Lying to and generally abusing customers has been around as long as business has been in business, but we seem to have reached a point at which we are so casual about it that it that it goes unnoticed most of the time. There is the garden variety bait and switch that is an art form in retailing, but at which Kmart has become especially adept – which may explain their financial condition. In this ad for the upcoming Black Friday sales, you are offered a 32" Sony Hi Def TV for almost a hundred bucks below what you will pay anywhere else – but they are only going to have 4 of them in the store and they won't order another one if you aren' among the lucky 4. In fact the circular is chock full of great deals, but they only have a couple of each item. Safe to assume the rest of the TV's for sale at KMart aren't at quite the same discount. Advertising stuff that you know full well will not be on the shelf when 99% of your customers get to the store strikes me as lying – but that is the way advertising is handled these days.
In a similar vein, some British coffee outfit is putting up signs proclaiming that 7 out of 10 coffee drinkers prefer their swill to Starbucks. In the fine print, however, it turns out that those results only apply to cappuccino. Presumably the folks in the sample did not have the same feelings about the rest of the merchandise.
Incredible as it seems, when you see an ad for the happiness of cows from California, the cows in question, and lush backgrounds in which they are grazing, are actually New Zealand cows. Cheaper, it turns out, to go all the way to New Zealand to find some happy cows than to film the cows owned by the very people who fund the ad. I think that when they show a picture of a cow and call it a California cow, it should actually be a California cow, although I have absolutely nothing against New Zealand cows. I just think the truth ought to figure in somewhere.
The best, however, is Mr Steve Jobs– Fortune magazine's CEO of the Decade, and quite a wealthy man by all accounts. It seems Steve does not approve of smoking – or maybe he is just fine with it, but saw the anti-smoking fever as an opportunity to turn a fast buck and throw a few more coins onto his sizable pile of them. Either way, deciding to unilaterally stop performing warranty repairs on Apple products owned by people who smoke because the repair techs might be exposed to second hand smoke is the same thing as stealing.
I am not advocating smoking, mind you, and I do not deny Mr Jobs the right to feel however he chooses to feel about the matter, but when you take money from people for a product that includes a warranty – then decide that you are not going to honor the warranty - that makes you a thief. He could just announce that he will refund the money any smoker paid for a Mac if he feels that strongly about it, or he could hire technicians who smoke and presumably don't share his terror at the thought of exposure to a little used nicotine to do the repairs, or he could buy all of the repair techs those white suits the toxic clean-up guys wear if he really thinks it is that dangerous. There are a lot of things he could do, but 21% of Americans still smoke in spite of Steve's opinions and I think it is safe to say that about 21% of the Mac buyers smoke. To void their warranties after they shelled out good money either because the CEO of the Decade does not approve of their lifestyles, or simply because it saves 21% of the money Apple spends on warranties is an abuse of customers that even surpasses lying about the ethnicity of cattle.
In any event, none of these approaches to doing business are going to pay off in the long haul. People will go into KMart and find that they have been lied to, folks will but Costa coffee and decide for themselves that Starbucks is better, folks everywhere will drink California milk and realize that it came from a cow with such a bad attitude that she would not even appear in a commercial, and 21% of the Mac crowd will say 'screw you' to Steve Jobs.
In the long haul, being open, honest and fair to customers is the only way to succeed. And Steve Jobs can preach all day long about his commitment to and knowledge of his customers, but the 'CEO of the Decade' ought to honor a warranty once he sells it to someone.
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Since I wrote this I received the following email from Jennifer Giambroni from the California Milk Advisory Board:
I wanted to clear up an error on your recent blog post – “The Ethnicity of Cattle and Other Matters.” The popular “Happy Cows” campaign is pivotal in helping to raise awareness for California milk and dairy products that carry the Real California Milk Seal. These cows and all shots of California pastures and farms were entirely filmed and will always be filmed and produced in California. The California Milk Advisory Board (CMAB) has never and will never misrepresent our industry and our dairy farms and families in that way.
This year we switched our advertising focus to a new “Auditions” campaign with UNhappy cows from around the world auditioning for the chance to come here to become California Happy Cows. This new campaign does not show any California Happy Cows, therefore the CMAB made an economic decision to film four days of footage at a sound stage in New Zealand. It is important to note that all of post-production work – editing, music, effects and animation – will still be conducted with California production facilities. That means 6-8 weeks of work for each of the 10 commercials.
