Article

Sit Back and Unwind

Back-outs are part of the dealership life. What’s your policy?

June 2016, Auto Dealer Today - Feature

by Jason Heard

Picture this: It’s the end of a busy Saturday. Several of your salespeople scored a hat trick and your grosses stayed strong. To celebrate, you buy the team a round at the local watering hole, go home, tell your family what a beast you are, and have a wonderful Sunday. Life is good.

Monday morning comes and you are still riding the weekend high. The sales meeting rocks and you feel like the sun will never stop shining — that is, until you get back to your desk and find a message asking you to call the last customer you closed on Saturday night. You make the call, introduce yourself, and quickly learn they want to back out. Ugh.

Is it a case of cold feet? Buyer’s remorse? A talk with the local lot lawyer? Whatever the reason, the customer has changed their mind, and there are few things as frustrating to a dealer, manager or salesperson.

So what do we do? Do we let them out? Do we hold their feet to the fire and tell them it’s too late to unwind the deal? We both know there is no one, clear answer, but it helps to have a back-out policy in place before the next occurrence. Here are a few approaches to consider:

1. The Three-Day Guarantee

Whether it’s state- or dealer-mandated, most stores offer a three-day, money-back guarantee, and some dealers extend it up to a week. Does that help them sell more cars? No doubt, particularly if they advertise it.

If that is your policy, what is the harm in saying so upfront? You may have to hold paperwork a few more days, and you may have a longer CIT report, but you will sell a few more cars to more satisfied customers.

2. The Staunch No-Bring Back Policy

Some states do not require dealers to accept back-outs and many dealers in those states are perfectly happy with that. But I suspect social media may be forcing some of them to change their minds. Bad reviews and bad ratings are hard to shake, and refusing to unwind deals can generate both.

That being said, there is nothing wrong with this policy as long as it is, in fact, policy. It needs to be enforced from the top down, and everyone must adhere to it. The only possible exception is the owner, because it’s their money, but even that aspect of the policy should be spelled out for managers and staff.

3. No Policy at All

This one is dangerous. We live in a world full of people and lawyers who love to go after companies with deep pockets. Allowing some customers to return cars and forcing others to drive right back off the lot can lead to charges of discrimination. And with no policy in place, your employees may be left to decide for themselves or ignore the customer in the hopes that they will simply go away.

Your back-out policy is your decision, but if you don’t have one, it’s time to have a conversation with your sales team. Take a look back at the last 12 months. You may have a de facto policy in place and not even realize it. Reach a consensus, put it in writing, and stick to it. Knowing what to expect makes it easier to move forward. Saturday will be here before you know it. Best of luck.

Jason Heard is the general sales manager at Gerald Jones Honda in Martinez, Ga. He is a 20-year industry veteran with extensive sales and sales managment experience. [email protected]

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