Do you think your vendors should be able to "Automatically Renew" your contracts?

Mike Paradies
The one thing that I (as a vendor) feel is important to understand in this question is that quite often the service provided is "front loaded". Much of the efforts used to provide a customer a service happen early in the relationship. In most cases it would be too expensive to charge a client all of the money up front and that is why the cost is spread out over a period of time. At least that part of the relationship is "good for the Dealer". Is that reason enough for an automatic renewal clause? Probably not, but I think it is something that needs to be considered if you are being objective.
Chip Diggs
My question really points to the level of service you get once you are in a contract that "automatically" renews. Let's say you sign a 1 year deal with a vendor with an “automatic” renewal clause. Vendors, like dealerships, have turnover quite frequently. Let’s say two years later the manager that signed up for the program is gone; the dealership has not seen a rep from the vendor in years and low and behold is still paying for a product that they don't need and in the case I'm speaking of are not even getting. The dealership let the vendor know they would not need the service any longer just not in the “correct” format. Since you are a vendor how would you handle such a scenario? What if a dealership paid you for a service that you actually were not providing them with? Once it was brought to your attention what would you do? The only reason why the dealership is paying the vendor is because the contract automatically renewed and the person who originally signed up for the product is gone. Accounting has no idea they shouldn’t be paying the bill because the bill looks legit and they’ve paid it before.
Bill Simmons
@Chip I would not like it at all. This points out the importance of dealerships need to read what they are signing and who in the store is allowed to commit. I would hope that the vendor you are working with would do the right thing and let you out of the deal, especially if their product or service is not producing any results for your store. All of my recent vendor deals have been for a minimum of 90 days, renews monthly, with a "30 day out" if I want to cancel.
Chip Diggs
Bill - You are 100% correct. Dealers do need to make sure they know who signs what contracts. My big issue again is simply this...What responsibility does the vendor have to make sure they are at least supplying the product the dealer is paying for. In this case for several years this vendor accepted money but did not provide a product. NOTHING!. We also have verification that someone from our auto group informed the vendor in 2008 we no longer were going to be using their service. Because the request was not in the proper written form the vendor continued to bill the dealership even though they were not providing the dealership with any product. This vendor now is wondering why we are asking for a partial refund. I did say partial (75% of the amount paid in). We accept we had a part in this fiasco however we believe that if you are paying for a product and you don't get it you should be reimbursed. Are we asking too much of this vendor? Thus my initial question regarding "Automatic" renewals. If vendors had to come in every week, month and quarter to validate their product is working this would never happen. The "Automatic" 1 year renewal makes vendors less likely to "service" their clients. As was the case with this vendor.
Randall Welsh
I have heard some real horror stories in this area recently. I am blessed, our product only has a 6 month minimum and then it is month-to-month with a 30 day out. So, we earn the business a month at a time. We do charge a small set up fee only as everything we do is customized as the way the Dealer wants it to look and feel.
Chad Annis
As a vendor customer service a critical driver of a successful dealer/vendor relationship. If they have provided no services based on the contract but have collected payment for multiple years in my mind the vendor actually broke the terms of the contract. My assumption is they were supposed to be supplying some sort of value or service for the money being paid.

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