We tend to think of unclaimed property as a liability in a number of different ways: it uses resources, demands staff hours, adds complexity to a company’s financial picture, and exposes us to potential financial and reputational disadvantages. However, because unclaimed property laws are designed to protect consumers (which is a positive thing), a holder company also can derive positive customer-service-related benefits from properly managing abandoned and unclaimed property. This usually takes place during and after due diligence, when you find customers and communicate with them for the first time in a long time.
It might be difficult to see the customer service value of unclaimed property activities from your vantage point in the tax, treasury, finance, compliance or accounting department within which the unclaimed property function is handled at many holder companies. Your concern is making sure state statutes are followed and your company is not exposed to undue liability. In other words, your focus is the company, and you naturally tend to think of vendors and customers as statistics: unclaimed property owners you must properly categorize and report.
Looking at unclaimed property due diligence from the other side
The other side of the unclaimed property question is how it affects missing owners who are your vendors or customers until the transactions are reconciled, accounts are closed or funds are remitted to the states, as well as how their satisfaction can positively affect your company.
If you think about unclaimed property from the customers’ point of view, the discovery and resolution of outstanding balances is exciting — a benefit to them, rather than a detriment to the company as you may be thinking about it. (For some customers who misunderstand your initial approach, it takes a little doing to convince them you have your best interests at heart. See “How to Tame Wild Owners” In MarketSphere’s Knowledge Vault for ideas to clarify your intentions to hostile customers.)
If you keep these advantages to your vendors and customers in mind as you work with abandoned and unclaimed property and put processes in place to activate these opportunities, you can help your company extract surprising benefits from unclaimed property activities.
Three main advantages of a customer-focused due diligence program seem to rise to the top for holders.
1) Improving the company’s reputation
Customers leave companies and abandon property for many reasons. Often, it’s simply because they have moved. However, in some cases, customers stop using a company’s services because they are unhappy. In these cases, attempting to connect with an inactive customer and resolve the issue to their benefit can turn a negative opinion around. In fact, if your company suffers from a negative reputation for any reason, you can point to efforts to find missing customers and return property as a positive fact to help offset any negative issues.
2) Reviving vendor and customer activity
As you know, capturing the attention of a new customer is often a matter of being in the right place at the right time. For the same reason, your efforts to reconnect with inactive vendors and customers can lead to the reestablishment of inactive property. A customer might begin using an old account simply because you contact him or her at a time when there is a need for the account again. No matter the reason your customer begins using the old account, your efforts to reconnect can lead to increased deposits, additional purchases, positive word-of-mouth, and potentially years of positive benefits.
3) Reducing reportable unclaimed property amounts
Your efforts to reconnect with inactive property owners are bound to lead to some property being reactivated, which takes those properties out of the soon-to-be-stale-dated list and effectively reduces the total amount of unclaimed property you must report. If your company has a lot of unclaimed property, this effort can save a great deal of money.
In the end, turning unclaimed property negatives into positives through added customer service will help you justify the improvement of unclaimed property practices within your company. Think of careful due diligence as not only a way to retain valuable vendors and customers, but as a way to maximize advantages, minimize disadvantages and support your company’s overall goals.