Author: Aaron Reese
“Satisfaction Guarantees” have been getting businesses in more trouble than any advertising claim should. They’re not worth it. The BBB receives complaints that would never have been filed, if not for the guarantee.
Guaranteed satisfaction is so definitive, so unbending–ultimate. It leaves no wiggle room for unforeseen variables. Either customers are 100% satisfied, or they aren’t. If they aren’t, it can cause headaches for a business that guarantees satisfaction.
According to the Code of Federal Regulations (16 CFR 239.3(a)):
A seller or manufacturer should use the terms “Satisfaction Guarantee,” “Money Back Guarantee,” “Free Trial Offer,” or similar representations in advertising only if the seller or manufacturer, as the case may be, refunds the full purchase price of the advertised product at the purchaser’s request.
See the problem? A business must be willing to refund the full amount paid on any product or service if the customer is the least bit dissatisfied.
For example, if satisfaction is guaranteed without any further disclosure or clarification by the business on what “Satisfaction Guaranteed” means, what do customers, BBB and the Federal Trade Commission expect if a customer:
- Doesn’t like a T-shirt they bought online? Full refund.
- Doesn’t like their new haircut? Full refund.
- Isn’t happy with the work by an automobile mechanic? Full refund.
- Doesn’t like the new addition to his house? Full refund.
- Doesn’t like the skyscraper he just bought? Full refund.
- Isn’t happy that the business even exists after a disagreement? Full refund.
It can get out of hand quickly. The BBB regularly takes complaints against businesses in which customers directly reference a “100% satisfaction guarantee.” The complaint may only be about a minor issue on a $10,000 contract, but the company guaranteed satisfaction and the customer expects to be fully satisfied. If the business can’t figure out a way to satisfy the customer, it might have to fork over $10,000 because of a minor goof. It doesn’t matter how unreasonable the customer is.
Think of how a dishonest person could take advantage of a business because of this. They could buy clothing from a store, wear it out for a night on the town, and return it the next day. It wouldn’t matter if it smelled like smoke or had a few busted seams. The business would have to hand over a refund.
How about this? A customer hires a contractor to build a massive 50-foot deck on the back of their house. It requires concrete pylons, support struts, treated lumber, heavy-duty anchors, the works. After the project is finished, the customer, who happens to be obsessive compulsive, discovers a quarter-inch slope on the deck. Over 50 feet, the slope is unnoticeable and within standard variance according to the municipal code. The customer wants the deck torn up and rebuilt. I handled this complaint. It went to court. The business lost.
The easiest way for businesses to avoid putting themselves in a corner is not to have a satisfaction guarantee. It is impossible to satisfy every single person, every single time. Things go wrong and sometimes the best efforts of a business to resolve a dispute fall short.
The only other way to avoid issues caused by satisfaction guarantees is for businesses to explain exactly what their satisfaction guarantees mean. The BBB provides a summary of its Code of Advertising here. It briefly explains what businesses should do when making these types of claims:
Advertisers should disclose any material limitations on a “satisfaction guarantee” or “money back guarantee” and define, for consumers, the meaning of claims such as “lifetime guarantee.”
For example, if a money-back guarantee only applies if the consumer returns the product within 30 days, that information must be included wherever the satisfaction guarantee claim is made. Knowing what to place near “satisfaction” or “money-back” guarantee claims is vital for businesses. Not only will it create better relationships with dissatisfied customers, it will help prevent complaints and save businesses some money!