Chargebacks Are Not Fun

As if I had to state this, right?  For any newbies out there, a chargeback is when a customer disputes a charge with their credit card company and you, as a merchant, have to respond in writing your side of the story.  Disputes can arise for any number of reasons.  Things like proof of delivery, quality complaints, the product not being as expected all can result in customer dissatisfaction.  Ideally, the customer contacts you and gives you the opportunity to fix the issue, but sometimes they go straight to the credit card company and you’ve got a problem.

In my case, the customer did contact us.  We did everything we could to resolve the situation (in fact, we went above and beyond our policies to try to make things right) but the customer still wasn’t happy, so he got the credit card companies involved.

I truly feel bad about the whole situation, however I have put up a fight because I know that we are not wrong.  At this point, both the customer and I have written two letters explaining our sides, and I guess it’s up to the credit card companies to decide who wins.

I’ve felt sick to my stomach this whole time.  No matter what, I’ve lost a customer and maybe lost some money to boot.  This whole situation has really got me thinking about return policies.  Now just for reference, this was an order for personalized goods.  And the customer knew that they couldn’t be returned because they were customized to his specifications.

In his book, “The 4-Hour Workweek “, Timothy Ferriss writes that a store should offer a 100% return policy (plus return shipping!)  no matter what, and you will prosper in the end.

But, when you sell some goods that are personalized (and therefore not resell-able), how can this be done?  I’m just not sure.

I’d love to hear from some readers.  What are your thoughts on this?  What is your return policy?

Things To Look For When Hiring A Call Center

So you are going to make the move and upgrade your store’s customer service by hiring a call center?  Before you pull the trigger, here are some things to consider.

1. Do you really need one? This is a major commitment.  My guess is that there will be at least a 6 month contract.   There will be training, setting up a toll free number, and more.  Be sure that the volume of your store can support such an agreement.  For me, I made the decision when I was getting more calls and emails than I could respond to, and I felt I was losing more than I wanted, and hiring my call center was worth it to capitalize on the orders I felt I was losing.

2.  Training/Call Monitoring/Coaching – Any decent call center, large or small, should have programs in place to initially and constantly update their training of their associates.  They should be trained in telephone customer service in general, problem solving, and training on the individual stores themselves.  Additionally, they should have call center managers who monitor calls to be sure quality standards are met.  When they are not, they should have a coaching program to help the rep in question improve their performance.  Don’t be afraid to ask these questions to find out exactly how they train their reps.

3. Knowledge of Software System – This is important, but not as much as you might think.  There are tons of different kinds of store systems out there, and the back end software is different on all of them.  On one hand, it is important that the reps know how to use the software in question.  On the other hand the individual reps themselves may never need to even see your back end software.  Many call centers simply pull up your website, take the order from the customer on the phone, and key it into your site just as they were the customer.

4. Reporting – The call center should provide you with monthly reporting to reflect the reporting on your account.  The reports should be able to show how many calls came in and went out, the time and length of the calls, and the outcome.  This reporting will help show you how beneficial the call center is being for you.  If the report show a large number of calls ending in orders, the call center is probably doing you a great service.  If a majority of them are ending in just questions or tracking inquiries, you might want to look at your site to see how you can improve it to cut down on these calls.

5. Dedicated Person with the Ability to Take Assignments – Of utmost importance, in my opinion, is to have a point person for your account.  One main contact that you can direct any questions, issues, or concerns to.  If you find that the customer service reps are giving out some incorrect information, or any other mistakes are being made, this is the person that you will go to to make sure that the issue gets resolved.  This should also be a person who you can give some directions to (“I need customer #1234 called, their item is on back order.  Please find out if they can wait”).  Note that this person may or may not be the actual one to make the calls, but they should be the one to coordinate the effort and report back to you.

6.  Administration – In many cases, you can upgrade your call center agreement to include administrative responsibilities.  This is where you can really begin to save your time and effort by having a person that does a lot of your back end work for you.  In my case, it’s Lori.  Lori checks all my orders, posts all my tracking numbers, follows up with suppliers if orders don’t ship on time.  She fixes billing issues, calls customers when a mistake is made, and she handles the problem customers that ask to speak to a manager.  If I have any problems or needs, whatsoever, Lori is who I turn to.  She checks and take care of my email and forwards to me what is important.  I have given Lori permission to make most decisions herself, but calls me when something comes up that needs my attention.  When I go on vacation, Lori handles everything.

