ProblemCustomers
When to ask for a guarantor, and when not to
Ask for a guarantor when the amount would hurt to lose, not when the customer looks poor. The three things that decide it, and four lines to write down.
Ask for a guarantor when the amount is big enough that losing it would hurt your shop, and when the customer is new or has no fixed address. For a running Rs 2,000 balance it is too much. For a Rs 40,000 plan with a man you met last month, it is ordinary business.
A guarantor is a second name, not a magic rope
A guarantor is somebody who says, in front of you, that he knows this customer and that he will help you get your money back if the customer goes quiet. That is all it is. He is a second name and a second phone number attached to a balance that would otherwise have only one.
Most shopkeepers expect too much from that. They imagine a rope tied around the customer's leg, then feel cheated when the guarantor also stops answering. He is not a court and he signed nothing at a stamp office. What he gives you is smaller than that, and still worth a great deal.
He gives you a second door. When a customer stops answering your calls, you are finished. When a customer stops answering and somebody in the same street told you six months ago that he stands behind this man, you have somewhere to knock, and the customer knows it before he ever thinks of going quiet.
That last part is the real work a guarantor does. Almost every guarantee that gets used, gets used by being mentioned once, not by being enforced.
The three things that decide whether to ask
Not every balance needs one. Asking for a guarantor on a Rs 600 tea and biscuit balance makes you look strange and makes the customer feel accused. Three things decide it, and only three.
The amount. How much of your own money is standing outside the shop with this one person? Not the price on the label, the money you actually paid your supplier for it.
How long it will stand there. Rs 20,000 coming back on Friday is a completely different risk from Rs 20,000 coming back over eight months. Time is what turns a good customer into a hard one, because life happens in between.
How findable he is. A man with a shop of his own in your bazaar is findable forever. A man on a rented room and a job that moves is not, however honest he is today.
Say: is this balance big enough to need a second name?
Example numbers, not a survey. Put your own week in: the line usually sits at about two normal weeks of what the shop clears.
Notice that the line in that box is not a moral judgement. It is arithmetic about your own shop. A shop that clears Rs 7,000 in a normal week draws its line far lower than a shop that clears Rs 70,000, and both are being sensible.
How to ask without insulting anybody
This is where most shopkeepers lose a customer they did not have to lose. The words matter more than the rule does.
The trick is to make it a rule of the shop rather than an opinion about him. Nobody argues with a rule that clearly existed before he walked in.
"Sohail, on anything above Rs 15,000 I take a second name. Same for everybody. Give me somebody from this bazaar or your street who I can call, and we start today."
Say it standing normally, in an ordinary voice, the way you would say the price of sugar. If your voice drops or you look away, he reads it as suspicion and reacts to that instead of to the rule.
Asking for a guarantor without making it personal
This works
- Name the amount first, then the rule, then the request
- Say it applies to everybody above that figure
- Ask before the price or the plan is settled
- Accept anybody from the same bazaar or street
- Keep your ordinary voice, the one you quote prices in
This loses the customer
- Ask only him, when others got credit without one
- Bring it up after the deal is already agreed
- Explain the request by pointing at his situation
- Ask in front of the queue behind him
- Drop the rule the moment he looks unhappy
One more thing that helps more than it should: ask for the guarantor before you name a discount or a plan, not after. If the guarantee comes up after the deal is agreed, it feels like a condition that appeared to spoil a good moment.
What to write down the day it is agreed
A guarantee that lives only in your memory is worth nothing on the day you need it, because that is exactly the day everyone remembers it differently. It does not need paperwork. It needs four things written where you keep the balance.
The four lines to write while he is still standing there
- 1The guarantor's full nameAs people in the bazaar actually call him, not a formal version nobody knows.
- 2His own phone numberRing it once while he is there. A number you never tested is not a number.
- 3The amount he heardSay the figure out loud so he cannot later remember a smaller one.
- 4The date, and where he can be foundA shop, a workshop, a street. One line is enough to find a man again.
- 5Read all four back to himNow it is something he heard and did not correct, not a claim you made later.
The best moment to write it is while the guarantor is still standing there. Read it back to him out loud. Then it is not a claim you made about him later, it is something he heard and did not correct, and that difference decides how the conversation goes eight months from now.
If your khata is on paper, this is one extra line under the customer's name on the first page. If it is on a phone, the guarantor's name and number sit on the customer's own page. Wasoolo, which is free to download, keeps a guarantor beside the customer for exactly this reason, so the second name is never in a different notebook from the balance it belongs to.