The dairy industry is facing its most devastating year since the Great Depression – we’ve lost 10% of our family dairy farms this year alone. All funds that pay for this campaign come from the dairy producers themselves and the money we will save on this small amount of production work means we can create more commercials touting California dairy (and in reality, California itself).
As Californians, we understand the critical importance of keeping as many jobs in our state as possible. That’s why more than 90% of our advertising production dollars will be spent in California next year. We value the pool of creative resources based in our state and we will look to maximize the use of these resources in the years to come.
david foster says
The Apple thing seems more than a little unhinged.
I wonder if it’s only the health of the repair tech that they’re concerned about, or the health of the computer? Maybe they’ve found that fans & disk drive tend to fail more often when they live in a smoking environment, and are trying to reduce their warranty costs.
In any event, I don’t see any excuse for adding after-the-fact qualifications to a warranty.
(Disclosure: Apple shareholder)
William Pietri says
I too thought the Apple thing was crazy, at least until I read a number of comments from PC techs saying that too much smoke damaged the machines and made them expensive to work on:
http://consumerist.com/2009/11/smoking-near-apple-computers-creates-biohazard-voids-warranty.html
(Scroll down to the comments, like the ones from coan_net, endless, and Andyf.)
Smoking near a computer may be reasonable, just as drinking or eating is. But if any one of those actually damages the computer, I’d say that shouldn’t be covered by warranty.
Of course, there’s a terrible customer service problem here; the customers should get consistent explanations, a demonstration of what’s wrong, and tips on how to smoke near their computer without wrecking it. But if the techs were truly denying repair due to user damage, I think that’s perfectly reasonable customer service.
Bill Waddell says
Interesting comments on the site you linked us to, William. What troubles me is that smokers use cell phones, big Screen TVs, and computers from companies like HP and Dell – yet only Apple products seem to suffer from second hand smoke damage sufficient for Jobs to void his warranties.
Jim Fernandez says
It said in your referenced article:
“When I asked for an explanation, she said he’s a smoker and it’s contaminated with cigarette smoke which they consider a bio-hazard!” Bio-hazard?? Does that mean they are forced to call out the EPA? And issue a citation to the computer owner? I’ll bet that happened in California. LOL
Wow, I did not realize that KMart or any store would have so few of a black Friday sales item. OK, so how do you sell 4 TV’s to 1000 excited and eager shoppers? Sounds like a dangerous situation to me. (Can a person be arrested for yelling “fire” in a crowded room? Can you get arrested for yelling “only 4 TV’s” in a crowded store on black Friday?)
Jason Morin says
Bill,
Your definition of lying must be different than mine. I looked at the Kmart ad and it clearly states that the TV is available for 5 hours at the discounted price and they will cary a “Minimum 4 per store.” That means they will have 4 units when the doors open and most likely those items will sell out in the first 2 minutes after their doors open. Unless you’ve been living under a rock for the last 20 years, that’s how Black Friday works.
Advertising and promotional advertising tied to a special events are two different things. Most consumers are educated enough to understand the difference.
Bill Waddell says
You’re right Jason. There is legal, letter of the law type honesty; and then there is the other kind. I am sure Kmart had their lawyers go over the ads with a fine tooth comb and assure them there is no basis for a claim of false advertising. And you are also right that consumers have been conditioned to expect to be misled by the likes of Kmart on Black Friday, and on every other day.
The management of Kmart may want to bring those lawyers along, however, when their time comes to meet St Peter at the pearly gates so they can explain to him how leading people to believe there are items for sale they know full well will not be for sale when 99% of the people they sent the circular to come to buy them, is technically not lying. I am sure St Peter will be most interested in hearing that recitation of federal law.
I would not care to have to make that arguement with the good Saint, but that is just my feeling on the matter and others certainly have the right to see it differently.
Jason Morin says
Bill,
The other kind? And what would that be? And FYI, how Kmart advertises for Black Friday deals is no different than any other retailer.
Eric Wade says
Bill,
You know I’m a fan, but I have to give kudos to the rare American leader who may, on occasion, actually say what he means.
