Solve a Customer Dispute

[Mike K]

Alright kiddos! It's time for another installment of "What's fair!?" with your host Mike K. We're going to give you a scenario and you're going tell us... You guessed it! What's fair! The person we deem is the most fair wins an all expense paid trip to Elgin, IL. Ready? Here we go!

A customer buys a live streaming switcher from Mike's company for $10,000. The live streaming device is basically a rack mount computer with a bunch of proprietary cards in it. Mike's company tested it and it works well. Mike's company also offers a warranty on it.

Customer receives it and says it's not turning on. That's not good! After going back and forth over what to do the customer ultimately decides to return the device. He has his assistant ship it. His assistant used almost no packing material, packed the items loose in a hard pelican case and didn't insure the package. His assistance packed this...

On top of this....

Things ended predictably bad. The keyboard (control surface) suffered extensive damage and that pretty joystick in the pictures was torn right off as were a bunch of buttons. The actual rack mount computer suffered much worse. The device weighs about 40lbs and it bent in half, slightly though it was indeed in half. Here's a picture of that:

The upside is this all happened about 6 weeks ago and the customer has acknowledged their error and isn't telling us to pound sand. He understands this is going to cost him some coin. The bad news is the manufacturer just returned the unit to us as salvage and said that while they can replace the obviously bad motherboard, they have no idea what's going to be broken beyond that and all of the boards beyond the motherboard are proprietary and expensive. They referred to my $15,000 switcher as salvage. No Bueno.

So here's where we stand:

The control board I was able to fix for $150 and can re-sell to get about $3500 back. That leaves me down $6500 for the rack mount computer itself which is the meat and potatoes of the setup. I don't expect him to eat the $6500, largely because had he received the unit and it functioned in the first place, he never would have had to return it. That's an argument he's mentioned and it's a great point despite the fact that it did work for us. Sometimes things decide not to work at awkward times.

So that said, what's fair? From $10,000 I can sell the control board for $3500 which brings my loss to $6500. From there I can probably get $1000 for the broken rack mount unit which brings my loss to $5500. How much of that $5500 should he be on the hook for and why?

Click to read more...

 

[ChrisRac]

Was the unit refurbished in the first place? I only ask because you said you tested it before sending it out.

 

[Bob Kazamakis]

Does your return/warranty policy have any stipulations on insurance? That's insane to ship something worth so much with zero packing material and no insurance

Let me guess, they also shipped ups?

 

[DanJ]

Was it Joe Rogan? They had a problems with their tricaster a while ago.

 

[boostedguy05]

All returns and credits are subject to inspection. The customer doing the return is liable to insure the shipment as he is then the shipper and you are the receiver the receiver is never on the hook for a damaged shipment.

Let him sell it to cut his loss.

 

[CMNTMXR57]

I'll save you money, I'm already in Elgin.

Was there any insurance on the shipment?

 

[Gamble]

Customer is responsible for all costs minus what you can sell it for

 

[Great White Drake]

Ship it again, broken already, with insurance.....Oopsie.

Is this a returning customer? First time? Is there a possible future sales relationship with this customer?

If the item was broken, why were they responsible for the shipping charges? You would've put insurance on it I'm sure.

 

[importcrew]

What's your warranty and any other policies for customers?

 

[Blood on Blood]

Sounds as though you may be taking him to court

 

[VenomousDSG]

Sounds like the customer is a complete moron...... Ive eaten loses like that on items i've sold to people and had the items shipped back to me, but nothing of value like that. For $10,000, there's no way he'd be getting a refund if i got it back in that condition. With no insurance on the shipment and packed like that.

 

[IZZy]

The moment he decided to not insurance is when he became liable for any damage to the item, he should be liable for the remaining amount of money after you sell what you can to recoup your investment

 

[OffshoreDrilling]

Sounds like you need to have some sort of policy about return shipping requirements or pay for them to drop it off at a UPS store and have them package it at your expense once you get into pricey gear.

I'd offer to split the expense 50/50 of whatever repair or replacement costs end up at and go from there.

 

[Dan00Hawk]

I get that had it worked for the customer from the get go, this wouldn't have gotten to this stage. But considering that they returned the item with no packing material and essentially destroyed it, they have to bear a portion of that responsibility as well. If they ordered an expensive vase, received the wrong one, and then returned it with no packing and it disintegrated, they would be responsible for that as well, right?

I'd say that it would be reasonable to go 50/50 on the loss/costs. That way it sucks equally for everyone.