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The day you have to call him
Sooner or later a balance goes quiet and you reach for that second number. Do it in the right order or you will turn one problem into two.
First, try the customer properly. Three attempts across a week, at different times of day, and one visit if he is near. Calling a guarantor on day four of a late payment is the fastest way to lose both men and to be talked about badly.
Second, tell the customer you are about to call. Not as a threat, as information. "Yaseen, I have not heard from you in three weeks. I am going to ring the person whose name I took. Would you rather ring me first?" More than half of quiet balances end right there, because embarrassment moves people faster than a demand ever will.
Third, when you do ring, ask the guarantor for help, not for money. He is not required to open his own pocket, and asking him to is how a helpful man becomes an enemy. "You know Yaseen. He owes me Rs 18,000 and he is not answering. Can you get him to call me this week?" That is a request a decent person says yes to.
Keep the same calm you would use in any recovery conversation. The guarantor is not the person who owes you anything, and treating him as though he is will cost you every future guarantee in that street, because bazaars talk.
When a guarantor is the wrong answer
Sometimes the right response to a risky balance is not a second name. It is a smaller balance.
If the amount worries you enough to want a guarantor and the customer is brand new, a lower limit usually solves it better. Rs 5,000 to a stranger with no guarantee is a smaller loss than Rs 30,000 with a guarantee you may never be able to use.
For a big item, breaking the amount into a proper plan does more work than a guarantor does. A schedule of dates gives you an early warning after the first missed date, months before a lump sum would have told you anything at all. Guarantor or not, a written qist plan is the thing that shows you trouble while it is still small.
And if a customer's own family member is offered as the guarantee, be careful. A father guaranteeing a son is common and often sincere, but the two share one pocket. If that pocket goes empty, both names go quiet at the same moment, and you are back to having one name after all.
If he refuses to bring one
A refusal is information, and it is worth reading properly rather than reacting to.
Some men refuse because they are embarrassed. Asking a friend to stand behind you in your own bazaar is a hard thing for a proud man to do, and his refusal is about him, not about you. For him, offer the alternative instead: half the amount now, the rest after the first payment lands.
Some refuse because there is nobody. A man genuinely new to the city has no one to ask yet. That is honest, and it is a good reason to start him small and build up, not to shut the door.
And some refuse because they already know how this ends and want no second person watching. You will not be certain which of the three is in front of you, and you do not need to be. Give the amount you could afford to lose, and let the next three months answer it.
That is the quiet truth under all of this. A guarantor does not make a bad balance safe. He makes a reasonable balance a little safer, and he makes the customer take the date seriously. Everything else is still your judgement, made on a normal day, in a normal voice, before the goods leave the counter.
Common questions
At what amount should I start asking for a guarantor?
There is no universal number, because a fair line depends on your own shop. A workable rule is about two normal weeks of what your shop clears. Below that, a loss stings and passes. Above it, a single quiet customer starts affecting what you can buy next month, and a second name is worth the small awkwardness of asking.
Does a guarantor have to pay if the customer never does?
Not in any way you can rely on, unless you have a proper written agreement, which almost no small shop has. Treat him as somebody who can find the customer and apply gentle pressure, not as a second wallet. Shopkeepers who demand payment from a guarantor usually get nothing and lose a good name in the bazaar.
Can a family member be the guarantor?
Often yes, and a father or an elder brother carries real weight. The weakness is that close family share one income, so a bad month silences both names together. If you have the choice, a neighbour with his own shop or a steady job is stronger than a relative with the same pocket.
Should I take something in writing?
Four lines are enough: the guarantor's name, his phone number, the amount he heard, and the date. Read it back to him while he is standing there. A stamped paper is unnecessary for shop amounts and asking for one usually ends the deal, because it turns an ordinary bazaar arrangement into something that feels like a court.
The customer felt insulted when I asked. What should I have said?
Almost always the problem was that the request sounded personal. Naming the amount first fixes it: say the rule applies above a certain figure and to everybody, then ask. If he is already upset, do not withdraw the rule to calm him. Offer a smaller amount today with no guarantee instead, which keeps both the rule and the customer.
Is a guarantor useful for a plan paid in instalments?
It is the case where a second name helps most, because the money stands outside your shop for months rather than days. Take the guarantor on the day the plan is written, not later. Adding him halfway through, after a payment is missed, feels like an accusation and is usually refused.