Big Store Business Methods - The Fixed Principle
( Originally Published 1912 )
The Fixed Principle
A moment's thought will make it plain that there are fixed underlying principles back of all these manifold order forms.
That principle briefly is this :
Every person having any part in a transaction must have a written record of that transaction. For example: If any controversy comes up between two departments, each department must be able to protect itself, and must have a clear record of its part in the transaction, so that the responsibility can be fixed. When the head of a department orders goods from the stock room, he keeps a carbon copy of what he ordered and when he ordered it, so that he has a clear record of his part. The head of the stock room signs a receipt for the order when it reaches him, so that the head of the department can not only prove that he made out the order, but can prove that the stock department received it.
Now when the stock room sends the goods to the department, it makes out a duplicate record, and sends it with the goods. The receiving clerk in the, department signs for their receipt. Thus, if any controversy comes up about this transaction, the head of the stock room has a receipt for the goods, showing just how many he sent, and when he sent them. Hence, there can be no controversy between the different departments, in which the responsibility cannot be fixed. If a third party has anything to do with these goods, the record must be receipted by him, so that his responsibility in the transaction can be fixed.
Eliminating the Losses
When this principle of modern business is clearly understood by every business man, little or big, it will mean the elimination of ninety per cent. of the losses arising from controversies. Such records are absolutely necessary in a big organization of any kind.
Now that we have gotten the goods into the departments and on the counters ready for sale, let us make it plain what kind of records must be kept in each department.
When you make a purchase in a big store, and the clerk writes the items in a sales-check book, it may not occur to you that the book he uses indicates at once the character of the transaction. You do not "see the machinery, nor hear the creak of the wheels."
The clerk makes out the check, you pay the money, the goods are sent, or you take them with you, and the transaction is completed. That is all you see. But back and before all of this, the merchant must decide whether to use a "One Book," a "Two Book," or "Three Book" Sales-Check System.
The One Book System
The "One Book" System comprises a single sales book, so planned that it can be used for Cash, C. 0. D. and Charge sales. Many merchants favor this system, because they think that it expedites the clerical work of the sales person, since she has only one book to handle, and only one book to find when in a rush. Furthermore, this one book is a distinct advantage when the customer changes her mind, as to how she will pay for the goods, as she often does, after the check is made out. It obviates "voiding" a check and rewriting it in another book.
The Two Book System
Some merchants, however, prefer to have one book for Cash sales and another book for Charge sales and C.O.D. sales combined. They treat C. 0. D. sales as a charge, because the money is not paid down at the time. Thus C.0.D. goods are charged until the cash is brought back by the delivery department.
A variation of the "Two Book System" is favored by some stores; namely, they have one book for cash and charge sales and a separate book for C. 0. D. sales. The reason why so many merchants favor the use of this variation, is that the store collects the money in a cash or charge transaction, while the driver collects the money on a C. O. D. transaction. Since it is the money question which is always the most important in every business transaction, many hold that there should be this dividing line in sales books.
The Three Book System
The "Three Book" System comprises three separate books—a Cash sales book, a Charge sales book, and a C. O. D. sales book.
If so many of these big store problems had not already been gradually worked out by a multitude of brilliant minds, all these questions would simply bewilder. The big stores are a growth, a gradual evolution. They have not arisen, Phoenix-like, all at once.
Triplicate Sales-Check Books
The question of lost sales checks is very exasperating, and greatly interferes with the routine of the auditing department. If a charge check is lost, there is no entry made of the sale in the bookkeeping department. The sales person or wrapper or delivery clerk is perhaps placed under suspicion, and the customer is liable to be decidedly disgruntled. All of these things are known to the merchant. That is why he spends his money so freely in trying to obviate this trouble, which means serious loss. Nevertheless, the ordinary checks are sometimes lost or destroyed.
Many department store managers have realized that there is one good solution to this problem, namely, the use of a triplicate sales book, adaptable to the one, two or three book system referred to above.