 

[Mike K]

Was the unit refurbished in the first place? I only ask because you said you tested it before sending it out.

Tested but not refurbished.

Does your return/warranty policy have any stipulations on insurance? That's insane to ship something worth so much with zero packing material and no insurance

Let me guess, they also shipped ups?

No, generally we pay for return shipping but in this case he went outside of eBay's return system and shipped it himself.

Was it Joe Rogan? They had a problems with their tricaster a while ago.

lol no.

All returns and credits are subject to inspection. The customer doing the return is liable to insure the shipment as he is then the shipper and you are the receiver the receiver is never on the hook for a damaged shipment.

Let him sell it to cut his loss.

I would agree normally but I do think we bear some of the responsibility since he did receive it non-functioning.

I'll save you money, I'm already in Elgin.

Was there any insurance on the shipment?

No.

Ship it again, broken already, with insurance.....Oopsie.

Is this a returning customer? First time? Is there a possible future sales relationship with this customer?

If the item was broken, why were they responsible for the shipping charges? You would've put insurance on it I'm sure.

Not a returning customer likely. They barely speak English and much of our correspondence has been through an interpreter/ friend. Normally we would pay for shipping but in this case he shipped prior to us discussing it. It's important to note that insurance in this case would have been useless. Insurance doesn't protect you from bad packing. In fact, insurance covers you from scenarios that basically never happen. A package that is truly lost or severely damaged. For most packages if an item is damaged, even if the box is damaged, it means it wasn't packed properly. We've sold a metric buttload of gear, some of which has been treated brutally by the shipper and I've never had something damaged in shipping.

What's your warranty and any other policies for customers?

On this item is is 14 day inspection/ return for cash. 30 day warranty. He reported the problem basically immediately.

Sounds like the customer is a complete moron...... Ive eaten loses like that on items i've sold to people and had the items shipped back to me, but nothing of value like that. For $10,000, there's no way he'd be getting a refund if i got it back in that condition. With no insurance on the shipment and packed like that.

Agreed to an extent. Again though, important to note that insurance wouldn't have saved him here. They inspect the packages and the moment they saw the packing job they would have denied him.

The moment he decided to not insurance is when he became liable for any damage to the item, he should be liable for the remaining amount of money after you sell what you can to recoup your investment

Damn. You guys are tough!

Sounds like you need to have some sort of policy about return shipping requirements or pay for them to drop it off at a UPS store and have them package it at your expense once you get into pricey gear.

I'd offer to split the expense 50/50 of whatever repair or replacement costs end up at and go from there.

You like to assume that someone that is both smart enough to use a piece of equipment like this AND afford it would also be smart enough to know that you can't pack it like this. I can't reconcile that an intelligent person would do this. I can't control how people ship stuff though and as if I was predicting the future, before he shipped this back I specifically mentioned to him how important it was that we receive it in the same condition it was received and to pay special attention to packing.

As for the repairs, Initially that was exactly my thought. In fact, it was better than that. Since he received it defective I was going to pay for everything up until $1000 and then split the remainder with him 50/ 50. Unfortunately the manufacturer says the device is not-repairable.

I get that had it worked for the customer from the get go, this wouldn't have gotten to this stage. But considering that they returned the item with no packing material and essentially destroyed it, they have to bear a portion of that responsibility as well. If they ordered an expensive vase, received the wrong one, and then returned it with no packing and it disintegrated, they would be responsible for that as well, right?

I'd say that it would be reasonable to go 50/50 on the loss/costs. That way it sucks equally for everyone.

I agree.

I'll be honest, I was thinking of just chopping $2000 off the refund and eating the rest and I was afraid even that was too much because at the end of the day he's gotten nothing and he's losing $2000 for something I think he can easily justify as not his fault. From his perspective I'm sure it's easy for him to say "well if it would have worked when I got it we wouldn't be here". But now I'm thinking along the lines of splitting the loss with him 50/50. So basically $2750 chopped off the return of $10,000.

I should mention that this all through ebay so I need to tread lightly. If I demand too much he might just open a case and if he opens a case it's all or nothing. Either they deny his return completely or they give him a full refund. And since I already have the unit back they are very likely to demand I refund him, regardless of the damage.

Also, I want to be fair. There is a sliver of a chance I could replace the motherboard in the unit and it will fire up but at this point the guy has been waiting for 6 weeks so I want to give him closure right now instead of speculating on a future repair that may or may not happen.

 

[CMNTMXR57]

You're being way to generous man...

