Complaints prevention, internal complaints handling and external dispute
resolution operate on a continuum. Typically, there is increased attention
to formality and rules of procedure the further one proceeds from complaints
prevention to external dispute resolution. There is no single “right”
approach to Consumer Complaints Management initiatives, as the proper approach depends on the type
of product or service in question, the character of the consumers, the distinctive
characteristics of the industry sector, the size and sophistication
of the merchant, the existence of an effective merchant association, the
expense of the Consumer Complaints Management mechanism, and the extent and nature of regulatory
oversight. In some cases, a combination of approaches may be adopted.
When a firm or sector adopts an approach that integrates all three components,
this is considered to be a comprehensive Consumer Complaints Management system.
Examples of Comprehensive Complaints
Management Systems
The Cable Television Standards Foundation operates a comprehensive
complaints management system with the cooperation of its members.
The system includes preventive aspects such as customer service standards,
site visits to ensure compliance, a structured complaints process
with time limits for each member company, informal mediation by Cable
Television Standards Council staff, formal adjudication by a three-person
panel, publication of Council decisions, and a random callback
policy to ensure that consumers are satisfied. Members that do not
adhere to the standards may have their membership revoked.
The Better Business Bureau (BBB) operates a comprehensive complaints
management system in conjunction with and on behalf of its members.
Its system includes preventive aspects such as reliability reports and
consumer alerts, referral of complaints back to companies for internal
complaints handling, and a wide range of external dispute resolution
processes. Members may have their membership (and their right to
display the BBB logo in their promotional material) revoked when they
fail to comply with BBB requirements.
Consumer Complaints Management Initiatives and Electronic Commerce
The increased ability of consumers to use the Internet to search for and
purchase goods and services from merchants located anywhere in the
world presents many potential advantages to consumers: enhanced
convenience, increased access to information about products and services,
improved choice and lower prices. This potential can also benefit merchants.
In particular, small and medium-sized businesses may be able to substantially
expand their markets using electronic commerce, unencumbered
by expensive activities associated with building and operating new
retail facilities.
However, buying a good or service online differs considerably from
buying something at a bricks and mortar establishment. Instead of being
able to see, touch and feel what they wish to buy, online consumers are
more dependent on technology-based substitutes to decide about the
appropriateness of the product or service and the reliability of the merchant.
When dealing with online merchants, consumers must pay increased
attention to many things:
- product and service characteristics and key safety issues
- delivery and return policies
- what consumer information the merchant gathers, how the merchant
uses it and when, and whether it is disclosed to third parties
- safeguards to ensure that consumer information is securely held
- concerns about the security of the transaction
- currency, customs and tax issues
- concerns about whether the products asked for will arrive on time
and intact
- techniques for dealing with consumer concerns should problems arise.
In addition, there is the added complication of determining what laws
apply to a particular transaction, and how to enforce those laws across
multiple jurisdictions. For all of these reasons, consumers have consistently
expressed reservations about buying things online.
Businesses, governments, consumer organizations, standards organizations
and others are all trying to solve problems associated with online
shopping — using preventive approaches, as well as internal complaints handling
and external dispute resolution techniques.
Complaints prevention techniques for electronic commerce include using
voluntary codes in conjunction with seals or logos (called Trustmark programs) to signal merchant reliability. As part of the codes,
merchants make commitments about information disclosure and protection, contract formation, delivery and return policies, and provision
of internal complaints-handling and external redress programs. Standalone
online redress services may also be part of Trustmark programs.
Trustmark programs may be particularly useful for small and medium sized
enterprises with comparatively low consumer profiles that are
seeking entry into new consumer markets. More established firms may
rely to a greater extent on their pre-existing brand image and reputation,
since this may provide sufficient indication of reliability to consumers.
Redress mechanisms associated with Trustmark programs typically
include complaints-handling and money-back guarantee services, and
third-party mediation and dispute resolution initiatives. When properly
designed and administered, Trustmark programs can enhance the
effectiveness of consumer redress.
Summary
Introduction
Market
-based Consumer Complaints Management Initiatives
Preventive Consumer Complaint Management Initiatives
Internal Complaints-handling Initiatives
External Private Dispute Resolution Initiatives
Comprehensive Complaints Management Systems
Characteristics of Effective Online Trustmark Programs
Online
Redress
The
Need for Effective Consumer Complaint Management Initiatives
Consumer Complaint Management Initiatives and the Law
Developing and Implementing Consumer Complaint Management Initiatives
Elements of Successful Consumer Complaint Management Initiatives
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