An Entrepreneurs' Company: Payless Turns 40

Payless Car Rental has reached its 40th birthday with a singular focus on a business niche and the vision of entrepreneurs.

Fred Lin, CEO (left) and Rick Stevens, president, have steered Payless Car Rental through acquisitions, overseas growth, airport expansion and into a "preferred" online presence.
Fred Lin, CEO (left) and Rick Stevens, president, have steered Payless Car Rental through acquisitions, overseas growth, airport expansion and into a "preferred" online presence.

There are two paths in the business world: the corporate ladder or your own way. The 40-year history of Payless Car Rental is a story of entrepreneurs — from the company’s founder to its franchisees and its present-day president and CEO. These disparate groups each chose their own path to build a business but never wavered from staying focused on the cost-conscious leisure traveler.

An Entrepreneur’s Vision
Lester "Les" Netterstrom was working in sales for a book cloth company in Illinois when the offer came to take a vice president’s position at the company’s headquarters in Rhode Island. Netterstrom wasn’t keen on uprooting the family. But what he really wanted, says his widow, Zenta “Dusty” Netterstrom, was to run his own business.

And so — in one of those career- and life-defining moments — he turned down the job. Instead, “He decided to buy a Thrifty franchise,” Dusty recounts. Netterstrom didn’t know anything about the car rental business, except that he rented a lot of cars at airports while traveling for his sales job.

Netterstrom’s Thrifty territory was the car rental mecca of Idaho, and soon after so was Spokane, Wash. Along with Dusty, Netterstrom ran his franchise through the last half of the ’60s and ran it well. But Thrifty corporate wasn’t necessarily listening to all his big ideas. He had an entrepreneur’s mindset, and he needed to break out on his own. “Les had a lot of ambition,” Dusty says. “He had a vision for a lot of things.”

By the early 1970s, higher fuel prices forced Americans to consider smaller cars for the first time. But at airport rental counters, the established car rental agencies were pushing larger cars for higher rates — as Dusty puts it — to make enough money to cover their airport concession and lease fees. Netterstrom thought there was a place for a cheaper alternative that rented smaller cars off, but near, the airport.

In 1971, the first Payless Car Rental location opened in Spokane. The name fit the business model, though through the years “a lot of people thought the name was really ‘Pay Les,’ ” Dusty jokes, “especially the franchisees.”

Not long after, Netterstrom created the Payless Car Rental system and began franchising. The early days were spent marketing the new niche. “I don’t know how many feelers I sent out to get people interested in a franchise, but I contacted a lot of car dealerships,” Dusty says.

One of those dealers was a former governor of Utah. He put a rental office in his Ford dealership and called other Ford dealerships in Utah to do the same, Dusty says. “We always said the Mormons in Utah got us started,” she remembers. “Things just sort of snowballed from there.”

A Logical Combination
By 1982, Payless developed 100 locations and was solidly profitable. But the company’s coverage was primarily in the Northwest and Midwest, while another independent franchise system had been growing rapidly in other parts of North America.

Canadian-based Holiday Rent A Car started in the 1960s out of a Ford dealership in Peterborough, Ontario. The company had gotten onto airports in Canada in the late ’70s, and grew quickly to 40 franchise locations in Florida and other southeastern states.

In 1982, the Holiday system owners — the Tennant family — made an offer to buy Payless. The two companies combined their franchise systems to become Holiday-Payless Rent-A-Car. The combination provided greater national coverage, and for the most part, non-competing franchise territories. “The two franchises fit together well,” says Jim Tennant, who ran Holiday’s U.S. division for two years. Dusty concurs: “It fit together like a jigsaw puzzle.”

CONTINUED:  An Entrepreneurs' Company: Payless Turns 40
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Comments

  1. Sam [ November 1, 2011 @ 05:51PM ]

    "For Lin, growth will come but not by losing sight of the Payless customer."

    There is one crucial part of the story missing: scamming clients with bait & switch tactics. Payless & its franchisee have no problem advertising $7/day and charging $40/day in exhorbitant fees.

    The sheer number of customer comlaints online is massive. Just google payless scam.

  2. Stathis [ November 2, 2011 @ 02:40PM ]

    Payless Car Rental is a big family, and to add a note on Lin's last comment, is a Small but Great Company for and is looking after for its customers Core Values.

  3. Jay [ July 5, 2014 @ 09:15AM ]

    I totally concur with Sam. Payless is an ugly company that seems to take delight in scamming its customers. The complaints about Payless grow in numbers and yet they are still in business. Besides bait and switch, the agents lie about the services, overcharge for cars and alter documents in order to justify the extra costs. Their agents are intent upon making any money, with the end justifying the means. This is a company that should be out of business, after they compensate all the customers they have ripped off.

