How to respond when you receive sub-standard products or services

Katie Cook

ContractRoom

by Katie Cook

globe-icon.jpgIt's easy to know what the best thing to do is when you receive something something sub-standard which you've ordered online as a consumer i.e. send it back and demand a full refund. It's not so simple when this occurs in the business context. This is because there are many factors to consider which simply are not part of the equation when you are a consumer.  These include the fact that how you approach the issue will impact on your continuing business relationship or the cost your business may incur if you end up having to change suppliers. So what is the best way to proceed if you supplier doesn’t deliver on time or delivers something sub-standard? Let’s take a look at a step-by-step approach.

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  1. First Steps: Getting in Contact - as soon as it comes to your attention that what you have ordered differs to that with which you have been provided, establish contact with the relevant supplier. Explain clearly to them what has happened and exactly why you are dissatisfied with the goods or services. By dealing with this situation as soon as possible you will allow the supplier the chance to rectify the situation and in so doing the best chance for both of you of maintaining a good business relationship. You should also provide a detailed written communication to the supplier outlining the incident so that this can also be referred to at a later time should there be any dispute about what was said at the time of reporting.  
  2. Assess the response from the supplier and if appropriate, implement plan B - the situation will determine how long you can wait for the supplier to respond.  If you are in a situation where you need to source alternative goods or services straight away so business operations are not further interrupted go ahead and do so.  Notify the supplier (in writing via letter and/or email) that this is what you are doing and that you cannot afford to wait.  Keeping the supplier informed and updated also maintains good communication so the business relationship has the best chance of survival.  It also ensures the supplier is made aware of the inconvenience their actions or inactions have caused.
  3. Assess the response and decide whether any other action is required - Your supplier will most likely eventually respond to your complaint.  At this point, you will need to assess whether their response is adequate given what occurred.  Have they provided you with a replacement product?  If it was service offering that was inadequately performed, have they provided a reduction in price, refund or promised to make it up to you by providing you with something in the future free of charge?  Have they provided an explanation for what happened and taken steps to ensure something similar doesn’t happen again?  Note exactly how they handled the complaint, including details such as how long they took to respond and whether you were satisfied with their response. This is so you can refer to this in the future if a similar situation arises.  You may decide to forgive them once for a mistake but if the record repeatedly shows that they have failed in what you have contracted them to do, or they haven’t resolved the issue satisfactorily, it may be time to end your business relationship with them. You will have to consider all the implications that may flow from such a decision and weigh up whether this is really the best way to proceed.
  4. Set the stage for future dealings - once a resolution is reached, it’s a good idea to decide with your supplier how similar situations, if they do occur, will be dealt with in the future.  Also, there should be an agreement with them on the steps you will both take to prevent future incidents.  Create a written document summarising what happened, the situation and what has occurred.  Describe how you and your supplier have dealt with this particular issue, how you have identified how to resolve it and what was the result.  Also include what steps you each have agreed to take to prevent similar occurrences in the future
  5. Closing the loop - once the issue has been resolved, it’s a good idea to acknowledge this has occurred.  This is good for communication between you and the supplier and promotes a healthy business relationship. Where appropriate thank everyone involved in bringing about the resolution. Refer to notes on working together in the future and let them know you are looking forward to dealing with them again. This lets the supplier know you are satisfied with the resolution and ready to move on. It will relieve them from any stress or anxiety they may feel in dealing with you again due to the past incident.  

So there you have a list of steps for how to deal with a situation where you have been provided with something less than what you ordered from your suppliers.  If you continually monitor your suppliers’ performance in a methodical way you may be in a better position to determine whether taking such action is appropriate.  We will look at how to do this in more detail in an upcoming blog.

What are your thoughts? Do you work in procurement or supply chain management and regularly work with suppliers? How do you approach the situation where they provide you with products or services below the required standard?

ContractRoom is cloud-based negotiation platform and contract lifecycle management software company that makes it easier for you to do deals with suppliers. To find out more about our product go to www.contractroom.com or book a free demo here: Request Demo

This article was written with the assistance of Jennifer Tran who is interning with ContractRoom over the summer.  

About the author

Katie Cook

Katie Cook

Katie Cook is the Director of Marketing, Communications and Legal Standards at ContractRoom. Originally from the east coast of Australia, she has a background as an Attorney having practiced in both public and private practice in Brisbane and Melbourne. While working as an Attorney Katie completed studies in journalism and is now combining her legal and writing skill sets in her role at ContractRoom.

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