The Repair, Replace or Refund Decision

Deciding on whether to repair, replace or refund damaged furniture can be incredibly frustrating. These decisions have large financial consequences. Preventing knee-jerk reactions, such as even exchanges or full refunds, keeps money in the bank.

While it may seem fairly straightforward, service call decision-making is far from simple. So, before we tackle the problem of repair, replace or refund, let's consider the four main factors that can underlie these decisions. How you approach service calls will depend on the manufacturers you represent, the skill level of your technicians, the tools you have on hand and your warranty policy.

Four Main Factors

1. The manufacturers you represent.

   Ashley, in particular, has made it incredibly easy to obtain replacement parts for upholstery and casegoods, even accessories. Higher-end manufacturers often don't have replacement parts available, or if they do, they're not designed to be as easily swapped out as furniture shipped KD.

2. The skill level of your technicians.

   Do your technicians possess the skills to repair any problem? For example, a nail polish spill most likely requires stripping and refinishing the affected piece. Can they do that? For a high-end sofa repair, the factory might send you cut yardage rather than a cut-and-sewn assembly. Can they sew?

3. The tools you have on hand to do repairs.

   A dining table can't be stripped and refinished without a spray booth. Upholstery requires a clean room, excellent lighting and work tables. A stripped-out metal component will require a tap set to re-thread, or perhaps a MIG welder to replace. What does your shop look like? What tools do you have and are they in excellent condition?

4. Warranty Policy.

   Some retailers stick to the written warranties and will not deviate, whether they are factory warranties, store add-on warranties, or purchased (third party) warranties. Warranties help offset the costs of repair and transit, which can be high if there are many service tickets to deal with.

It's All Connected

Consider how these four critical factors are intertwined. Any problem with the lines you carry, the skill of your technicians, your facilities or warranties offered can sink your ability to resolve service issues. For example:

• The factory sends you a free part, but you don't have a technician who can install it.

• Your repair tech has years of experience stripping and refinishing, but her hands are tied because she works in a poorly lit, cold area of your warehouse.

• Your best tech will be able to take care of a service problem in-house, but if the customer lives two hours away, the warranty does not allow for billing mileage, and the customer who must pick up the added charges refuses to pay.

Devil is in the Details

There are a host of other considerations beyond the big four main factors. The devil is in the details of course, and I can tell you that sometimes it requires a law degree to interpret the true meaning and intent of factory warranties. Some include contradictory statements or leave retailers on the hook for whatever remedy is provided. It is critical that the person responsible for taking inbound calls has the experience and intelligence to interpret and route service issues appropriately. Your salespeople should never tell a customer that “we'll get you taken care of, I'll let service know.” Even illegitimate service requests are your obligation to resolve once that sentence is uttered.

Working in service/QC can be stressful because many resolutions require taking several issues into consideration before the process of resolving a customer's issue can begin (or be rejected altogether). Manufacturers' warranties are not the only potentially inconsistent factor. Service issue decisions made by top managers in retail organizations also might be.

Legitimate Service Request?

Let's explore whether a service request is legitimate. There's always a test of reasonableness that applies right out of the gate. Is what the customer is asking for reasonable or excessive? Legitimate or unwarranted? What history do you have with this customer? Can you apply responsibility to a single party or is everyone culpable? Here are three actual scenarios I've had to deal with, presented so that you can decide for yourself.

What Would You Do?

1. Customer purchased a sofa nine months earlier.

   She calls complaining that the back is sinking in and there's a “huge gap.” Upon inspection it's obvious that the back seat rail has snapped. Signs of abuse in the customer's home are obvious: stains, tears, smoke odor. It's less than a year old. The customer insists that it be replaced. Warranty provides frame repair for five years, though within the first year the customer is not required to pay for transportation costs.

   Reasonable options you have:

   a. You can agree to replace the piece and take the loss.

   b. Refuse to refund but (if you have skilled technicians) offer to repair the seat rail on site. Your technician can explain that it will take time, but it will be reinforced so it doesn't happen again.

   c. Refuse to refund, but offer a partial refund or credit against a future purchase if she continues to insist on a replacement.

   d. Let the customer know that you believe the break was caused by abuse which voids the warranty. Be sure to document the abuse.

2. Customer says the finish is flaking off of their dining table.

   Your technician already suspects water damage. Upon inspection, the evidence shows lifting veneer next to the grooves cut into the top for decoration: largely irreparable unless you know what you're doing. Water has obviously infiltrated the MDF substrate beneath the veneer causing it to swell. The thin finish build on the table belies the fact that the grooves are not protected from liquids like the top surface is. The customer has cleaned the table the way she always has, for years, and claims the salesperson told her before she bought the table, “it is fine to clean it that way.” By the way, this is her second table, the first arrived with a lightly crushed corner which she refused. Table is within warranty but the legalese specifically excludes water and heat damage.