  4. Sandi Razen [ July 20, 2014 @ 07:18PM ]

    I agree with Jay, who posted a comment a day after I had a terrible experience with Payless Car Rental at the LAX Airport. We headed over there after our long and tiresome flight from Newark Airport to start our 2 week vacation in California. We had reservation Information that we would be receiving a full sized rental car from July 4th through July 18th for the amount of 422.06. I had the confirmation information on my cell phone, and when we arrived with luggage in hand, all set to get the vehicle and then after a long day arrive at our hotel, we were told that they had no vehicle for us, not a single one, The manager was extremely rude, yelled at all customers, including myself, who had reservations well in advance, telling us, the only vehicles they had were not yet registered, and had no plates on them. We were told that we now , well past midnight had to be shuttled to Budget Rental, where they at Payless said they would cover the difference in Price. Needless to say, We were shocked when for the same sized vehicle we were now at Budget going to be charged an astronomical 1284.02. Fast forward, vacation now over, I am still fighting with Payless to get reimbursement of well over 844.00, and spent a good portion of my well earned vacation arguing with customer service regarding this manner. This company is the worst, in car rental and customer service, and I for one, would be happy to see the company go under, They are horrible.

  5. Mike Duffy [ September 3, 2014 @ 07:06AM ]

    The negative feedback above is exactly what you get a Payless. I actually read this Wikipedia background to understand how a company this bad can even exist. The worst customer experience I've ever had. I travel every week and made the mistake of renting from them twice thinking the first fiasco was a fluke. It wasn't. I later read reviews on Yelp...wow. Read the reviews. Unreal and consistent reviews of the worse possible rental car company. Shocked they can make money and are even still in business.

  6. Jennie Miller [ October 7, 2014 @ 10:24AM ]

    Payless scammed my sister. We went to phoenix Az for my brother's funeral. After we declined the insurance because we have our own insurance to cover damages. When we got home they had charged us $35.00 a day more. This is how they take care of customers. We will never rent from them again. Thats not how you take care of customers who were emotional and stressed at the counter. My sister even broke down and cried because of the circumstances

  7. Jim Maschen [ December 1, 2014 @ 09:10AM ]

    Avis bought Payless in July 2013. I've heard the customer service is much worse now than before.

  8. Travis Smith [ January 7, 2015 @ 04:21PM ]

    I reserved a car using Priceline.com for Payless Car Rental, boy do I wish I had check the Consumer Affairs reviews first. I reserved the car nearly 3 weeks in advance in hopes of getting the best price for a weeks rental. I personally drive a two seater and my son was coming home from college for Xmas so the smart thing to do was rent a compact/economy car for a week. The quote I received from Priceline was 163.00 plus tax of course. After checking many of the other car rental companies I elected to go with Payless even though I am a Gold Member with Hertz. 163.00 for a weeks rental got my attention, but I paid for it in the end. When I arrived at the Orlando McCoy Rd location I waited in line for more than an hour. I asked an employee whom I saw doing what looked like nothing to me if I needed to wait in line if I already had a reservation , her response was yes. After waiting in line I finally approached the counter with my ID and credit card in my hand. The clerk quickly noticed that my drivers license was local so he asked me for a utility bill or a copy of my bank statement, I responded with why and who carries either of those things around with them. I was enraged after waiting so long. I began trying to reason with the clerk but it got me nowhere. A 2nd clerk came to the side of the first clerk and simply agreed to everything the first clerk said. They told me that the website explains the rules for local renters and that it was my responsibility to follow those rules, they even offered to show it to me. What they failed to listen to or understand was that I didn't reserve the car through the Payless website, I reserved through Priceline, where there was no mention of any local renters rules or guidelines. I went back and forth with these guys for as long as I could stand it and I left, without the car I reserved. I soon returned with my wife after having her meet me with our utility bill and a car registration ( which I was not offered to use as proof of local residency ) again we had to fight back and forth with the clerk to allow us to use the reservation we already had, finally they agreed but as a result they said they had to add my wife as a driver for 10.00. Well that 10.00 turned into 10.00 per day! I asked if I could use my current car insurance but I was told that it would not work. Long story short my 163.00 rented exploded to 409.00. These people are horrible and impossible to reason with. I called the corporate office but only received an email which make absolutely no sense at all.
    After I read the rest reviews I fully understand how everyone else feels. I will never do business with Payless again, I would gladly pay more elsewhere.