I absolutely don’t know what I’d do without my call center.  In a business that I work part-time (and obviously have a full-time career to tend to), it is reassuring to know that I have people there to mind the store.

Because I know you are dying to know, I proudly use Call Center Services from Solid Cactus.

Hiring A Call Center

In my previous post about customer service, I mentioned a call center as an effective means of customer service.  Most people think of a great big company when you mention a call center.  But believe it or not, there are call centers out there that don’t sell anything of their own.  They simply provide customer service for other companies.  It’s actually pretty common.  In fact, more companies use a third party call center than you’d think.  If they do their job, the customer shouldn’t know the difference between the company, and the call center.

So, what are the pros and cons of using a call center for your drop ship business?

PROS:

1. Availability – The hardest part about selling products is the need to be available when your customers are ready to buy.  This is why the internet is so great; your store is always open.   But what about those folks that want to call in.  They still don’t trust their credit card on the internet, or whatever.  A call center is there to answer the phone whether you are around or not.  They can take orders, answer product questions, give out tracking information, and more.  Typically, there will be a team of customer service reps that take calls for a number or stores.   This keeps the rates reasonable, by allowing reps to work for a number of stores at the same time.  You can, in some cases, have dedicated people, but my guess is that most drops shippers don’t really need that, unless you get really big.

2. Professionalism – Ever call to make a tee time at a golf course and get some old guy barking at you over the phone about the dress code?  Yeah, he doesn’t care of you show up or not. On the other hand, the representatives at a call center are typically trained in both customer service, and on the individual stores they are covering.  Plus they are trained in handling those problem, or upset customers.

3. No Need To Actually Hire People – Tell you what, it is expensive to hire people; and the hourly wage is just the beginning.  Using a call center allows you to have people who are paid and managed by someone else.  A beautiful thing.

CONS

1. Price – Obviously, this kind of work doesn’t come for free. While I’m sure that there are as many plans out there as there are call centers, you will need to carefully consider the fee structure to make sure it’s something you can live with.  In my case, I pay per minute that a rep is physically on the phone.  Considering most calls only last 2-3 minutes, and my average order size is around $80, I feel that I make out pretty well.  However, there will always be that customer that keeps a rep talking for 20 minutes and then not make a purchase.

2. Product Knowledge – You know your product best, and no one will ever be able to replicate that.  Consider your product line before hiring a call center.  If what you sell is complex or complicated, be sure that the call center reps can handle the possible questions.  I once had a guy that contacted me for advise on hiring a call center who sold airplane parts.  I don’t know what he ever did, but I hope he was very careful of his decision.  One thing that can be done to help in this situation is to be sure that you have very through and detailed product information on your site, which might cut down on the need of the reps to answer too many questions.

3. Loss of Some Control - Mistakes will be made.  You are going to have to be flexible.  By hiring a call center you are giving other people some control over your store and orders.  They will be forced to make some decisions on the fly, and they will make some mistakes that will cost you orders.  You simply need to decide in advance what decisions can be made without you, and what amount of honest mistakes are acceptable.  Remember there is a big pay off.  This loss of some control and some mistakes is easily offset by the amount of time you gain, and the improvement of service that you provide.

Next up, what to look for when hiring a call center.

By the way,  I proudly use Call Center Services from Solid Cactus.

Customer Service Is Never Part-Time

I often stress the need to provide the best customer service you can as a drop ship retailer.  As a drop shipper you are already behind the eight ball; you pay a little more for your products, you have extra fees, and you probably don’t have a big pile of money supporting your venture.  It’s hard to beat the big guys when it comes to these issues.  However, customer service is one place you can shine.  Most consumers recognize and search out good service, and many will pay slightly more to get it.

So this begs the question:  How do you give great customer service when you are starting out, and working part-time?  Believe it or not, there are many things you can do.