 

[Fish]

Sounds like you need to have some sort of policy about return shipping requirements or pay for them to drop it off at a UPS store and have them package it at your expense once you get into pricey gear.

I'd offer to split the expense 50/50 of whatever repair or replacement costs end up at and go from there.

I would agree here as well.

 

[boostedguy05]

What is your cost on the items. Make it as close to yuour cost as you can. The price is 10k, but I doubt that was your cost, you are a smarter business man than that.

 

[Flyn]

Can you "sell" him something of more value to him and less value to you that would mitigate some of his loss? A repeat sale under these circumstances might go a long way towards building a repeat customer. Something like: "I understand your loss on this sale and would like to toss in/sell you something that may help you. I want a satisfied customer and want you to be a repeat customer."

Sounds like both of you understand the liabilities so you should be able to find an amicable arrangement. Ask questions and communicate as much as possible to get a read on him.

Improve your legal jargon on your site. Maybe write out what you want it to say and hire an attorney to make it legal? The more circumstances you can cover (without having pages of legalese), the better for future issues.

Good luck, Mike!

 

[Bob Kazamakis]

I mean, yea it arrived "not working" but it could of been something so simple and cheap. Now you have no idea what it was.

 

[IceCreamAssassin]

I bet it worked fine and he just changed his mind, then packed it like crap so you would never know....

I'd say 50/50 is as fair as I'd go. Regardless if it worked or not by permanently damaged it and you are being over fair buy paying 50% of obvious negligence.

 

[sickmint79]

i used to buy and sell a lot of car and home audio gear. the minimum any home audio gear i dealt with was $500 when new and it certainly averaged over $1000. i couldn't fathom how people who could afford this would send equipment so poorly packed. one time i remember a bunch of adcom equipment was just stacked on top of eachother and there wasn't a peanut or paper or bubble in sight. funny i also just visited their website and their products look the same lol.

i don't find the "it wasn't working" much of an excuse. fine, then insure it for 7k instead of 10k. does ebay have a policy in place for uninsured items? and at these values?

hard line he's responsible for the loss. i think it's quite fair/generous for you to do the selling work and split the remaining hit. given your potential to lose everything via ebay, or luck if a mobo replacement works and it's back to operational, i think your 50/50 solution is fair.

 

[Mike K]

Can you "sell" him something of more value to him and less value to you that would mitigate some of his loss? A repeat sale under these circumstances might go a long way towards building a repeat customer. Something like: "I understand your loss on this sale and would like to toss in/sell you something that may help you. I want a satisfied customer and want you to be a repeat customer."

Sounds like both of you understand the liabilities so you should be able to find an amicable arrangement. Ask questions and communicate as much as possible to get a read on him.

Improve your legal jargon on your site. Maybe write out what you want it to say and hire an attorney to make it legal? The more circumstances you can cover (without having pages of legalese), the better for future issues.

Good luck, Mike!

Nothing else I could sell him, no. There's no improvement in legal jargon that can cover me here. These are the risks you take. I could have all the legal jargon I want but eBay's policy supersedes anything I say at the end of the day and they heavily favor the buyer, so much so that it's really pointless for me to sell anything like this on their platform any longer. They offer me basically no protection in cases like this. I am almost entirely at the buyer's mercy.

 

[Atomicles]

If your warranty doesn't cover damage during shipping, I don't see why you should have to pay for that. If he shipped it without discussing it with you first, he should be the one to bare the cost of damage during shipping. Especially when his packaging was negligible. Salvage what you can and have him pay the rest. Better yet, got any lawyer friends you can ask? They may be able to tell you. Or maybe try posting on a law advice forum.

 

[Grabber]

I spent a few minutes reading through the fine print of eBay's return policy.

http://pages.ebay.com/help/sell/return-process.html

Basically, you have to have return conditions on your eBay sale page. There are things mentioned if a buyer uses alternate shipping outside of what eBay suggests and the package arrives damaged, they advise to have eBay step in.

It clearly states eBay will instruct the buyer to insure the product if it is over 750 and also make the shipment a signature required.

Do you have any photographs of the unit prior to you shipping it to the customer? Proof it was new when you sold and shipped it?

I photograph everything I pack at work prior to shipping it so the customer doesn't have a leg to stand in if they claim it is damaged.

You're being way too generous here. He can open a case, but if you have relevant pictures and proof of what you sold and can identify the buyers negligence that he shipped an item back of this dollar value uninsured and outside of eBay's recommended channel, you may have something going for you.