Safelite Memo Prompts Industry Reaction, Concern
With the amendments to Safelite's Network Participation Agreement program taking affect last Thursday, leading members of the industry are still buzzing about the content of the memo, the changes and what it all means to the industry.
"We've taken quite a few calls from people who are mostly complaining about the fees. Most are not picking up on the significance of the 30-day deadline. A few did, but most are complaining about the fees," said Marc Anderson, executive director of the Independent Glass Association (IGA), who spoke with glassBYTES.comô about the immediate and long-term impact the memo will have on the industry.
The fees are currently the hot topic and have garnered the most industry feedback.
"One thing that seems to be evident to me is the need for all glass companies to become really up to speed with the technology that is currently available. If you are a participant and if you are manually filing, there's not $13 or $9 to give away at this point. Shops need to really know what is available and take advantage of those options," said Shawn Newport, owner and president of Star Glass in Erie, Pa.
But as Anderson pointed out, if a shop isn't on the network, the fees for paper invoicing may pose more of a legal problem.
"If they're charging a paper fee to someone who is not on their network, then we're back to believing that that's conversion because they're taking money away from a shop who is not in their contract and that's not legal," Anderson explained.
And while the fees certainly are an important change to the Safelite Network Participation Agreement program, having a more long-term effect on the industry is the 30-day deadline to dispute a short-pay.
"It's intended to obstruct and hamper the ability of the shops to collect short pays. It's an extremely onerous burden to have all your paperwork set and sound within 30 days. I can't imagine any business in any industry that has 30 days to get their paperwork [together] and fix [any problems]," Anderson said. "Most states give businesses 6 years to settle payment disputes. The problem with glass disputes is that you have to match up invoices with the invoice you send out to make sure they match. It's very burdensome for medium-sized shops that do a lot of jobs in one day to reconcile the paperwork and make sure they have a complete understanding of all their accounting, especially by the time the month has ended. It's very burdensome."
Newport calls into question the meaning of the memo's phrase "[i]n the event that Participant submits an invoice for auto glass repair/replacement work containing errors or deficiencies," that would precipitate a short pay.
"I'm not sure how that will hold up. That would need some explanation. What if it's they're mistake? If it is their mistake and we catch it after 30 days, is it just our problem?" he queried.
Anderson looks at it from another point of view.
"There isn't really a need for 30 day deadline because Safelite says that being on the network entitles to you to a certain amount of certainty, so presumably there would be no short pays. By being on the network, you're guaranteed certain pricing due to a pricing agreement and there presumably shouldn't be a short pay, but if there is, why should it be caught within 30 days of payment?" he said.
Overall, Anderson thinks the move could backfire on Safelite.
"One of the other interesting things I think is that this could be a bad move on Safelite's part because it will cause more people to file payment complaints than normally are. Usually, the longer a short pay goes, the less aggressive people will follow up on it. Safelite may end up with more payment complaints than they would have if they let them age, but that's for Safelite to deal with not us," he said.
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