Net Terms [Overview]
Description
This card gives an overview of how Net 60 terms work for retailers at Faire.
Issue Topic
Retailer::Payments::Payment terms
Policy
- Do NOT change payment terms after order is placed: CX agents can not update the payment terms the retailer selected to check out their order. Once an order is placed, you are unable to update the payment terms.
- Locating Net Term Changes in Admin: Under a retailer's "Security Logs" tab in Admin, we are able to track any changes that have been made to a retailer's Net Terms. We are also able to see whether the Net Term adjustment was initiated by the retailer themselves, a Faire team member (CX/Risk) or if they were automatically adjusted by ou bot:
- If a retailer's payment terms were changed by a CX/Risk/Faire team member, this will show up under the security log entry under CHANGE_PAYMENT_TERM > Actor > Admin CX/Risk
- If a retailer's payment terms were changed by the retailer themselves, this will show up under the security log entry under CHANGE_PAYMENT_TERM > Actor > Retailer
- If a retailer's payment terms were changed by our bot, there will be no registered actor under the same column
- Note: Please refer to the section How do I locate net term changes in Admin? below to learn more.
Overview
Net Terms
Net 60 payment terms is a payment option Faire offers that allows retailers to order new inventory now and pay for it 60 days later. Faire offers 60 terms so retailers can buy the optimal amount of inventory for their store while managing their cash flow.
How do Net Terms work?
With 60-day payment terms, Faire covers the upfront cost of their order. When they order using this payment option, they won’t be charged for their items until 60 days after the date they placed the order. If the order takes more than 14 days to ship, their invoice will be due 60 days after the ship date instead.
Once they pay off an invoice, that amount is returned to their available 60-day payment terms, and they can continue to place more orders using this buy now, pay later structure.
If they place an order that exceeds their available payment terms, they are simply charged for the entire order once it ships.
How can retailers apply for terms?
At sign-up, eligible retailers are given an initial amount of money they can spend using 60-day payment terms. They may also be required to link their bank, point-of-sale system, or accounting system in order to help verify their eligibility.
Countries that can link their bank account via Plaid:
- United States
- United Kingdom
- Ireland
- Canada
- Spain
- Italy
- Netherlands
- France
- Germany
- Denmark
- Sweden
- Portugal
Any other countries would need to provide physical statements for terms increase requests
- Trouble uploading: If a retailer is having trouble uploading or linking their bank account to apply for terms, they can send our team three months of their business’s full bank statements. ( We can then pass this info to our risk/underwriting team )
- This macro EMAIL::RETAILER::Invoices & Payments::Underwriting Increase Credit Limit or Apply for Net 60 Terms - Bank Statements can be used when a retailer requests a credit limit increase and is unable to use Plaid or it is not available.
- ANZ Retailers: Cannot upload statements. Send this macro to all retailers in Australia.
Term Application time
Retailers can expect to hear back from Risk on a term decision in 3 -7 business days
Can Terms Change?
Faire will periodically review the initial payment terms they received when they first signed up for Faire. When making payment terms adjustments (Increasing or decreasing terms), we will take into account any changes to their business type, size, or location, as well as any payment history or trends.
Can retailers apply for an increase?
Yes, retailers can apply for a terms increase in their faire portal.
- If a retailer is rejected for an increase they will be able to reapply after 60 days of the original increase application.
Retailer didn't qualify for Terms
If a retailer did not qualify for net 60 terms, their payment will be due when the brand ships the order. Their default payment method will automatically be charged once the order is in transit.
Retailer's order was canceled. Were they charged?
If an order was “Canceled” on Faire, this means the order never was charged on faire, and the allotted terms were opened back up to be used for ordering.
Can retailer pay before Net 60 invoice due date?
Yes, Retailers can pay an invoice before their invoice is due (as long as the order has shipped) in their faire portal to open up previously used net terms.
Can a retailer switch from Net Terms to PoS?
Yes, but only if the retailer has already been approved for net terms, they are allowed to switch to “pay on shipment” terms. Sometimes retailers will request to switch from Net terms to
Payment on Shipment when the retailer wants their invoices to be charged to their card right away.
Can a retailer switch from PoS to Net Terms?
Yes, but only if they have already been qualified for net terms. If they have not yet applied for net terms or are not eligible, they are not able to switch between the two terms. If they have been approved for terms and have terms available to use, they can switch between PoS and Net terms when putting through an order. They will have the option to toggle between the two payment terms under the payment option box at their checkout.
FAILED PAYMENTS
When a payment defaults (fails), this temporarily disables the retailer's checkout and zeros out their net terms.
Failed payments will block a retailer from checking out until the payment has fully cleared. If the retailer reports that they have paid off their failed payment and is still unable to order, share the processing timeframe that may be preventing them from ordering:
- Credit Card: No processing time lapse for credit cards. Credit card payments should either complete or fail instantaneously
- ACH Bank Account: Banks may take 5-10 business days to completely process.
If the retailer has a question related to existing payment plans or how payment plans impact terms, or is interested in creating more than one active payment plan at a time, CX should triage directly to Recovery by following the steps in Escalate to Risk
Can payment terms be changed after an order has been placed?
No, CX cannot change a retailers payment terms on an order once it has been placed.
- Do NOT change payment terms after order is placed: CX agents can not update the payment terms the retailer selected to check out their order. Once an order is placed, you are unable to update the payment terms.
- Use macro: EMAIL::RETAILER::Invoices & Payments::Checked out with PoS instead of Terms
If there is an edge case in which a retailer needs to change the payment terms, CX should reach out to #account-review to make this request.
HOW DO I LOCATE NET TERM CHANGES IN ADMIN?
Under a retailer's "Security Logs" tab in Admin, we are able to track any changes that have been made to a retailer's Net Terms. We are also able to see whether the Net Term adjustment was initiated by the retailer themselves, a Faire team member (CX/Risk) or if they were automatically adjusted by ou bot:
- If a retailer's payment terms were changed by a CX/Risk/Faire team member, this will show up under the security log entry under CHANGE_PAYMENT_TERM > Actor > Admin CX/Risk Ops:
- If a retailer's payment terms were changed by the retailer themselves, this will show up under the security log entry under CHANGE_PAYMENT_TERM > Actor > Retailer:
- If a retailer's payment terms were changed by our bot, there will be no registered actor under the "Actor" section.
How can I see which payment terms it was changed to?
Under the Security Log tab in Admin, we can locate details of the payment term switch under the column "Additional Data". In the screenshot below, the payment terms were switched to Net60:
