Write your shop's udhaar rules down once

Write eight short answers on one page: who may open a khata, the first limit, how long a balance may run, what happens at the limit, what is always cash, when a limit rises, who else may say yes, and how you handle exceptions. Then let the page do the refusing instead of you.

Deciding each time is what costs you money

Most shopkeepers have rules. The rules just live in their head, and a rule in your head changes shape depending on who is standing in front of you, how the morning went, and whether the man's father is watching.

That is not a character weakness. It is what happens to any decision made under pressure, in public, with a queue behind it. You do not have thirty seconds to weigh a man's income, his history and your own cash position. So you give a number that feels about right, and next week you give a slightly different number to somebody in a very similar position.

The cost of that shows up in three places. Two customers in the same street with different limits and no reason either of them can see. Balances that grew because nobody set a point where they should stop. And you, personally, being the one who refuses, over and over, which is the part that wears a shopkeeper down and eventually makes him stop refusing at all.

A written rule does not make you strict. It moves the refusal off you and onto the shop, and that single move changes every difficult conversation you have at the counter.

The questions your rules must answer

Keep it to one page. A long policy is one nobody follows, including its author.

The six questions your written rules have to answer

• Who can open a khata here at all
• What a new person's first limit is
• How long a balance may stay unpaid
• What happens the day the limit is reached
• Which goods are never sold on credit
• When a limit goes up, and on what evidence
• Who in the shop may say yes besides you
• What you do when somebody asks for an exception

The eight answers do not have to be clever, they have to exist. "New khata for people from this area only, or people a regular customer brings." "First limit Rs 5,000." "Balance cleared within one month." "At the limit, nothing new until it comes down." "Cigarettes, phone top-ups and mobile accessories are cash for everybody." "Limits rise after three clean months." "Only I open a new khata." "Exceptions get one day and a written date."

Read those back and notice what they are not. They are not a judgement about anybody. That is the whole trick: a rule about the shop cannot insult a customer, and a decision about a person always can.

Write them where your helper can read them, and read them aloud to him once. Rules that only you know are not rules, they are moods, and your helper will guess at them exactly as badly as you would guess at his.

Setting a first limit that is not a guess

The first limit is where most shops go wrong, in both directions. Too high, and you have handed a stranger a month of your margin. Too low, and a good customer feels measured and goes elsewhere.

Say you want a starting limit for a new khata

What a household like his buys from you in a weekRs 2,400

A first limit at two weeks of thatRs 4,800

What losing it entirely would cost your shopRs 4,800

Your own margin on those goods, roughlyRs 620

Weeks of his normal buying to earn that loss backAbout 8 weeks

So the honest question is not the limitIt is whether he stays 8 weeks

A first limit you can lose without it hurtingRs 4,800

Made-up figures, chosen to show the shape. Put your own weekly basket and your own margin in these rows and the right first limit becomes obvious.

Work it from the household, not from the person. What does a family like his buy from you in a week? Two weeks of that is a sound first limit for most small shops. It is enough to be useful, small enough that losing it once does not change your year, and it grows naturally as the relationship does.

Then look at the second half of that box, which is the part nobody does. Your margin on those goods is what you would have to earn back if the whole thing went bad. Eight weeks of his ordinary buying, in the example. That is the real question hiding behind every new khata: not "will he pay" but "will he still be my customer eight weeks from now". It is the same arithmetic that sits under how much udhaar to give and to whom, stated in weeks instead of rupees.

Write the limit on his page, where you and your helper can both see it. A limit nobody can see is not a limit, and it certainly cannot help a helper decide anything at seven in the evening.

The rules that make refusing easy

Here is the practical payoff, and it arrives the first week.

✓Let the rule refuse

• "The shop's limit on a new khata is Rs 5,000."
• "Nothing new goes on until the old balance is cleared."
• "These items are cash for everybody, no exceptions."
• "I can do it once the account comes under the limit."
• "I raise limits after three months of clean payment."

✕Do not refuse as yourself

• "I do not think you will pay me."
• "Let me see, come back tomorrow."
• "For you I will make it a little more."
• "Everybody else pays, only you delay."
• Saying nothing and writing it anyway

Every sentence in the left column is about the shop. Every sentence in the right column is about the man standing in front of you. The left ones can be said calmly, in a full shop, without anybody losing face. The right ones cannot be said at all without something being damaged, which is why most shopkeepers say nothing and write the entry anyway.

The most useful sentence of all is the one that offers a way back: "I can do it as soon as the account comes under the limit." That is not a refusal, it is a condition, and a condition gives the customer something to do. Half the time he pays something on the spot, because he came prepared for a no and got a path instead.

Say it the same way every time, to everybody. A rule applied to some people and not others is worse than no rule, because now the customers who get the rule know they are the ones you trust least. Consistency is what makes a policy safe to have.

