The Customer is NOT Always Right

Contrary to Popular Belief - The Customer is NOT Always Right

I know this flies in the face of things you have been told over the years, but what I am saying here is absolute truth.  There are times when the customer is simply WRONG.  This applies to every business.  Years ago, and I'm referring to the 60's so maybe I should say decades ago, the incorrect or wrong customer was clocking in at about 1%.  Now, with a bad economy, a negative shift in public sentiment toward business, and a lowering of moral standards, the number trends greater than 3% and some estimates show it could easily be as high as 5%.

So what are these wrong customers doing?  Some are stealing, you know, shoplifting.  Others are returning used items.  Some buy things on sale then try and do a return at regular price.  There are those that are writing bad checks.  There are those that claim faulty merchandise and then take legal action.  We can't forget the ones who are drunk and/or stupid.  

I've been both a business owner and a consumer and I know what's on both sides of this fence.  In defense of Joe Consumer, it's only fair to point out that a very small percentage of businesses are operating on shaky ground.  A bad business is no better than a bad customer.  

Here are some true stories about a very small percentage of people I know. 

This first one is a family story.  I'm sure their kids are grown now and I haven't seen any of them since 1983.  This family had no moral compass.  The parents taught their kids how to shoplift.  Worse still, they bragged about it.  When it was time to go back to school shopping, the went 'back to school shoplifting'.  The five finger discount was a way of life for them.  In this case the customer is not only wrong, but criminal.  When bragging about their theft, they would justify it by saying they only stole from big chain stores, like K-Mart.  Hummmmmmmmmmmm?

I was working in a department store and became part of this next story.  Actually, I'm part of several stories I'm going to tell here and this is one of 'em.  This department store had a record area and sold both 45's and albums.  Everyday after school the record department got swamped with school students and a few of them were up to no good.  We caught a 14-year old girl stealing a 45 record one Friday.  We prosecuted her and ended up in Juve Court.  Her parents, who weren't with her at the time of the theft, verbally defended her by saying, "Our daughter wouldn't do that.  She goes to church every Sunday."  I said to the judge and her parents, "We're not here about her going to church on Sunday.  We're here because she steals things on Friday."  There were three witnesses to the theft.  The parents lost and had to pay $.79 plus court costs.  This wrong customer was barred from the store.  

At one time we owned a waterbed store.  We had a vendor write us a bad check.  In this case the vendor became a customer.  Correction, the vendor became one of those wrong customers.  The check was for 300 plus dollars and I never screw around with anybody that ever wrote me bad paper.  I simply go after them - legally and with everything I can.  It took a while because this jerk tried every trick he could think of to beat this.  Eventually, I got a judgement against him and put a lean on his house.  

I was manager of a video duplication business and one our occasional customers wrote us a bad check.  I immediately went after her.  The check was less than $75 bucks and anything that small gets back burner treatment.  I waited patiently knowing my time would come and it did.  After a couple of years she came back to get some additional work done.  I accepted her master tape, completed the work and told her she not only had to pay for the work in cash, but also pay for her bad check and processing fees.  She was livid.  She informed me her husband was a lawyer.  I told her if that's the case she should know not to write bad checks.  She screamed at me.  I didn't care.  She told me she would take her business elsewhere.  I told her to please do that.  I laughed.  She got more angry.  Bottom line - this wrong customer paid up and went away, never to come back again.  

Chalk this next case up to drunk and stupid.  A person I, at one time, worked with was drinking in a bar one snowy Pennsylvania January.  His bills from Christmas were coming in and he was short on money.  He was also very drunk.  He wanted a fight more than he wanted money and he THOUGHT he figured out a way to get both.  He had bought a Sears Craftsman lawnmower during early spring and decided on this cold winter night to return it to Sears and demand his money back because  he said it didn't run correctly.  He went home, got the mower, and it was off to Sears.  Even though he was drunk and stupid wrong, he was determined.  He went into Sears with the mower and without even questioning why, Sears refunded his money.  Of course he was looking for a fight and that made him super mad.  He went back to the bar and got his fight.  Oh, he also got hauled to jail.  

