When Customers Lie

Brandon Eley

If you’ve been in business for any time at all, you’ve probably come to the realization that the customer is not always right. Sometimes they’re not only wrong, they’re dishonest as well. How you handle situations with difficult customers says a lot about you as a company, and as a person.

In a recent blog post, Seth Godin talked about unreasonable customers. He gave a few reasons why you might tolerate a customer or client who makes unreasonable demands, such as if you promised you would. He also gave some great reasons why it might be best to fire a customer. He concludes:

In general, organizations are afraid to fire customers, no matter how unreasonable. This is a mistake. It’s good for you.

We recently had a couple of really difficult customers, and I thought I’d share with you my process for handling difficult customer situations.

The White Lie

As the owner of an online retailer, I see all sorts of customer service issues come across my desk. Any time an employee doesn’t feel comfortable handling a situation, or they need a second opinion about how to respond, I’ve encouraged them to forward the issue to me.

We recently had a situation with a customer regarding returned merchandise. Our return policy clearly states that all product must be in new condition to receive a refund or be eligible for exchange. They sent back five products, four were new and one was opened. We also noticed that the customer had repackaged the products in another shipping envelope, carefully transferred our shipping label to the new package, and written “refuse” on the outside of the package to be able to send the package back without paying postage.

We sent the customer our standard email letting them know we processed their return, and refunded them for the four products received in new condition. They quickly responded stating all products were sent back in new condition. After a few emails back and forth with customer support, the issue was escalated to me.

The customer demanded a refund, or they were going to call their credit card company and instigate a chargeback.

How Much is Your Time Worth?

We know the product (a pair of socks) was sent to the customer in brand new condition. The product retails for less than $10, and she had already exchanged several emails with customer support prior to the issue being escalated to me. She was irate, demanding a refund.

I know she was lying. We knew she was dishonest from the second we received her package. If she would commit fraud against the postal service to avoid paying $5 postage, what wouldn’t she lie about? But at the same time, the socks were only $10 (retail price, not cost) and we had other (good) customers to take care of.

Because I really believed she would contact her credit card company and issue a chargeback, I refunded her $10. A chargeback would cost me more time and money, even if I won, and I didn’t want the hassle. Sometimes it’s just not worth the fight, even when you know you’re in the right.

When Should You Fire a Customer?

There are lots of reasons to fire a customer, but the most obvious is that they are making unreasonable demands that are too costly or time consuming to meet. But there are really only a few reasons I will fire a customer: they are disrespectful or hateful to one of my employees, or they have a different set of values and I just don’t want to do business with them.

If a customer curses or screams at one of our employees, they know they do not have to listen. They are allowed to hang up on the customer and if they call back, I will be happy to talk with them. Those are typically pretty easy to deal with, because they either calm down and be respectful or the conversation is over.

But customers who just have different values can be difficult. I believe in honesty and integrity, and whether I’m at work or at home, those principles mean a lot to me. Some people just don’t feel that there is anything wrong with telling a “little white lie.”

In the example above, we knew the customer was dishonest from the moment we received her return. Even though I chose to refund her money, I did not want to do business with someone that was so clearly dishonest. When I emailed her about my decision to refund her for the opened merchandise, I also let her know that we would not be doing business with her again:

As a small, values-based and family-run business we have the privilege of choosing who we serve and we will not be doing business with you in the future. We have flagged your account and will immediately cancel any future order you place with us.

Being in business is not just about making money. You are at work for a significant part of your life, shouldn’t you work with people you like dealing with?

When Do You Fire Customers?

Have you ever fired a customer? What was the reason? I’d love to hear about it in the comments below.