   Reasonable options you have:

   a. You can get into a "he said, she said" argument you can't win with the client over what your salesperson actually said. Then, cite the fine print in the warranty and live with the consequences. Make sure you have a process in place to effectively respond to negative social media posts.

   b. If you have a finish expert with the requisite skill, you can let the customer know that the water damage can be sanded out and solidified with cyanoacrylate glue, and then faux finished back to about 90% perfection, but it won't stop the problem from recurring later if the customer experiences yet another spill. If you have a "customer is always right" repair policy, you can perform the repair at no charge or (since water damage isn't covered under the warranty) offer to repair it for a reduced fee to cover your costs.

   c. Offer a store credit or gift card off a future purchase to try to placate your customer.

3. Fun one.

   Your customer agonized over choosing a dining set, finally settling on a high-end group with a perfectly even, satin-sheen top, no rub: not satin-rubbed or buffed to gloss, it's just lacquered. The factory prides itself on the durability of the catalyzed finish with zero VOCs. A few days after delivery she notices that when viewed in a certain light, extremely fine scratches can be seen all over her table top. A signed copy of the delivery document shows she accepted the furniture with no exclusions, and the driver said she was “picky as hell.” It's obvious she's not using a table cloth. Your shop tech says that if it was just lacquer, he could scuff it and respray it, but nitrocellulose lacquer over a catalyzed finish can cause the new finish to fail. The factory does not accept returns based on damage, and re-coating the table terminates the factory warranty.

   Reasonable options you have:

   In this instance, not many. In fact, from a cost perspective, none. You're in a stand-off with the customer. So you might consider offering her a gift certificate toward anything in your store. The amount would need to depend on the price of the table to create an incentive for her to come back and not be insulting.

   Table is within warranty but the legalese specifically excludes water and heat damage. What do you do?

How to Decide

There are three remedies that immediately come to mind when deciding how to proceed with a claim:

Repair. Repair, if amenable to the customer and possible, is preferable. For example, the customer finds a rub-through on the back of a dark brown, all-leather, $2,000 rocker-reclining sofa. She wants a complete replacement. There is one in stock, but you know that the repair will take ten minutes and will be imperceptible when done. No fumes, and durable as well. It's the cheapest option for you the retailer, and it's your job to sell the customer on the idea that it is also the best option for her.

Usually, a confident, strong voice over the phone will assuage any fears that it will look “fixed.” That same confidence in the home will make the customer feel reassured regarding the repair process and the skill of the technician.

Replace. Replace is always an option but should not be taken lightly. It comes with lots of associated costs. Consider the case of the same brown sofa mentioned above.

• Instead of being able to sell the one in stock, you now have a returned sofa that may smell like perfume or air freshener. The next customer will have to wait for their sofa which may take weeks to deliver.

• Depending on how bad the original sofa is damaged, it may require parts to repair. Are they available? How long will it take for them to come in? At what cost?

• Two people and a large diesel truck will be required to execute the exchange.

• The time spent by the clerical staff to track the service ticket can add up to several hours.

• Additional time will be required by the prep and management staff to make sure this one is “100 percent perfect” because it is a second delivery.

• The risk of a second failed delivery attempt is possible if your staff is new and inexperienced.

Refund. This last option is my least favorite, but it has its place. Refunding part of their money is something most retailers find egregious, but on occasion it might be the best solution. Sometimes it's what the customer is fishing for.

Risk. The risk with any of the above alternatives is that one of them will become your default for all service calls. “Give 'em $100, that'll shut them up!” But what is the goal of the service department? To sell the customer on the idea that the resolution suggested, which is the most cost-effective option for the retailer, is the best option for her.

Preparation for Success

Before a nation sends soldiers to war, they are trained to handle any emergency. They are armed with weapons they know how to use, taught how and when to react, and can operate as a unit so their responses and approaches are uniform and consistent. Soldiers are taught to follow a chain of command so that accountability and predictability are baked into every decision. It is remarkable how well the military management style applies to business. By training your support staff, you give them the best opportunity to represent you with distinction no matter where you are.

Sometimes it's easier to pretend that things are being handled the way you want, because service issues can be a real “buzz kill” when it comes to the excitement of retail furniture, but to be forewarned is to be forearmed. My good friend William “Willie” Vanderford, the operations manager for Red Knight Delivery in Clarksville, Tennessee, would say it over and over: You've got to set your people up for success.

About Peter Schlosser: Peter Schlosser is a warehouse and repair consultant who works with Profitability Consulting. Based in Winston-Salem, NC, he is passionate about quality, and “doing it right the first time.” Questions about this article or any repair/delivery topic can be directed to Peter at peters@profitabilityconsulting.com or 931-561-5488. Visit Peter Schlosser and the team on Profitability Consulting Group's brand-new website at http://www.profitabilityconsulting.com.