It is difficult being a manager or business owner: long hours, dealing with employees and their problems, financial and time pressures, etc. In Chile, add to the mix poor customer service and often deceit. Let me give a couple of recent examples of situations in Chile when the business owner had to deal with returning a product and purchasing new imported goods. They will serve as good lessons for any newcomer starting or running a business in Chile.

Bigger stores in Chile, like construction supermarkets Easy and Sodimac, can be especially problematic. Volumes of sales are high and there are many employees, many of which do not think like store managers or owners when dealing with customers. Like most Chileans, especially among the lower classes, they are mediocre, ignorant, lying, irresponsible and do not solve problems well or even, at times, pay attention to important details.

In the market economy, entrepreneurs and business owners are important agents of change. In one important aspect of this role, they vote with their purchases. And when establishing their businesses in Chile these folks should be ready to fervently complain, raising voices as necessary (Chileans hate it!), in order to bring market discipline to bear. In one case, a business owner had purchased hundreds of thousands of dollars from construction supermarkets in Chile. Part of his monthly tasks include returning excess or unused products for exchange or refund. Managers understand this and are happy to take back a small percentage of a larger purchase. It is good business for them.

Nevertheless, front line employees do not often get this fact and their reaction when presented with returned goods is to create hassles for the business owner. “I cannot accept this return of $30 worth of product because you do not have a receipt.” The owner responds, “It is with the accountant and I do not have it.” The hassle continues until the business owner, already pressed for time and hardly willing to spend significant time recovering US$30 or dealing with an empowered minimum wage employee that seems to enjoy hassling an upper class person, begins to complain and work his way up the managerial chain of command in the store.

The scene made at the store to embarrass the employee with finger pointed at her in front of her boss is useful for changing store policy and getting action to resolve the problem. Sure, making a scene is a hassle and uncomfortable the first time, but it does put fear into the hearts of the employees to provide better service and next time take 60 seconds to look up and print the document they want in the computer system. The reprimand from the store manager will help improve employee attitudes and his personal phone call apology to the business owner will be a bit gratifying, but especially useful since it paves the way for future efficiency. So by all means raise a ruckus in Chile when you get bad service. It is worth it. In fact, the majority of employees in the store will grant greater respect and be even more helpful. I have seen it happen firsthand.

In another case, a business owner was looking for imported bathroom fixtures and found a line of goods with the Briggs USA brand. The store was full of imported goods and the saleslady affirmed that the Briggs line was American. However, when the purchased goods arrived, the boxes were clearly marked “Made in Chile” and the same insignia was embedded in the porcelain of the product itself. Curiously, on the floor model there was no such indication. In fact, the floor model was indeed imported. As always, buyer beware. Chileans will deceive and do what they can to take advantage of a situation. They will import the floor models to make the customer believe that they are getting the same and then deliver locally-made goods instead. In the case of Briggs, more than likely the product quality is fine and the local producer has purchased the right to replicate the Briggs models and use its logo. But this fact should be revealed and it is not. Thus, when living in a land of tricksters, hucksters, liars and thieves, where honesty is hardly the best or preferred policy, it pays to ask the questions that the business owner or manager does not think to ask.

What should a business owner do in a Briggs-like situation? At the very least, assuming he does not reject the product outright, he should register a complaint and make his displeasure known to the store management for the trickery on the showroom floor where everyone can hear, then be sure to spread the word to some others outside the store about the trickery. That is market discipline. Maybe even write a letter to El Mercurio‘s “Línea Directa” to complain about bad service or products. Firms hate the bad publicity and will often work to correct it.

In some cases a dirty look and frown do the trick, along with a pledge to stop purchasing from a supplier. One such instance comes to mind when a business owner returned a box of broken tile that had arrived to the job site in that condition but was undiscovered (under dozens of boxes) until later. No owner has time to rush down and return the box to get his US$20, but when it was eventually done, the shop refused to take it and insinuated that the owner could have broken it later after delivery and that he could be lying now just to get the US$20. This attitude is very prevalent among Chileans and should be met with disgust and disdain until such time that Chilean companies realize that it makes no sense for a business owner to go to the trouble to cheat the supplier out of small change and that maintaining a customer is worth more than the loss of US$20 by accepting the tile. I suggest leaving the box on the manager’s desk and under frown, quietly leave the store. That can be an effective way to register one’s complaint, too.

Lower level employees do not “get it” oftentimes, and even some managers. So register your complain and vote with your money and your selection of suppliers. Chile will change better with foreigners putting pressure on suppliers to improve business practices. Thus, newcomers have something else to be prepared for after they arrive and get established.

 

Be sure to become a member of Escape America Now and gain access to the monthly webinar. Details at www.esccapeamerianow.info. Visit AllAboutChile.com for discussion and forums about the country.

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