Income tax season has come to an end for the credit and collection industry. But it’s not like Christmas, where the tree and decorations get boxed and put in the attic for 11 months, only to be brought out again next November. Nope, not like Christmas at all. Companies need to keep on keepin’ on and continue to work as hard as they have been for the past four months.
There is no doubt that income tax season is huge for the credit and collections industry. The windfalls that many individuals receive in the form of income tax refunds are used to pay off outstanding debts and to help those people get back on level financial ground. Those avalanche of tax refunds being received might have slowed to a trickle, but collection agencies can't slow their efforts. Collection agencies and creditors must continue to use many of the strategies that were put into place during tax season to continue trying to collect from individuals with unpaid debts.
A letdown is common for collectors and collection agencies. The number of inbound calls will likely drop and the number of right-party contacts will likely return to pre-tax return levels. It is pivotal for collection agencies to continue to motivate their collectors and offer incentives and rewards to keep morale, and recovery rates, as high as possible.
During a recent webinar, one collection agency executive said her company promotes a text message payment program on the collection letters it sends out during tax season. Based on the response rate so far, the company plans to continue the text message program when tax season is over. Point being, this is not the time to sit back and rest on the laurels of what was hopefully a successful tax season.
Companies often try new things during tax season and those strategies should not be treated like Christmas decorations. If effective, they can, and should, be used all year long. If sending fewer letters did not lower your recovery rate or your inbound calling volume, then maybe consider continuing that and investing the savings from less paper and postage into other areas of the business.
Income tax season may be over, but whether it leads to a letdown at your collection agency is largely up to you. Keep the fun and focus going and enjoy that increased volume the whole year round.