Verification of dunning effect and proposal for a cumulative deposit rate prediction method for payment after delivery in the mail order business

Payment after delivery is a distinctive feature in the Japanese mail order system. The customer under payment after delives pays based on the payment form included in the packaging of the product after receiving the product. It gives peace of mind to customers, and so increases the revenue of the mail order operators. On the other hand, it may causes payment delays and irrecoverable debt. The increase of irrecoverable debt is a concern for stakeholders. Mail order operators are required to perform more effective and efficient credit management. They need to know the deposit rate at early stage and manage the cost appropriately. Firstly, this paper investigates the verification of dunning effect to difference in the customer deposit situation depending on whether they make demands. Next, it proposes a method of predicting the deposit rate based on the accumulation of deposits from the customer with actual data.