  9. Ray [ May 5, 2015 @ 06:09AM ]

    Worst ever! Beware! Misleading conniving reps! This was my letter to Payless and I recevied a reply saying "too bad" you signed for it and you should've read the contract.
    Dear Payless,

    I recently booked a car rental from Orbitz due to your low prices and I’ve heard good things from your company. Although it was a bit off from ORD airport I decided to go ahead as you offered a free shuttlebus service. Another client and myself called on 2 occasions asking the whereabouts where your shuttlebus as we’ve saw Hertz, Dollar, Thrifty came by multiple times. The first shuttlebus arrived and then said it was full and another one will be sent out. We waited for more than 20 mins before the next shuttlebus arrived. Relived it arrived but was not too happy as we saw many other car rental buses came and went. At your counter I presented my reservation # and the clerk proceeded to enter the info. He asked if I wish to have gas fillup, extra insurance, etc in which I politely declined as I informed him that my credit card will cover if anything goes array. He showed me a printout and told me to initial and then sign saying that these were the conditions and that I am declining everything. Already late I signed and proceeded to my vehicle. I glanced over the invoice in the car and noticed the charges for Roadside Service $21.96, Vehicle License Fee $3.96. and Customer Facility Char $32.00 (see attached) and got out of the car and went back in to ask the rep. At that time there was quite a few people waiting and I managed to flag him to inquire and he said that the Roadside Service charge will be reimbursed when I return the car if I didn’t use it. The Customer Facility Charge is the charges for the shuttle pickup and returning me to the airport afterwards. I find that odd but because I was holding up the line and he assured me that they will be reimbursed upon returning the car I left trusting him (big mistake).

    When I returned the car, the shuttlebus driver Vince (being so kind) quickly picked up my luggage and put in his bus. He told me to go in and get an email receipt so we can go as he has some passengers in the bus already. Now at the counter (another person) proceeded to the final tally and I mentioned to her about the refunds and she looked at me funny and said the only thing she’s refunding me is the $100 deposit that was charged originally. With the bus driver waiting for me by the window (he has passengers waiting too) and the lady thinking I was crazy for asking reimbursement I took the bill and left but she has already taken the pink paper which I had initialed earlier and handed me a final receipt (see attached). Now I’ve booked from travel websites before and I’ve always paid the amount that was indicated unless I got something that was not part of the deal (examples: hotel internet, room service, phone calls, car extra insurance, gas fillup, etc…). If you compare the charges from you and Orbitz you have overcharged me. I find this very misleading on the initial rep’s part for telling me one thing and then the other rep telling me otherwise. I am hoping you can correct this situation as well as retrain your reps as they are the front line of your business. If they provide false information then it does not go good with your company’s goal of providing good customer service.

  10. Phil Westfall [ May 27, 2015 @ 10:42AM ]

    I think that this car rental company should change its name to "Care-less." I came across a great rate with Payless on Hotwire and reserved a car for my trip to San Diego.

    BE ADVISED: If you carry full insurance coverage on your own car, it probably covers you in the car you rent.

    The counterperson at Payless did not advise me of this fact, but strongly advised that I take out a policy with their preferred carrier, a company whose name I cannot now discover.

    I found it very stressful at the counter, while the rep made me sign or initial screen after screen, and all I wanted to do was get out of there.

    When I arrived at my friend's in North San Diego County, she told me that my own insurance should cover me. I immediately called my agent, who assured me that indeed I was covered.

    Then I called the Payless outlet at San Diego Airport, and found that I could not get through to anyone to speak with. After researching on the web, I found a little-known number (800-729-5377) to reach the Payless corporate office, who told me that I had to return to San Diego to cancel the extra, unwanted insurance of $21.50 per day, at the counter.

    Payless Corporate did not mention that I would have to provide a document to prove my own insurance -- so when I drove all the way back to the airport, the clerk would not help me without that proof. I called my insurance company, and they immediately faxed proof of my policy to the Payless office. THEN the (company-loyal) clerk informed me that the manager would not be back in until the morning, and that they could do nothing for me at the moment. I left in frustration and total disgust.

    I had many meetings scheduled over the seven days that I rented the car and had no more time to fool around with Payless. My budget for the rental car was just under $200, but in the end, I was charged over $440, $130 of which was the useless insurance, and the rest was in unexpected charges.

    Clearly, Payless Car Rental is much more interested in keeping their kick-back insurance carrier happy than in keeping me happy and doing the right thing by me. "Customer Loyalty" is evidently a dirty phrase at Payless.

    I will never rent a car from this "Care-less" company again! Renters Beware!

