Defining Good Customer Service

It's interesting how my thinking about business practices shifts from the theoretical to the practical in light of experiences where I am personally on the receiving end of a business policy.  Usually I bring a birds-eye view in my professional role as a consultant advising business and organizational clients, but when I am the customer it really brings home the principles that provide a 'rudder' to guide the policies we recommend.

Right now, this is on my mind because of the situation with an unnamed company, that provides marketing workshops and consulting services. In February, I signed up for a workshop with them which was scheduled, tentatively, for the end of June.  Around the end of March I decided that I didn't want to attend and have requested a refund. They refused, citing a 7-day cancellation policy which they claim was written on the bottom of the photocopied registration form.

Of course, every business has the right to develop their own unique policies relating to returns, refunds, or cancellation of agreements.

Depending on the industry, the consumer may be asked to agree to those terms at the time of purchase; ie a check box for an online transaction which might say something like "I have read and understand that ..... stated policy".  But sometimes, you might not realize what terms you have accepted until you go to return an unwanted item and the clerk points to their no-refund policy posted on the wall or the bottom of your receipt. And except for a few rare circumstances, it's all legal.

There are many businesses who have built a very successful brand on the premise of "no sale is ever final". The women's clothing retailer Ricki's comes to mind.  And from personal experience,  I believe that Totem Building Supplies has a very generous policy for returns; at times even accepting a return item from us without a receipt.

We also know of people who abuse a store's return policy; purchasing a dress, jewelry or shoes, wearing them for a special event and then trying to return the day after.  My friend Angeline who owns Bells & Bows Bridal has many such stories.

So how does a business determine a reasonable policy which is fair to both the business and consumer? In advising my business clients, we generally walk them through a thinking process to identify a set of best practices that will a) protect their financial viability and profitability, and b) be perceived as fair and reasonable by the marketplace.

We ask them to think about what costs they have incurred which they cannot recover in the event of refunding a client's money. The formulas are different for every operation, and can be complex depending on the industry and size of company. For example; at the time you buy that dress Angeline's single location store has already paid the rent & utilities for their space, commission and wages for the sales clerk and the wholesale cost of the item. All of which have to be paid out of your purchase price. If she agrees to accept your dress on return, even assuming it's in perfect condition and still current enough to attract another immediate buyer, simply absorbing those fixed costs may make the difference between the sale being profitable and not.

In the case of a business like this with no building location, no inventory, and no fixed staff costs, I have a tough time accepting a no-refund policy on a workshop four months away. At that point, she is only committed to a minimal expense and still has four months to re-sell that seat to some one else.  Refusing to consider even a partial refund under those particular circumstances seems indefensible.

Aside from whether or not they are legally entitled to keep my $750 for a workshop that I will not be attending, I do believe that every action we take in life has a consequence, and in my view most of the time the cost of an unhappy customer far outweighs any benefit of keeping the money.

What do you think? What's the experience in your business, on either side of this debate? Send me a note, I'd love to include your examples in a future book or blog article.
Colette Acheson