If Jobs believes smoking kills (as many people do) then I respect him for having the guts to own that opinion in the public eye.
Waaaay too many of our “leader” soft soap and mislead and triangulate and try to play the middle.
Lets put Jobs in charge of health care reform and see what happens.
Bill Waddell says
Eric,
I don’t fault Jobs for being anti-smoking – but I think his refusing to honor a warranty that people paid him for in good faith is wrong. He ought to give smokers a full refund in exchange for the computer and the accompanying warranty he sold them if he is not going to honor the warranty.
He should have staked his belief that “smoking kills” before he took money from 21% of his customers and put it into his pocket. He doesn’t have the right to change the deal after the money has been paid, no matter how he feels about his customers engaging in a perfectly legal activity.
What he is doing is the equivalent of me selling you a new car and, when it breaks down, refusing to honor the warranty and refusing to fix it because I know that you break the speed limit. I do not approve of how you use the product I sold you because it is dangerous to you and everyone around you. I suspect your position would be that I should have taken that high moral stand before I took your money for a car and a warranty. In fact he is worse because your driving is illegal, while Apple cusomers have every right to make their own choice when it comes to smoking.
Bill Waddell says
Jason:
“The other kind? And what would that be?”
lie (li) noun
1. A false statement deliberately presented as being true; a falsehood.
2. Something meant to deceive or give a wrong impression.
Kmart is not guilty of the first definition since they included the fact that there are only four TVs in the fine print. This is the kind of lying the courts take a dim view of and Kmart is safe from the law.
Kmart is guilty of the second kind because they gave the wrong impression in their ads. This is the kind of lying that is perfectly legal, but terribly unethical.
It is akin to a guy telling his wife he was at the bowling alley with his friends when she asks where he was last night. In fact, he was at the bar with his friends that happens to be in the bowling alley drinking and chasing women and did not touch a bowling ball all night. Technically he did not lie, but he most certainly attempted to decieve her into thinking he was bowling when the fact that the bar was in the bowling alley had no bearing on what he was actually doing.
He knew what she asked and what she wanted to know. He deliberately caused her to think one thing, when another thing all together was true. He did not make a factually false statement, but the deliberate deception is still a lie in anyone’s book. The fact that he was factually honest will not save him from a rightfully wrathful wife who learns she was decieved when the truth comes out.
“And FYI, how Kmart advertises for Black Friday deals is no different than any other retailer.”
And the fact that lots of guys lie to their wives about their whereabouts and activities, and lots of wives are onto them and expect them to lie, does not make it right.
Jim Fernandez says
Well, you guys can split hairs and try and figure out where honest and false advertising begins and ends. But the bottom line is in the bottom line of Bill’s original blog post:
“In the long haul, being open, honest and fair to customers is the only (best) way to succeed.”
Eric Wade says
Hi Bill,
I get your point but I think a better analogy would be if you sold me a car and then voided the warranty because I was using it for the perfectly legal sport of Baja racing. (Speeding is illegal so not a perfect analogy to smoking.)
What I am missing, though, is whether you believe that no company has the right to withdraw or change warranties when they determine that their product is being used in a manner that (according to them) certainly accelerates the breakdown of the product (and harms the technicians) OR are you just saying that APPLE doesn’t have the right to pull the warranty based on smoking?
Notwithstanding that there are likely better ways to handle the situation when a company is modifying a warranty or privacy policy, etc., I wonder if there are examples of warranty changes that do meet with approval and understanding? Perhaps installing a TV in your steamroom? Using your Berti Ox Horn knives in your circus act?
I’m not trying to give Apple a pass. In fact, I’m more in favor of trying to find a solution that helps everyone enjoy the product for a longer, healthier life cycle, such as filtration or sturdier fans, etc. Think beyond smoking vs. non-smoking and you might wonder how Apple feels about their products being used in the homes of folks who cook so much more aromatically than others… or what about youngsters who use much more hairspray and air-borne cosmetics? And those people who prefer natural fiber clothing which sheds more lint.
Seems to me that all of those crowds could benefit from innovation like filters that could be designed with the smoker in mind, improve the life of the product, and benefit other crowds as well.