  11. Thora [ July 17, 2015 @ 11:39AM ]

    My experience with this company is the same as the others listed here. I reserved a mid-size car five months in advance of my arrival, waited in line over an hour in the hot Denver sun with no seating available and with my reservation in hand. Finally at the counter, I was asked if I wanted to upgrade to a SUV for $15 a day. I agreed. But then received a mini compact Nissan Juke. What a joke. Because of the initials SUV, they considered it an intermediate car stating it was bigger than the regular intermediate cars so was considered a full-size car. Have you ever seen one of these? All the websites list this car as a "Mini-compact", but Payless refuses to recognize customer satisfaction and they keep on misrepresenting their service and like all of you, they refused reimbursement. Isn't this committing fraud. Where are the attorneys. I don't understand why the CEO and Board members of this company allow their customer service representatives to treat their customers in this manner? We, their customers, have friends and relative that we talk to. Don't they realize that by disrespecting us they are insulting and disrespecting a multitude of people and in the long run, have lost all these future customers, not just the one they have ripped off? Mr. Lin, Mr. Stevens, Mr. Netterstron, Mr Harley: Pleas pay attention to this commentary and the others listed here. We are good people teaching our children and grandchildren about ethics and responsibility. Didn't your parents teach these things to you?

  12. Judy [ August 19, 2015 @ 10:33AM ]

    Horrible company to deal with. They take funds without prior authorization even after it was prepaid. Was advised by agent no other funds would be necessary as we paid all in full. NEVER RENT A VEHICLE FROM PAYLESS THEY ARE THE ULTIMATE CROOKS....THEY NEED TO BE OUT OF BUSINESS. WE NEED TO GET THE WORD OUT..HORRIBLE COMPANY TO DEAL WITH...

  13. Robert Berlin [ September 24, 2015 @ 02:02PM ]

    Worse car rental experience of my life. Absolutely horrible service and criminal business practices. Avoid like the plague!!!!

  14. James [ September 25, 2015 @ 10:26AM ]

    While renting, I told by Joe Vail (or Vale) I did not want any add-ons whatsoever. When he handed me a breakdown of the bill, it was considerably higher than the one I received from the Payless internet site. Joe explained it was due to an airport fee. Being in a hurry, I accepted his explanation and went out to the car. It had a small scrape on it, so I returned to the counter to point it out. While there, I asked if there was another care that was lighter in color (I don't like hot cars) and Joe accommodated me. The car I now got was almost a quarter tank low on gas and very dirty inside. I returned to the counter once more (remember, I was time restricted) and Joe again made an accommodation for me. Later that evening I reached my inn and went over the bill. There I found the charge for the airport fee was not an addition to the bill that was different than on my internet bill. Rather, there was a completely different charge for roadside service protection amounting to $5.99 daily ($23.96 for my trip) even though I had been very deliberate with Joe about not having and add-ons. When I turned the car in, Joe was not available nor was the manager. The clerk told me that that particular add-on is generated by the computer and a client needs to specifically ask to have the charge removed. Also, the manager would need to make an adjustment to amend the bill. I asked for the manager but was told he was not there. Upon my return I have called the Payless number, but it always goes to voicemail. I have left three messages for the manager containing my name, reservation number, home phone number and the reason for my call. I have heard nothing from him/her or anyone else. This is the poorest customer 'service' I have ever experienced with any company!!

  15. Tracy [ October 4, 2015 @ 09:29AM ]

    I rent from them all the time and although I have had some issues that have yet to be resolved I will still rent with them. If you all had such a bad experience then just go else where. I've had a few issues but I've rented tons of times where it's gone perfectly fine. Readers beware the posts above are dumb. Payless is a great company to rent from. And how many times do people rent and when it goes really well they actually leave a comment somewhere or say how amazing it was in a review on line ? Almost never Its only when their is a ad experience that they actually say anything. Payless is a great company to rent from. If you don't like it go rent elsewhere and stop complaining.

  16. Tracy [ October 4, 2015 @ 09:30AM ]

    Also it's your own fault if you signed it on the contract and didn't pay attention and read it

  17. Giabiertti [ October 12, 2015 @ 05:15PM ]

    Imperative---to inform you of the following Mickey Mouse factors, which profoundly squandered my energy, time, expertise & itinerary---in a torrential downpour: (1) Inherently arrogant & degrading agent's demeanor---most unprofessional; (2) Refusal to provide economy car requested/reserved---the lot was literally full of them! (3) Adamant to charge the midsize daily rate; (4) Refused to allow Chase Bank to fax prerequisite documents for residency; (5) Escalated the reserved rate of $91.94 to $339; (6) I missed the publication deadline for my 5 ebook series---170 countries, 9 online bookstores, 20k libraries/universities. Nobody in their right mind would accept being treated like a dog---ie., you should have personally eye-witnessed the faces of other clients---a masterpiece of sheer horror!

  18. Ada Mario Loredo Baez [ December 12, 2015 @ 07:42AM ]

    Necesito alquiñar carro del 16 de dic al dia 2 de enero

  19. Francis [ August 19, 2016 @ 10:22PM ]

    Funny article especially since these guys are crooks and should receive prison time. Deceptive and fraudulent business practices Bait and switch tactics used all the time.

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