Main Advantages of Triplicate
The main advantage of the triplicate book over a duplicate book is that a carbon copy is retained in the sales book, thereby always showing a complete record of the sale. Some stores have adopted this method, but many more have in the past hesitated on account of the cumbersome mechanical features of a book of this kind and the necessity of the clerks handling carbon paper, which soiled their hands and very often was the means of soiling delicate fabrics. Besides that, in the old-style triplicate books, the tissue paper for the third copy would frequently interfere with the writing of the next check.
New Kind of Triplicate Books
However, a new kind of triplicate sales book has recently been invented, and is rapidly being adopted by the big stores.
In this new triplicate sales book, the carbon paper is never touched by the sales person. The working of the book is almost automatic. The tissue copy is stored out of sight and protected from loss or mutilation. The book is simple to manipulate, and is very popular with, sales people.
Other advantages of a triplicate sales book are: First: The tissue copy is a complete record of the transaction, and is left bound in the book.
Second: The tissue copy takes the writing on its back, but, being transparent, the writing can be easily read from the front. Since the writing is in reverse on the back of the tissue, it cannot be changed or erased.
Third: The tissue copy, being left in the book or pad, is more rapidly accessible and saves much time in tracing errors.
Fourth: There is safety and satisfaction to the management in knowing that, no matter what the emergency, they still have a complete record of the transaction.
Indeed, there are many other arguments in favor of the triplicate sales book, which space prevents stating here. It is safe to say that the use of Triplicate Sales Books will rapidly extend until they are almost universally adopted.
After you have settled on what form of Sales Checks you are going to use, you are immediately confronted with the question:
"Are the goods to be sent, or are they to be taken by the customer?"
Send or Take
In one big store in Chicago, which makes approximately fifty thousand sales per day, about 40 per cent. of the goods are delivered. Each delivery would average about two or three items to each customer making from seven thousand to ten thousand deliveries every day. Hence, you will see how important is the question of addressing those pack-ages. Indeed, it is said a delivery department can make or break a big store. This means that it can keep the store from, making the profit which it should make.
There are three methods of addressing packages. The first method is for the clerk who makes the sale to write the name and address of the customer on the sales slip. When the sales slip reaches the delivery department, a writer copies from it the name and address of the customer on to a gummed label, or on to the package itself.
The second method is to use a voucher from the sales slip. The clerk, when making the sale, writes the name and address of the purchaser in the voucher. This voucher is torn off at the counter where the sale is made and attached to the goods when sent to the delivery department, and there pasted on the packages, or, in some cases, pasted on the package by the wrapper in the department in which the goods are sold.
The third method is to have a separate address and label book. This address label is written by the clerk, who makes the sale and sends the original and the duplicate address label to the delivery department with the regular sales slip.
There are almost as many different notions in regard to address books as there are stores. Certain sections of the country have their own notions. Chicago will not use the same address book as Boston; New York has a hobby of its own ; Philadelphia exerts its right to make use of its own form of ad-dress book. All of the stores, and all of the sections are aiming at one thing, namely, to simplify and make more accurate and reliable the delivery of goods.
Like almost everything else in the world, the system in which an individual believes most sincerely is usually the system that he can make work best in his establishment.
But if you were just starting a store, and knew little about it, you would here strike an unexpected complication. A woman will go into a store and buy a package of pins, and have them sent. She thinks that is all she wants. But in passing through the furniture department, she sees a chair, and buys that, and has it sent. Then she remembers that she needs some hosiery, and has a box sent. On the way out she sees some lace which strikes her fancy, buys that, and has it sent. Imagine the delivery department ! When the pins arrive they put them on a delivery wagon ready to send. That wagon may already have a load, and start out. In a little while down comes the chair for the same address. It goes on another wagon. Then comes the hosiery, and that box goes on a third wagon. Last comes the lace. It is shoved out on a fourth wagon.