Dealing with unhappy customers can be one of the most frustrating parts of running a business. Refunds or discounts are the easy solution. But before you offer a refund, let me share a story that recently happened to me at an upscale restaurant.

On a recommendation, my friend and I decided to split one of the restaurant’s famous ten-dollar gourmet hamburgers (got to watch the calories). We ordered it well-done. When the burger arrived, the meat was still pink inside. Not being a picky eater, I kept the burger, and my friend ordered a second one.

Then the trouble began.

As we waited for what seemed like an eternity, my friend began to find other faults with the restaurant – no silverware, snotty waitress, crud on the mustard bottle lid. Finally, she’d had enough, and asked to see the manager.

After she recounted the story of the bad hamburger, the manager said, “I’m sorry. I’ll adjust your bill.”

Then the trouble really began.

My friend was insulted that a refund could “fix” the problem, and began to list to the manager all the other faults she had noticed with the restaurant and its service, how we’d come on a recommendation, how disappointed she was, etc. In the end we paid for a single burger, and now everyone she talks to knows where not to go for dinner.

As a business owner or manager, the simplest solution for dealing with an unhappy customer is to offer a refund. However, it is rarely the best solution. It costs you money, and you lose a customer.

Instead, when dealing with an unhappy customer you should ask, “What can I do to make you happy?“ This question has three goals:

• It forces the customer to think about what they are really unhappy about, not just what they are complaining about.
• It gives you an opportunity to save the relationship and perhaps even keep the customer.
• It reduces the chance the customer will bad-mouth you to their friends (other potential customers).

While I cannot guarantee this approach will work with every unhappy customer, I can guarantee offering a refund won’t do your business any favors. My friend can vouch for that.

Tags: business, word of mouth

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This entry was posted on Friday, October 16th, 2009 at 4:19 am and is filed under business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.