What Do You Do When the Customer Lies to You?

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I received an interesting email from a friend, Dave Feltz, a great shoe retailer in Oklahoma, which discusses a topic we have to deal with all of the time.

Hey Rick,

I just had a customer in my store who wanted to show me the pair of shoes he “bought” from me that he was having a problem with.  Well I looked at the shoe, and thought that doesn’t look like one of my shoes, but I figured I’d give him the benefit of the doubt and took his shoe and checked the stock number against my computer records (which I have kept for 6 years.) Well the computer said that the stock number couldn’t be found, meaning that I had not ever had this shoe that the customer was claiming that I sold him.

I told him that I had never had that shoe, and that perhaps he was mistaken, to which he replied, “I bought that shoe here, I buy all of my shoes here!”  So I asked him what he wanted me to do for him, and fortunately he just wanted to show me the problem and buy another pair of shoes, and didn’t want any kind of restitution. (I wouldn’t have given any since I know that he didn’t buy it from me)

Then I asked him for his phone so I could check to see if he was a preferred customer. When I checked he wasn’t signed up so I had no way of checking if he had purchased the item or not.  So now I have no history, no receipt, and just his word that he bought the shoe from me…which obviously he was mistaken.   In this case he was just trying to inform me how the show wore but what if he asked for his money back or even a credit for another pair of shoes?

So I got to thinking that this might be a topic for this week’s tip.

As always Dave is right. This is a great issue and how do you handle it? Years ago I was on the Sally Jesse Raphael Show representing retailers on a show entitled “People who buy clothes wear them and return them”. There was a young man on the show who boasted that he hadn’t bought any shoes in years because every time he buys a new pair, he then returns them to a department store claiming they wore poorly made and the store would give him a brand new pair.

Is he wrong? Yes. But is the department store wrong for giving him a new pair of shoes? NO! Why? Because once we get into a case of product liability, the consumer is going to win every time. Besides any customer who complains about the quality or reliability of a product we, in turn, should return that product to the vendor. Vendors don’t want any consumer ever to be upset about quality issues. Many will even write letters of apology directly to the customer. The problem comes in when we are no longer doing business with the vendor because then we lose.

There is a bigger picture here. What percentage of your customers will actually try to defraud you? Yes, I agree, it is the most annoying part of retailing. BTW on The Sally Jesse Show, I shared how I refused to accept a return from someone who bought a dress for a wedding and then returned it and expected all of her money back.

But I have changed my thinking for two reasons. First is the product liability issue which is all over the news today. And secondly returns are such a small percentage that it’s not worth consuming ourselves with all the negative issues. Remember 4% of your customers are Pushy, Loud, and Obnoxious (members of the PLO) but the rest of them are just fine. Why focus on the 4%?

Before someone writes to me all in a hissy fit thinking that I am advocating that we should give the liars and cheats whatever they want, that’s not my belief either. I can’t say that because I have been in your shoes and trust me when I say “I feel your pain”, but is it worth it?

I have consulted for stores that judge consumer confidence on the amount of returns they have. They feel that if the customer is returning more, then they trust the store more, and end up buying more. In other words, they would prefer to have the customer say, “If I don’t like it, I will just bring it back” rather than saying, “I don’t know if I should buy it because if it’s wrong they give you a hassle about a refund”.  We can win the battle but lose the war.

So, if you want to vote as to what to do on this one, here are your choices:

1. The customer bought it, owns it, but can return it only within the store’s regular refund policy
2. Give the customer either cash back or credit card credit for any product liability issue. No hassles.
3. Give a merchandise credit for your store only for any product liability issue.
4. For any type of a return, give the customer whatever they want whenever they want to return it, even if you know they are being cheats.
5. For any type of a return, give the customer whatever they want whenever they want to return it, only with positive proof they bought it from you.

Click here to cast your vote and see live results.