trail, like a direct debit mandate, or a credit card/debit card payment, or a bank transfer does. So there is extra work in creating this audit trail. And obviously, without a proper audit trail your administration breaks down, and there is an opportunity for dishonest people to skim off cash without anybody knowing what happened.
In the clubs I was treasurer for, I completely abolished the use of cash. Which made things really easy since *all* transactions were done via a single bank account, so the bank statements were all I needed to keep as underlying records for my ledger. But these were the types of clubs where this was possible, fortunately, and I appreciate that not all clubs are able to abolish cash altogether.
If I were a member at this club, I would be very inclined to recoup my 10% by way of stirring up a lot of feeling against this dubious practise and doing what I could to get the person(s) who thought this one up removed from the committee.
Being a treasurer, volunteer or paid, is not a high-glamour job. You never get a compliment if your books are in order. Instead, you get to deal with the **** (insert your favourite synonym for excrement here) if people refuse payment for some reason or another. If you make a mistake, the whole club suffers. And even if everything is going smoothly, it's a heck of a lot of work, at least a few hours every week. Which, obviously, nobody notices.
And if you then have a few people at the annual club meeting who start "stirring up a lot of feeling" with the aim to "remove you from the committee", the fun of being the treasurer wears off rather quickly.
I once heard an analogy which sums up the situation rather well, IMHO. In every club, there's 10% people who are pulling the cart forwards, 80% people who are sitting in the cart along for the ride, and 10% trying to pull the cart back. In which group are you?
Last edited by BackPacker; 3rd May 2010 at 15:44.
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Thank you Backpacker for an interesting contribution.
However, this club has over 1000 members and really ought to be able to manage whatever income streams are presented without that task becoming too onerous.
The same penalty would apply for example, were I to pay by debit card (but cash is my preferred means of payment since I have it in my pocket) which completely removes any obstacles such as those you have outlined.
In the club where you banned cash, does that mean that if I wanted to hire one of your aeroplanes for 10 hours you would not accept payment in cash?
However, this club has over 1000 members and really ought to be able to manage whatever income streams are presented without that task becoming too onerous.
The same penalty would apply for example, were I to pay by debit card (but cash is my preferred means of payment since I have it in my pocket) which completely removes any obstacles such as those you have outlined.
In the club where you banned cash, does that mean that if I wanted to hire one of your aeroplanes for 10 hours you would not accept payment in cash?
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In the club where you banned cash, does that mean that if I wanted to hire one of your aeroplanes for 10 hours you would not accept payment in cash?
I agree that a 1000-member club, particularly a flying club where members pay for flying time in addition to an annual membership fee, should have a (semi-)professional accounting department with the ability to accept cash for any type of payment. But I do maintain that cash transactions are inherently more complicated for any type of business than bank transfers of some sort. Unless you're a shop and you don't have to record who paid you the money or what it was for.
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For what it is worth, in Canada, cash is legal tender, and by law (with some minor exclusions about coins, or huge denominations for small payments) must be accepted for payment of debts public and private. It is not permitted that you be surcharged for paying in cash, or that it not be accepted. The advertised price is the price, and you can pay it in cash if you want. Any other form of payment is subject to acceptance and agreement of terms.
When I do business, I speak with my money. Only businesses (and a club is still a business) who show evidence of wanting, and being willing to earn my business, on reasonable terms, get my money... Maybe this club is not for you...
When I do business, I speak with my money. Only businesses (and a club is still a business) who show evidence of wanting, and being willing to earn my business, on reasonable terms, get my money... Maybe this club is not for you...
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in Canada, cash is legal tender, and by law (with some minor exclusions about coins, or huge denominations for small payments) must be accepted for payment of debts public and private. It is not permitted that you be surcharged for paying in cash, or that it not be accepted. The advertised price is the price, and you can pay it in cash if you want.
Question though. If you say that you may not be surcharged for paying in cash, is it legal to give a discount if somebody pays not in cash but otherwise?
Because psychologically speaking, in any environment I would rather reward people by giving them a discount, than by punishing them by giving them a surcharge. Although I have to admit that I would raise my prices first so that at the end the amounts come out equal. And in a competitive environment, that may be a problem too.
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I am very wary of diredt debit since the aviation insurance broker with whom I insured my 172 tried to extract £29,000 from my account for the insurance of a commercial jet!
Needless to say my bank bounced the debit - and I later received an apology and payment of bank charges for the error. It's just as well I had not set up the debit through my business account otherwise I would have had one heck of a shock to see such a large debit and would have wondered whether the company secratary (wife) had gone on a spending spree!
Needless to say my bank bounced the debit - and I later received an apology and payment of bank charges for the error. It's just as well I had not set up the debit through my business account otherwise I would have had one heck of a shock to see such a large debit and would have wondered whether the company secratary (wife) had gone on a spending spree!
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That just proves the point, doesn't it? The fact that Canada feels the need to pass a law that cash is legal tender and should be accepted, shows that a lot of businesses would rather have you pay in a different way, and would maybe refuse cash if they could (legally and practically).
