Customer complaints are a part of life when running a business, and it doesn’t matter if you’re a freelancer, a startup, or a multimillion-dollar corporation. Some people are just going to be unhappy with your service, your products, or your behavior.
The only major difference when it comes to complaints comes from the way you handle the situation. After all, there’s a solid reason why corporations invest heavily in specialized lawyers and high-end customer service.
Still, not every business owner can afford such expenses, so it all boils down to knowing how to deal with a complaint that may turn into a payment dispute (if it hasn’t already).
Moving forward, we’ll have a look at valid and invalid disputes and how to handle the situation in both scenarios. We’ll also put a bit more focus on how to resolve a dispute where the customer is right since mistakes can (and do) happen.
Customer complaints are a sign of miscommunication. On one side, it could be that you misrepresented your product or service, creating false expectations.
On the other side, the customer may have read your product presentation wrong and assumed a different usage for it. Plus, there are situations when both these scenarios are possible.
Now, some customers may try reaching out in an attempt to solve this problem amicably. They’ll send you an email, call your customer support line, or post a comment on your website expressing their dissatisfaction.
At this stage, you can still clear things out with the customer and win back their trust. If you handle the situation well, you can make full use of the service recovery paradox where customers’ satisfaction with the brand increases after you’ve solved their problem.
Valid vs. Invalid Disputes
Sadly, not every situation can be solved amicably. Part of your customers may go right to the source and file a payment dispute with their bank. In this case, the bank becomes the moderator between your company and the client and decides if it will accept a chargeback on the payment or not.
In this scenario, it’s about deciding whether the payment dispute is valid (the customer is right) or invalid (the claim is fraudulent).
Overall, the payment dispute process is more difficult to handle and it impacts negatively both the customer and the merchant.
Still, regardless of your situation, there is still some hope left, so let’s focus on how to make the best out of an unpleasant experience.
Good communication skills, conflict management, and problem-solving are lifesaving skills if you want to run your own business. Coincidentally, these are the same skills that can get you out of a tough situation when it comes to complaints and disputes.
Also, since this type of scenario often comes from an emotional place (the customer is angry and you are defensive), it helps to have a step-by-step system to follow. This way, you’ll manage to stay calm and lucid while talking to an emotional person.
Here are some of the steps you need to follow to diffuse the situation and maintain an open line of communication (where possible):
#1: Listen & Understand
Regardless of the fact that you think the customer is right or not, it’s important to listen to their complaint. Also, in the case of a payment dispute, ask the bank for details regarding the reason invoked by the customer.
If you talk to the person directly, show empathy and promise you will look into the situation to get all the facts.
#2: Actually Look into the Situation
Gather your data and compare it to the complaint. Who is right and where is the mistake? Whether you talk to the customer or the customer’s bank, be polite in your reply and present your findings with attached proof (avoid being confrontational even if you are right).
#3: Offer a Solution
Regardless of the results, find a solution to the problem. If it’s your mistake, apologize, refund the money/ accept the dispute, and try to leave the door open by offering a discount for a future order.
If it’s the mistake of the customer, help them or their bank understand. If it proves to be an intentional fraudulent dispute, refrain from doing business again but remain polite in your communication.
The best way to solve conflicts in business is through diplomacy and calm. By being polite and showing empathy, you can win over a customer even if it’s your business that was in the wrong. However, if you are confrontational and rude, there won’t be any room for communication and/or negotiation.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.