1. Site Design.  Great customer service starts with site design.  Most consumers will click around your site to find the answers to their questions before taking the time to contact you.  Take the time to give good and complete product descriptions to your items.  Make sure you have a detailed FAQ page and check it often.  If you are getting a lot of the same questions, maybe you need to add to it.  Be sure to clearly state shipping charges and return policy.  Finally, make sure all of this information is easy to find.  The more information you provide right on the site, the more likley your customer will answer their question all by themselves.

2.  Email.  The first level of customer service we all started with is a customer service email address.  Create a generic address for all customer service inquiries (service@mystore.com).  Be sure to clearly state when a customer can expect an answer and STICK TO IT.  This is also a great place to use an auto-response (Thank you for your email.  Our customer service team will review and respond within two business days).  People get fed up with customer service really quickly when claims and deadlines are not met.  If you say you will respond within one business day, then you better make every possible effort to do so.

3.  Phone.  Be it a toll free number or not, a phone number is a big and scary step for the drop ship retailer.  New retailers worry about being stuck on the phone all the time, or even worse, not being there when the phone rings.  They worry about being tied to the office when they don’t have the time to be, they are only working part-time, afterall.  These worries are not necessary, however.  Just make it clear on your site that the line is not manned, but they are free to leave a voicemail.  Then revert to the standard response time.  One word of caution, get a separate and dedicated line for the business, and make sure everyone in your house knows which line it is.  There is nothing worse than a customer calling and having your young kid answer!

4.  Call Center.  Eventually your call and sales volume will grow to a point that you really want to have someone answering the phone.  My advise is to find and hire a third-party call center.  Yes you can have professional customer service reps answering your customer’s questions and placing orders without hiring a single person.  I use Call Center Services from Solid Cactus. More about call centers coming soon.

5.  Tracking.  One of the easiest and most important  things you can do is provide tracking information.  The most popular call that customer service reps get is the classic “where’s my stuff” call.  Have your system send out emails that tell the customer their order has shipped and provide the tracking number.  Not only is this great service, but it lets the customer stop bothering you and start checking the UPS website to see where their box is.

Like any other part of the drop ship retail business, the key to customer service is information.  Give them information before they ask it, and let them know how to get help if they need it.  These simple steps will add to your business’ credibility.

Is the customer always right? Well, no.

While it is my goal and suggestion to do everything you can to please every customer, sometimes you simply can’t and have to stick by your guns. Here is something that happened to me over the holiday season.

One of my stores sells personalized goods. When a customer places an order, they type in what they want on the item. Obviously, the store’s policy is no returns on personalized goods. From time to time, I get a customer that lets me know that something was not personalized correctly and they want it done over. When this happens, I check the original order to see what happened. Honestly, most of the time, it is our mistake (misspelling or whatever) and we redo the order at our cost. My opinion, a good business practice.

My issue was with a customer who tried to blame us for their mistake. This customer ordered an item that had a monogram. As we all know a monogram is first initial/last initial/middle initial with the center initial larger than the others. We produced a product as the customer ordered and sent it to them. We got a note from the customer that the initials were done in the wrong order and they demanded that we redo it and overnight a correct item. Well I checked the order and we had done the item exactly as they ordered. Turns out this customer put the initials in the wrong order. I explained our policy and offered to send them a new item, at their cost, as the mistake was theirs. The customer went on to claim that the website was confusing (monogram vs. initials) and threatened to call their credit card company and contact the Better Business Bureau if we didn’t fix the problem. Knowing for a fact that we had not made an error, I dug in my heels. I sent an email explaining that it was their responsibility to make sure their order was correct in regards to the monogram. I pointed out that the item they ordered specifically requested they fill in the monogram they wanted. I even sited several other products on the site that asked for initials to prove that we had made every effort to minimize confusion.

So to make a long story short, I got an email back from the customer saying that it was unfortunate that we would work so hard to capitalize on an honest mistake and they sincerely hope that the profit we made on her order was worth it.

So who won here?  Answer: nobody. The customer didn’t get what they wanted and I certainly lost them as a customer for life. But I really felt that I had to set a precedent here. The error was after all their fault, and I am confident that had they actually contacted their credit card company and the BBB, that those organizations would have agreed with me.

Truth be told, had this customer started out by admitting fault, politely asking for me to make an exception, and left out the threats and demands, I probably would have sent her a new product for free.

What’s done is done, and I still don’t feel good about it. Would you have chosen to fight this battle?