I own a small internet shop selling low-priced sunglasses (in the lines of 10 dollars each) and sometimes I have the idea that my customers are not always honest with me. In cases where I can not proof that the customer is wrong, I always go with the no-hassle way and send them another sun shade that they claimed to not have received etc. (I send the shades by regular mail which is not tracked, because of the fact that tracked shipping starts in my country at more than half the price of the shades)
Today, for example a customer who ordered 5 sunglasses, claimed that there was one missing, let’s call it Model A in Color A. I looked for the order, and noticed that this shade was not ordered, and then he returned to me and said he was confused and that it was actually Model B in color B. Though, I am 100% sure that I included it in the package (that was shipped with tracked shipping because it were more sunshades) and for some reason I believe he is trying to get another shade for free.
Normally, I always just send them another shade in cases like this, because I have no proof ‘against’ them and I want to avoid risking my reputation, but I feel that I’m losing quite some in cases like this. I’m pretty sure that I’m not the only one in this, what do you suggest?
You can quantify this into an actionable policy, so that you don’t have to think about it all too much. First, accept that there will be fraud and dishonest customers (sounds like you have) and determine a simple way to handle it, each time.
Losing money on a single sale shouldn’t bother you, it’s the overall impact of it. Think of the buffet model - 10% of customers wind up costing the house to take a loss. About half of them cause the house to break even. They make a massive profit margin on the rest.
They don’t care about those who eat more then the value that they charge because the math works out well for them.
If you can create a policy that dictates what to do in these cases, you look at your sales history and make sure it’s going to make you profit. You can also put barriers in front of people who want to commit fraud, like requiring customers who claim that one item is missing from an order to return that entire order to get a replacement.
If your fraud is fairly low, should be able to easily absorb it and still maintian your profit margins. Then you have good customer service AND profits, and the [hopefully] small percentage of customers who try to screw you won’t be able to kill your margin.
I normally always do that, but I feel that I’m losing quite some money on this. My margins are not that high and times are hard and when I looked at my finances, I saw that I lose quite some money here. Is there nothing I can do?