Telling customers, without announcing a policy

You do not need a notice on the wall, and you should probably not have one. A written policy on public display invites people to look for the gaps in it.

Tell them at the natural moment instead, which is the day the khata opens. Two sentences: "The shop's limit on a new khata is Rs 5,000, and we clear it inside the month. After a few clean months I raise it." Nobody has ever been offended by that, because it is said to everybody and it comes with a promise attached.

For existing customers, say nothing at all until a rule actually applies. When the moment comes, state it as the shop's practice rather than as something new: "Beyond Rs 5,000 I keep everybody on cash until it comes down." A rule described as a rule is accepted. A rule described as a change is negotiated.

The exception is family, and it deserves its own treatment, because a relative does not hear a limit the way a customer does. Say it early, once, in private, away from the counter, and be plain that it is the shop's number and not your opinion of him. That conversation is difficult exactly once, and it is much easier than the alternative described in udhaar for family and friends.

Reviewing limits so good customers grow

Rules that never move stop being true. A limit set for a man three years ago is a limit set for a different man.

Reviewing limits once a season, in half an hour

1. 1List every khata that was paid clean throughoutPaid on or near the agreed days, no chasing, no arguments. These are your growth list.
2. 2Raise those limits by a small step, not a jumpHalf again is plenty. A doubled limit tests a customer you have not tested at that size.
3. 3List the khatas that needed chasing every timeNot the ones who were late once. The ones where late is the normal shape of the account.
4. 4Lower those limits quietly, without an announcementA limit is a number on your page. It does not need a speech, and a speech makes an enemy.
5. 5Close the khatas that have not moved in a long timeSettle, mark closed, keep the page. An open khata nobody uses is a page waiting for a mistake.
6. 6Read your own rules once and change at most oneRules that change every season are not rules. One considered change a season is plenty.

Do it once a season, in half an hour, from your own pages. Raise the limits of people who paid clean, by a small step rather than a jump. Lower the limits of people you chased every single time, and do it quietly, without a speech: a limit is a number on your page and it does not owe anybody an announcement.

Raising limits is the part shopkeepers forget, and it is where the money is. A customer whose limit grows because he paid well is a customer who has been rewarded for something you actually want more of, and it costs you nothing to give. That is a large part of what keeping regular customers really consists of.

Tell him when you raise it, in one line, and tell him why: "You have been clear every month, so I have put your limit at Rs 7,500." Ten seconds, and it does two jobs at once. It gives him something he values, and it says out loud what the shop rewards, which is the cheapest way to teach a whole street how you like to be paid.

If your khata is in an app the review is faster, because the pages sort themselves: in Wasoolo you can see each customer's balance and how his payments have actually run, rather than reconstructing it from memory. The judgement is still yours. The half hour is just shorter.

When to break your own rule

You will break it, and you should. A rule you never bend is a rule that will eventually make you refuse somebody in real trouble whom you would have helped in any other circumstance.

The trick is to break it deliberately and leave a mark. Say plainly that this is outside the shop's rule, put a date on it, and write on the page why. Illness, a death, a job that starts next week. That way the exception stays an exception instead of quietly becoming the new limit, which is exactly how a Rs 5,000 rule turns into a Rs 22,000 balance over eleven months.

Two things should almost never be exceptions. Do not break the rule for a stranger, whatever the story: a rule exists precisely for people you cannot judge. And do not break it twice for the same person, because the second exception is not an exception, it is a decision that his real limit is higher and you have simply not written it down.

The rest is judgement, and judgement is what the written rules exist to protect. Handle the ninety ordinary cases with a page, and keep your attention for the ten that are genuinely different, including the ones that need something more than a limit, such as a guarantor.

Common questions

Will customers not be offended by a limit?

Not when it is the shop's number and everybody has one. What offends people is finding out that somebody else got more, or being refused without being told the reason. A stated limit prevents both.

What should the first limit be in a small shop?

About two weeks of what a household like his normally buys from you. That is useful to him and survivable for you, which is the only test that matters at the start.

Should I write the rules on a board for everybody to see?

Better not. Tell each customer the parts that apply to him when his khata opens. A public notice invites people to argue with the wording instead of accepting the practice.

My helper gives credit past the limit when I am not there.

Write the limit on the page where he can see it, and give him one rule with no judgement in it: at or over the limit, nothing new goes on. Deciding is your job, not his, and he will be relieved to hear it.

A customer keeps asking for exceptions. How do I stop it?

Give the same answer every time and attach a condition instead of a refusal. If he asks a third time, the honest reading is that his real need is bigger than his limit, and that is a conversation to have properly rather than at the counter.

How often should limits change?

Once a season is plenty. Raise for clean payers, lower for the ones you chased every time, and change at most one of your own rules in the same sitting. Rules that move every month are not rules.