My wife was managing a nationally known woman's clothing store.  One of her customers bought a dress on Friday and returned it Monday saying she decided she didn't like it.  Unfortunately there were sweat stains on the armpits showing it had been worn.  That wrong customer did NOT get a refund.

The department store I mentioned earlier had a customer try and return a special order item that we never stocked or even ordered.  In addition to arguing he bought it there, he insisted that the fact he was a dentist somehow proved his honesty.  Of course, he didn't have any sales slip.  He ended up writing the company telling them I should be fired for not refunding his money.  He told them I was rude and arrogant.  I had a meeting with the owner of the business and I went over our entire inventory and special orders for the time period in question.  I proved we never stocked nor ordered that particular item.  I had drilled holes in his argument for a refund.  I kept my job and he NEVER got a refund.  Customer - Wrong. 

Now here's a true story where I am the customer and you could make the case that I am WRONG.  Let me tell you the story and you tell me - Am I Correct or WRONG?

This happened six years ago and I have not been back to this business since the incident.  A local casino gives points for your play on what is called a players card.  These points are good for play, food, and things like that.  Neither my wife or I are big players and it takes us quite a bit of time to build up points.  Over the course of several years she built up around 3500 points, which is less than the amount needed for one Sunday Buffet Brunch.  The casino in question decided to build a parking garage and messed up most of the outdoor parking in the process.  While they were building the garage we didn't visit the property because the parking situation was such a mess.  During the build-out she got a letter telling her she hadn't visited in quite some time and if she didn't visit within X number of days her points would be relinquished.  The parking lot was still a mess so we didn't visit.  After the parking structure was finished we visited and inquired about the points.  We were told they expired and we were out of luck.  I explained the only reason we hadn't visited was because of the messed up parking.  They didn't care.  Long story short, if they didn't care about an issue they created, we no longer cared enough to play there.  We haven't been back in more than six years.

Now for the big question - Is my boycott of that casino justified or am I just another wrong consumer?  Comment and let me know what you think.

© Krystalco LLC 2012  Any publication or reuse of the information on this blog, in part or whole, without express written consent is prohibited.

Is Gold Right For Me?  - or - The Gold Nuggets of Truth on Buying Gold

You've probably seen the commercials and are familiar with the company names like Goldline, Merit Financial, Rosland Capital, Lear Capital and all of those other hucksters of precious metals.  You've heard those amazing pitches like, "And you can't print gold."  Of course, you can't print gold - gold comes from a mine.  Likewise, it could be said, "And you can't mine paper currency", because it's the reverse of the 'can't print gold' statement.  I love this next quote, which is totally inaccurate, "And gold has never been worth zero."  Wrong!  Before it was discovered and used as a precious metal it had zero value.  

Okay, now I'm getting somewhere.  Let me expose the myths of investing in gold.

Let me start with a history lesson.  During the late 1970's (I know, you weren't alive then.), Jimmy (the Peanut Farmer or Peanut Brained President) Carter was running the Oval Office.  It was during his lackluster years that we had hyper-inflation and interest rates on mortgages shot upwards of 13% or more.  Gold went on an upwards price run and it seemed like the balloon was never going to land.  If nothing else, Newton's Law should have reminded everybody that what goes up must come down, but when everything around you seems not to make sense, as it happened during that period, logic goes out the window.  There was an Arab Oil Embargo and lines to buy gasoline started building.  Then there were those nasty price increases along with a form of gas rationing.  Grocery prices went up and pay increases were hard to get.  We added soy to hamburger to get more of a yield per pound.  Oh, those good old days. 

