Tuesday, February 27, 2007

Abusing the system...

Since what seems like the dawn of time, Costco has had an absurdly liberal return policy for products bought from its warehouses. Basically, you could return anything, anytime, even years after you bought it, for a full refund. Well, thanks to the actions of a few who have taken advantage of this policy, Costco has been forced to change it's absurdly liberal return policy to one that's only reasonably liberal. [Costco tightens its return policy -Seattle PI 2/27/07] "Anytime" has essentially turned into "within 90 days", though has been supplemented with a new 2-year warranty. Of course, this wouldn't have been an issue, if not for the abuse by some unscrupulous customers who would buy a $2000 plasma TV, only to return it 6 months later only to turn around and buy a brand new model for half the price. As ridiculous as it sounds, it was fully within the letter of Costco's policy to do so, though certainly not within the spirit of it. It has become so commonplace that one customer, as noted in the PI article, even went so far as to refer to it as Costco's "free TV upgrade policy." As a result, the majority of honest customers to whom Costco has always tried to provide outstanding customer service are being penalized. Now I believe that their new policy is still FAR more than reasonable, and better than you'd find anywhere else, it's the principle.

The "abuse it because you can" philosophy stretches far beyond Costco, or even retail stores in general. It's an epidemic in American society. Cable television, cell phones, any service-providing company is a victim of this. I know people who call and haggle with Comcast over their cable bills every month, not because they aren't satisfied with their service, but just because they know if they complain about something they'll get months of free service or other discounts. When I've questioned these people in the past, it's always rationalized by "they charge too much anyway, it doesn't cost them anything to give me a discount," or "that's the way the game is played." The problem is that it IS costing the company money, and it's also costing every customer in a lack of quality customer service and companies standing by their products and services.

I believe that most companies genuinely want to keep their customers happy--it's in their best interests to do so. It's just that most often, they've been burned so many times in the past that they are skeptical of every complaint that comes in. They start assuming that the majority of customers complaining are just trying to get a free lunch, and as a result crack down on their policies and customer service. Who really suffers is the honest customers, who do in fact occasionally have legitimate complaints or problems. Take my recent bout with Nissan's customer service regarding my broken window regulator on my car. [previous blog thread] I don't believe I was at all unreasonable in my complaint and request for a repair, and ultimately I was able to convince Nissan that I wasn't just trying to get something for nothing, after which they stood by their product and fixed my issues. But no doubt they are inundated with requests from customers expecting them to fix problems due to normal wear-and-tear and the like, that no reasonable customer would ever expect a company to do. I could tell this just from my conversations with the customer service representatives I talked to. As a result, a company who genuinely cares about its customers ends up unintentionally driving away exactly the good customers it wants to cater to.

The value of knowing your customers personally, and customers knowing the company personally, is never to be underestimated. If the company knows you are an honest and valued customer, they are far more likely to help you out when you have a problem. It's a compelling argument for perhaps paying a bit more to buy a product or service from a more reputable vendor, though I definitely don't offer a blanket endorsement for the mom-and-pop electronics store either. Large or small, you just have to know who's standing by your products.

Sure there are unscrupulous companies and salespeople who try to take advantage of the honest, good-intentioned customers... but that's another rant for another blog.

1 comment:

Jesse said...

I realize this is an awful long time after the original post to post a reply. However, I feel compelled, anyhow.

I agree with the author in nearly everything he said. I would like to endorse the statement of his friends, that Comcast does indeed charge an exorbitant amount of money for it's services. You can compare Comcast's rates to rates of many other providers of the same services all over the world. Comcast charges what the do in many areas because they monopolize the market by buying competitors or lobbying for legislation to stifle an future competition.

Comcast charges us as much as it does, not because consumers are abusing it's system. Comcast charges as much as it does, because people have no competitive choice for a service provider.