Rock’s Rants: “Cash Sale” in Parts

by Ken Rock

This is such a pervasive problem. At almost every dealership I visit, as I sit in the accounting office going through parts invoices, I notice that half of the invoices have the words ‘cash sale’ as customer.

If you ask the parts people why there are so many ‘cash sale’ invoices, the typical response is “I don’t have time,” “we’re too busy,” or “They’re just buying one part, we’ll never see them again.”

I wonder how they know they’ll never see that customer again. Did they ask the customer where they live? One thing’s for certain, with cash sale written on the invoice, there’s no way to know where that customer lives or if they might ever come back in.

Parts customers are your customers, every bit as much as service and sales customers are your customers. Most dealers pay a lot of money to outside agencies to mine their data so they can market to their customers. I’m no marketing expert, but I’m guessing that response rates to a postcard campaign mailed to ‘cash sale’ are pretty low.

Another reason ‘cash sale’ invoices are bad is because they can cause problems when the customer wants to return a part. Just because your policy states that you must have a receipt to return an item, doesn’t make it a good idea.

What happens if the Mr. Cash Sale wants to return his part but doesn’t have his receipt with him? Is he out of luck? That’s not the definition of good customer service.

On the other hand, if you take the time to write down a customer’s name, address and phone number every time you sell a part, that customer is in the system. All he has to do is give his name or phone number, and you have a record of his purchase, and you can happily give him his refund.

Sorry but I just don’t buy the excuse that parts employees are so busy they can’t take one minute to enter in a name, address and phone number. The customer certainly doesn’t mind. We’re all used to going to retail establishments and providing our names, phone numbers and email addresses when we purchase items. Why should it be any different in a car dealership?

Unfortunately, every dealership management system (DMS) makes it easy to set up a customer called ‘cash sale,’ which means that the dealer and/or parts manager has to get involved to create and enforce a policy to stop this behavior.

If it were me, I’d have a zero-tolerance policy, meaning 0% of parts invoices should have ‘cash sale’ as customer. If you’re a really nice guy, you could set the parameter at 1% to 5%.

If you don’t think this is a problem, take a look at the last invoice from your marketing agency. How much money are you paying them to mine for customers, and to purchase third-party lists? Now count up all the ‘cash sale’ parts invoices from last year. How many customers did you lose the opportunity to market to?

Just because a person comes in to buy a part doesn’t mean you’ll never see them again. You never know, that person might have a friend or family member who’s looking for a vehicle. But one thing’s for sure: you’ll really never know if you keep allowing your parts staff to get away with writing ‘cash sale’ on half your parts invoices.