By Marie Kambas
BUYING groceries on credit, once a common practice in Cyprus, when communities were smaller and everybody knew everyone else, has made a comeback since unemployment exploded but unlike the old days, some small traders are finding it hard to recoup what they are owed.
Many Cypriots, having lost their jobs or their money due to the deposits haircut, have turned back to buying on credit, or even bartering, to keep their kitchen cupboards stocked.
A group of small shopkeepers interviewed by the Sunday Mail, said they were selling on credit because they felt they could lose long-time customers if they refused, or because they feel sorry for those whose incomes have fallen or dried up.
“Even though it’s wrong, by necessity you sell on credit,” said Lakis Peppos a 58-year-old who owns a small family grocery store in central Nicosia.
“Look at these booklets, they are all credit, but what can we do? Clients ask to pay on credit and I can’t refuse them,” Peppos said, displaying about six school exercise books where he details credit purchases.
“Sometimes though when I want to buy merchandise for my grocery shop I can’t, because some of my clients weren’t able to pay me so I have to borrow money in order to buy stock,” he added.
Kostas Loukaides, 52, owns a car repair shop in the Pallouriotissa area of Nicosia. He too offers his services on credit but says that collecting what he’s owed is not easy, and he took has difficulties when he goes to order new supplies for his business. But, he said he was at least able to get something back in kind.
“Unfortunately I have to pay €1000 to buy mechanical oils, money which I don’t have at the moment because I’m waiting for some clients to pay me first,” Loukaides said.
He said that while buying on credit was widespread, some customers resort to alternative methods of payment. “Once a client came here and he wanted me to change his car brakes. He said he didn’t have any money but he had some traditional Cypriot equipment for baking bread. I serviced the car in the end and got the equipment as payment,” said Loukaides.
Now the mechanic is a proud owner of a bread baking plank and a wooden bowl suitable for kneading dough.
Selling on credit was a very common practice among businesses and consumers in the past and may still entail certain risks, according to Stefanos Koursaris general-secretary of the Pancyprian Organisation of Professional Craftsmen and Shopkeepers (POVEK). “Basically selling on credit is money for air,” he said. While hundreds of small businesses had closed, it was more due to the crisis than the credit practices of customers, he added.
Demetris Protopapas a 28-year-old owner of a shop that sells car radiators continues to sell on credit, as it is expected by his customers, he said, even though some of them now owe him a total of €20,000. He expects to he will have to write off some 10 per cent of that amount.
“Once I had a client who didn’t have money to pay me, so he gave my father as a payment a sack of potatoes, I couldn’t do anything about it,” he said. “I just took the potatoes as payment”.
Some shopkeepers who have had a bad experience with customers unwilling – or at best unable – to pay what they owe, have ceased providing their merchandise on credit to some customers.
The risk of running out of cash that would allow them to order new stock is also a strong factor that prevents some shopkeepers from continuing to sell on credit, especially considering that unlike the old days when people would always pay up in the end, some people today just take advantage.
One of the merchants who feels this way is Giorgos Sipone, the 57-year-old owner of a fabrics store in Onasagorou Street in central Nicosia. “We used to sell on credit very often, but my clients had the money to [ultimately] pay,” he said. “At the beginning of this year, I used to sell on credit to some clients I knew, the result was to lose them as friends as well because they didn’t pay me.”
Sipone said they had even tried to hide from him by avoiding his shop but he had spotted them, he said.
For Panicos Lazanias who sells electrical appliances in Limassol, selling on credit was the exception not the rule. “Only if I know a customer well,” the 44-year-old said. He added that since none of his suppliers sells on credit, he too has to sell only to those who can pay for what they get so that he can replenish his own stock.
While selling on credit in these difficult times is a double-edged sword, not doing so also carries its risks, like in the case of Charoula Sotiriou, a 45-year-old female grocer in Arediou, in the Nicosia district.
“Now we have stopped selling on credit, and because we have stopped we lost many clients,” she said. “I have a customer who owes me €300 for the past two years. He changes his phone number all the time. I also have another client who owes me €4,500 and I don’t know when I’m going to get that money,” she said.
“It’s become a disgrace, especially when they come here they ask to buy on credit. They fill up the trolleys and then they come up two months later with the excuse ‘we forgot to pay you’,” Sotiriou added. “When you ask for your money some of them get angry as well, and I become embarrassed because I’m asking for my money.”