The Girl Scouts Dun the Crumbs

Didn't pay up on your cookie order? Chances are you'll be hearing from a collection agency hired by the local council

By Jessi Hempel

A word to Thin Mint lovers everywhere: Don't cheat the Girl Scouts. Across the country, scout troops are stepping up efforts to collect from delinquent cookie consumers. The venerable organization recently hired OldDebts.com, an online debt-collection service, to send 2,000 collection letters to deadbeats in one Midwestern state alone. And councils from Washington, D.C., to San Diego have also hired debt pay-up agencies to pursue cookie-payment scofflaws, mostly buyers who place big orders and don't fork over for them or Scout moms who collect for their daughters but don't turn in the cash.

An American fund-raising institution since the early 1920s, the Girl Scout annual cookie sale is run locally, says parent organization Girl Scouts of the USA. Therefore, the onus falls to selected individuals -- volunteers -- at each of the nation's 315 councils to contract with one of two Girl Scout cookie suppliers and manage the army of 2.8 million uniform-clad volunteer saleswomen aged 5-17 who peddle their cookies to friends and neighbors.

In most councils, uncollected revenues account for less than 1% of sales. But that adds up. Take the Girl Scouts of the National Capital Area Region, which oversees 3,896 troops in the Washington, D.C., area. In 2003, they ended their cookie season with an outstanding debt of $30,000.

ON THE RECORD.

  The Girl Scouts are quite serious about collecting their dough, too. Says Girl Scouts of the USA spokesperson Marion Swan: "Part of the Girl Scout Law requires our members to be fair and honest and to use resources wisely. Toward this end, it's imperative that we set a good example and try to recoup our girls' investment in time and effort by collecting unpaid debts."

Mary Doyle of the Girl Scouts San Diego Imperial Council tells the story of a woman who recently came in to pay a cookie debt that had been outstanding for several years. Turned out the woman's daughter, formerly a Girl Scout, had recently gotten a driver's license, but the woman couldn't finance the new car she wanted to buy for her daughter until she cleared the cookie debt from her credit record.

Debt-collection efforts fall in line with a number of nonprofits that rely on outside help to convince consumers to meet their financial commitments. Fidelity Information's OldDebts.com handles a number of nonprofit clients, says CEO Jeff Cronrod. "Many nonprofits don't want their names to get out because they fear it will tarnish their reputation," he says. But most rely on money raised through initiatives like the cookie sales to maintain their operating budgets, and when that money fails to come, they have no choice but to collect.

SQUEEZING THE WELCHERS.

  Depending on the council, most Girl Scout cookies run $3 to $4 per box. Each box of Do-si-dos and Samoas sold provides local troops with 50 cents to 65 cents. After cookie expenses, the remainder of the funds go to councils to provide troop support, summer camps, and educational experiences for local girls.

Few people intentionally try to welch on their debt, says Sally Boggess, spokesperson for the Miami-based Girl Scout Council of Tropical Florida, which manages 675 troops, and most cookie-money disputes with Girl Scouts and moms are settled internally. Notes Boggess: "These volunteers are just that, and they give us a lot of hours."

But Miami, too, has sought help from a debt-collection agency to balance the books on last season's $17,500 in unpaid sweets –- exactly 1% of total sales. Maybe a merit badge should be created for cookie collections.

Hempel is a staff editor for BusinessWeek in New York

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