Avoid Lawsuits for your Company- Don’t Promise More Than You Can Give!

It is good Risk Management Strategy to make sure that your promises and representations to your customers/clients/patients are truthful, honest and free of unreasonable promises.

Promising more than you can deliver is tempting. You may want to make that sale or cement that relationship. Don’t do so at the risk of future litigation. Defending a lawsuit or administrative claim eats into your profits!

Business owners can also get into trouble because of a desire to help the customer. Service providers especially can be tempted to put their own assets and well-being at risk in order to help a client solve a problem. But remember, the issues that brought the customer to you existed long before you came onto the scene.  Don’t let your desire to solve a problem that someone else created be your downfall.  Look at the situation with realistic eyes, and help your customer do the same.

Here are some strategies to keep you out of trouble (and out of court). Some of these tips are taken straight from the Texas Deceptive Trade Practices Act, a law that protects consumers:

  1. Don’t promise that your goods or services are of a standard or quality that they are not.
  2. Don’t guarantee results when you have no control over the situation. This is especially important in a service industry.
  3. If you guarantee satisfaction with the final product, be ready to stand behind that guarantee.
  4. Make sure that you can afford to stand behind any guarantees for refund that you make.
  5. Make sure that your sales team and other employees and representatives are not making promises that they should not be making.
  6. Be honest about the endorsements and affiliations that your product or company has.
  7. Be honest about the origin of the goods you sell.
  8. Don’t disparage your competitor’s goods or services in an attempt to gain an advantage.
  9. Don’t advertise something as being on special or on sale when it is not, when you don’t intend to follow through with the promise, or when you don’t have enough to satisfy a reasonable demand.
  10. Don’t make false or misleading statements about the durability of your product.
  11. Don’t have ‘hidden charges” in your transactions
  12. Don’t advertise a “going out of business sale” unless you are really going.
Following these tips can help keep your business on track and can help you develop a reputation for honesty and trustworthiness.

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