David disagrees with the take here that a good contractor really doesn’t need to collect a deposit for materials.
Deposits are common in business. They can act as a form of surety. Many contractors’ materials are non-returnable or have re-stocking fees. If a customer backs out of a project this deposit helps cover incurred costs.
Having a signed contract is for the customer’s benefit and offers virtually nothing to the company. Even when a contractor wins a ruling in small claims court, the court offers no practical avenue for remuneration.
The article states “A deposit is a pre-payment and I don’t do it for any other purchase”. Real estate transactions, vehicle purchase, vacation bookings, are a few quick examples to illustrate the inaccuracy of that statement.
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