In 1850, Swiss hotelier César Ritz coined the phrase le client n’a jamais tort which roughly translates to the customer is never wrong. If a customer complained of a bad dish at dinner, he was known to remove the dish and replace it entirely. At the time it was a revolutionary concept, previously many businesses had been run with the philosophical mindset of caveat emptor which roughly translates to let the buyer beware. That principle made it the customer’s responsibility to find hidden or not mentioned faults in the product or service they were purchasing. The only responsibility of the seller was to not actively conceal or mislead the buyer about the quality of the service or product outright. The concept of businesses adopting more responsibility to take care of their customers caught on like wildfire. In the early 1900’s, Marshall Field and Company (known today as Macy’s) adopted the slogans the customer is always right and give the lady what she wants. Marshall Field pioneered the idea of accepting unconditional returns. Nearly a century later the phrase the customer is always right has become a phrase that almost every American is familiar with. When asked to describe good customer service, many Americans would no doubt pull out the phrase the customer is always right. And in today’s competitive business environment, the customer is always right can be a fruitful relationship marketing strategy. Relationship marketing “focuses on building and maintaining long-term customer and brand loyalty.” The ability to inspire brand loyalty can allow a business to decrease the overall marketing budget long-term. Loyal customers will continue to purchase from the company and may even recommend the brand to their peers. Business owners need to be smart how they adopt the strategy, though. Many Americans have weaponized the phrase. When they don’t get what they want, they pull out the customer is always right card. And managers, especially ones that firmly believe in the philosophy, give them what they want. The problem is that too much of this mentality can be a severe financial hit to small or struggling businesses. My sister works at a local Hastings that has this very problem. Yes, Hastings is a national chain, but it’s not doing as well as you might think. Their main product is books, CDs, and DVDs. All products, which more and more, are being purchased by consumers online. While they’ve recently begun to shift what they sell, it will still be years before many branches of Hastings recover. The managers at this particular chain, bless their hearts, tend to parrot the phrase the customer is always right way far too often. They really, really need someone to grab onto their shoulders, shake them, and yell, you haven’t been profitable in years; stop letting customers bully you into giving them cheap and free items. What a weaponized use of the customer is always right looks like? Not too long ago, a Hastings customer returned the movies he rented five days into the rental period and demanded his money back. He complained that he didn’t like any of the movies and didn’t actually watch any of the movies past the first five minutes. When the cashier pointed out that Hastings did not guarantee that their customers enjoyed every movie they rented, the customer pulled out his trump card, that he, as the customer, was right. He demanded to see the manager. And the manager, against all movie renting logic, gave the customer his money back. How Could That Be Wrong? Reason 1: It’s not a logically reasonable request. Movie rentals have always been treated more from the let the buyer beware philosophy. You rent at your own peril. If you don’t want to waste your money, look at reviews beforehand. Hastings employees are even told to encourage potential customers to look at movie reviews. In this case, if the customer did complain on Twitter about Hastings not giving into his demand, most potential customers would realize the guy was being unreasonable. You can respond to any negative Facebook or Yelp reviews by the individual explaining your side of the situation and what actions you took to remedy the situation (more on this later). Reason 2: Bad Precedent. Whether the customer lied to rent free movies or he was honest about the situation, it doesn’t matter, the decision to give the customer his money back can set up a dangerous precedent. Every customer in line behind him and every person who he tells the story to now knows that they can get free rentals from the store if they claim they didn’t like the movie. And unsurprisingly that’s what happened at this Hastings. That first customer started a trend. Suddenly dozens of customers were demanding their money back when they didn’t like the movie. That portion of the store became so unprofitable, the managers ultimately decided to cut the number of rentals available significantly. What Should Have Been Done? The way that Americans today interpret the phrase the customer is always right isn’t how it was originally meant. Smaller and struggling businesses, should try to keep the original phrase in mind when interacting with customers: assume that the customer is right until it is plain beyond all question he is not. Determining after talking to the customer calmly, whether giving the customer what they want is reasonable. Read the situation. Ask yourself these questions, Is the request reasonable? Does the person seem genuine? Is the problem based on negligence on the company’s part? Or did the problem arise from another customer misplacing an item? Will not giving the customer what they want ruin an important relationship? If the customer goes to Twitter or Facebook to complain, how much will it affect how other customers see you as a brand? Can you explain your side of the story in a reasonable way? What Should Hastings Have Done? Just from the bare facts, I would have recommended that Hastings not give the customer a refund or give him a partial refund. Asking that all five movie rentals be refunded is far too costly when the customer should have done the proper research himself. Whatever the business decides, the most vital part of any customer complaint is strategizing how to prevent similar problems in the future. In this case, Hastings should have posted signs, created beginner rental pamphlets, or required a beginner rental agreement that explained the policy of Hastings not being liable if the customer did not enjoy the movie. We live in a society where customers, business owners, and managers parrot the phrase the customer is always right like its gospel truth. Business owners and managers need to realize that they can and sometimes should stand firm when customers demand refunds or discounted items. Go into the situation with an open mind. And if you determine you can’t give a refund, explain why. You don’t need to beggar your company by giving into customer demands every time. Image Source: Flickr, Nicholas Eckhart ____________________________________________________________________________ Tweak Your Biz is a thought leader global publication and online business community. Today, it is part of the Small Biz Trends stable of websites and receives over 300,000 unique views per month. Would you like to write for us? An outstanding title can increase tweets, Facebook Likes, and visitor traffic by 50% or more. Generate great titles for your articles and blog posts with the Tweak Your Biz Title Generator.