Let's get back to that gold thing I mentioned.  In 1970 gold was trading at around $36. per ounce.  By 1/2 way through the Carter administration (1978) gold had shot to a high of $196 + change per oz.  Fear continued to run rampant while Carter was in the White House and by the end of his 1 term gold was trading at a record high of more than $615.

I had a friend that got caught up in the fear of that decade and the gold frenzy.  He took his life savings, which at that time was around $35,000 and sunk it all in gold.  I'm thinking, 'Don't do it.  Dumb move.  Gravity.  Gravity.'  When he jumped in with all he had gold was at the $600 mark.  Then along came a new president with a new vision and interest rates settled down, the Carter recession was in reverse, gas prices leveled, the nasty hostage crisis in Iran was resolved, unemployment went down, and it seemed as if all was right with the world.  Oh, except the world of gold, which took a dump.  A very hard dump.  By 1981 gold had dropped to $460.  By 2001 gold was trading at $271.  My friend continued to hold the gold.  By early 2007 gold was back to $615.  So after a 27 year investment in gold, my friend, due to a combination of fear and/or greed ended up with a measly 3% profit.  I doubt he could have made a worse investment. 

In May of 1985 Apple Computer stock sold for less than $2 a share.  As I write this it's trading for $615.  If my friend would have invested in Apple in May of 1985 he could have bought 17,500 shares which would have netted him a cool $10,762,500 during that 27 year period of time.  Who knew?

So before you plunk your hard earned bucks in precious metals what do you need to know?  These are the relevant terms - 1) the Ask 2) the Bid 3) the Spread.

When you call a gold broker, the ask is the price you pay.  The bid is the price the they will pay for your gold.  The spread is the important number.  It is the % difference between the ask and bid.  It's the area where the gold broker makes profit.  The higher the price of gold the more profit there is for the broker.  Get this - the spread varies often between 20 to a whooping 35%.  Oh, and there is usually a 1% broker fee on any sale.

Oh, another hidden gem in all of this is some brokers will try to get you to buy specialty gold coins with even a higher mark up.  These are called gold collectables which are highly profitable for the broker and of questionable value for YOU.  Buyer beware.

Let me simplify all of this for you.  Let's say for this equation gold is selling for $1500 and you buy 1 oz.  With the addition of the 1% brokers fee paid on both the buy and sell you would be paying $1515.  If you then decide to sell it back you'll be selling it for (using a 30% spread + 1% broker fee totaling $465) $1035.  For you to sell the gold back and make only a $3 profit (that profit would = 2/10 of 1%) that same gold would have to jump in price to $2200 or nearly a 48% increase over the initial price of $1515.

So then how long does it take gold to move that much?  Between 1850 and 1933 it moved about 48%.   Oh, quick math will tell you that 83 years.  It moved that much again between 1933 and 1968 or 35 years.  It only took 4 years to climb 48% after 1968.  Between 1972 & 1973 there was another 48% gain and again between 1973 and 1974.  There were some crazy upward trends between 1975 and 1980 and then El Crapo met El Bladeo (the s#^t hit the fan) and the plunge was on. 

By 2006 the trend was upward again and all of the gold hustlers, much like termites, were coming out of the woodwork.  2006 to 2009 saw a 48% jump and between 2009 and early 2012 it happened again.

Keep in mind it's not the short times of gold prosperity to watch for but the long times of inactivity that hurts.

As of late gold buyers have been heading for the exits, again.

Oh, and all that glitters with those brokers is not gold.  Scott Carter the spokesperson for Goldline of which he was a major part, got in trouble with the FTC last year and had to pay back millions in refunds.  Some how, some way these same players keep resurfacing.  Carter is now the front man for Lear Capital.  And the game continues.

The new gold is now silver.  You are now hearing that push but it's still the same game and the same rules apply.  Beware of the spread.  Read the fine print (always!).

One final thing to remember - "You can't print gold."  LOL

 © Krystalco LLC 2012  Any publication or reuse of the information on this blog, in part or whole, without express written consent is prohibited.