Question though. If you say that you may not be surcharged for paying in cash, is it legal to give a discount if somebody pays not in cash but otherwise?
Question though. If you say that you may not be surcharged for paying in cash, is it legal to give a discount if somebody pays not in cash but otherwise?
I suspect the interpretation in Canada would be that whatever the lowest agreed price would be, you are free to pay it in cash if that is your choice.
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Certainly, DD payment needs less admin.
Another charitable explanation for a DD discount is that a club member is more likely to stay the term (because the payment has to be specifically cancelled, rather than specifically actioned which always feels more painful
).
But a 10% discount is HUGE for an organisation where a default on the payment can instantly stop delivery of the service. My electricity supplier offers a 6% discount for a DD payment but that is with every month having an equal payment, which helps people who are too stupid to add up their expenditure or to read their meter, and I know (from an ex GF who used to work in SEEBOARD debt collection) that these utilities deal with many thousands of professionally instructed bad debtors, who know precisely the legal game; they wait till the man comes to disconnect and then they give him £1 (or £10?) and he has to go away for X months, and the process repeats basically for ever. The mounting bills are never paid. For these utilities, a 6% discount is sensible and translates directly into a saving on the cost of running another (almost universally hated) call centre in India.
But a business with 1k members can have a full time person running it, with accounting software, etc. I have about 1k customers in my business, so I know what that involves. Not a lot, with a 10 year old version of Sage A 10% discount would wipe out a large chunk of the margin of any normal business.
The other thing is that many aviation businesses are run by crooks, have an MTBF of about 2-3 years, and a DD in the hands of one of these is a great idea. Probably the most common scam run on consumers has to be the "difficulty" of stopping direct debits. Google on any of the cheap broadband providers for tons of examples.
Another charitable explanation for a DD discount is that a club member is more likely to stay the term (because the payment has to be specifically cancelled, rather than specifically actioned which always feels more painful
).But a 10% discount is HUGE for an organisation where a default on the payment can instantly stop delivery of the service. My electricity supplier offers a 6% discount for a DD payment but that is with every month having an equal payment, which helps people who are too stupid to add up their expenditure or to read their meter, and I know (from an ex GF who used to work in SEEBOARD debt collection) that these utilities deal with many thousands of professionally instructed bad debtors, who know precisely the legal game; they wait till the man comes to disconnect and then they give him £1 (or £10?) and he has to go away for X months, and the process repeats basically for ever. The mounting bills are never paid. For these utilities, a 6% discount is sensible and translates directly into a saving on the cost of running another (almost universally hated) call centre in India.
But a business with 1k members can have a full time person running it, with accounting software, etc. I have about 1k customers in my business, so I know what that involves. Not a lot, with a 10 year old version of Sage
A 10% discount would wipe out a large chunk of the margin of any normal business.The other thing is that many aviation businesses are run by crooks, have an MTBF of about 2-3 years, and a DD in the hands of one of these is a great idea. Probably the most common scam run on consumers has to be the "difficulty" of stopping direct debits. Google on any of the cheap broadband providers for tons of examples.
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The answer, surely to goodness, is blindingly obvious, and this practice is hardly unique to flying clubs.
Someone who pays by direct debit is likely to let it running year after year. Someone who pays cash is likely to not bother to renew.
It really is as as simple as that.
If you don't like the direct debit, pay the cash. Your choice. You have nothing to complain about.
Someone who pays by direct debit is likely to let it running year after year. Someone who pays cash is likely to not bother to renew.
It really is as as simple as that.
If you don't like the direct debit, pay the cash. Your choice. You have nothing to complain about.
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The Curse of the Dismal Science
This really is a no brainer and I cannot understand the fire and passion on this one.
1) It is less work and admin for the club and hence reduces costs.
2) Handling Cash creates additional problems and risks.
3) More reliable future membership income makes planning and investment less risky (which is beneficial to members)
4) Banks and other Creditors will look more favourably on continued/further investment.
5) As Gertrude clearly pointed out their lifetime income from any one individual is likely to increase.
In conclusion every Club should offer a significant discount to members signing up with a Direct Debit.
If they don't they are increasing the risk of business failure for absolutely no possible gain.
Whether you are happy about this is another matter. And I do agree that letting others have access to deduct variable (by them) ammounts of money is disturbing.
But you cannot beat Economics
1) It is less work and admin for the club and hence reduces costs.
2) Handling Cash creates additional problems and risks.
3) More reliable future membership income makes planning and investment less risky (which is beneficial to members)
4) Banks and other Creditors will look more favourably on continued/further investment.
5) As Gertrude clearly pointed out their lifetime income from any one individual is likely to increase.
In conclusion every Club should offer a significant discount to members signing up with a Direct Debit.
If they don't they are increasing the risk of business failure for absolutely no possible gain.
Whether you are happy about this is another matter. And I do agree that letting others have access to deduct variable (by them) ammounts of money is disturbing.
But you cannot beat Economics