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Every Friday, I post a small insight into running Curio City and/or Blue Hills Editorial Services. My most recent posts are directly below. You can also start with the first post, or use the subject labels to the right to home in on particular topics. Feel free to comment on anything that interests you.
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Friday, January 02, 2009

Further Christmas Screwups (or, Good Riddance to Bad Service)

The worst vendor screwup: Remember the company that double-shipped my initial order of 144 Recycled Motherboard Christmas Trees? Well, not only are those three monstrous cartons still sitting in my living room, freezing $700 of inventory dollars…last week the same company screwed up again and double-shipped another order of 72. Now I have got five enormous cartons of 212 unwanted Christmas trees tying up $1,200. This is heading into its third week without resolution. Naturally, anybody who can do anything about this was on vacation this week. Only we self-employed types work a normal week between xmas and New Years.

Since the vendor seems oblivious and the sales rep seems useless, I am sorely tempted to return the cartons freight-collect and dispute the credit card charges. That would get their attention. It would also poison my relationships with two companies with whom I hope to do considerable business in 2009. In fact, this ongoing screwup is the only thing preventing me from placing a sizable new-product order from D├ęcor Craft right now. I shall phone them and lay down the law on Monday.

The worst product screwup: I mentioned the quality shortcomings of the Amazing Coin Factory Bank in my first screwups post. It looks like five of the 35 that sold are coming back. On Monday I’ll find out if that company’s new sales rep can make good on the old sales rep’s exchange promise, or if I’m going to be stuck with these broken things after paying $10 apiece in return freight. Even if they do come through as promised, this will be the least profitable successful seller that I have ever carried. And if they leave me holding the bag, it will be my worst money-loser ever. Unlike the company that stuck me with 212 unordered Christmas trees, this vendor has always been marginal. I will drop them in a heartbeat. My tolerance for inferior products and service is very low right now.

The most irritating service screwup (or, another reason to hate UPS): Late on the afternoon of 12/22, a customer paid $20+ for UPS 2nd Day Air. She mistakenly thought that she would get her order on the 24th, because she didn’t take into account the time that I need to pack the order. I diligently shipped it early the next afternoon (the 23rd). When she complained on the 24th that her order had not arrived, I explained the logistics and timing and assured her that her package would arrive on the 26th.

It showed up on the 29th. That’s right: 2nd Day Air took six days from door to door. Obviously, I had to refund her shipping charge. Just as obviously, I would recover the cost from UPS. Not at all obviously buried in the fine print of their Terms of Use page is the tidbit that UPS’s service guarantee doesn’t apply to packages picked up from Dec. 12-24. When I explained that my business had to pay the price of their failure, they sent a polite apology with an excuse – but still no refund.

Lesson learned: Never again will I offer expedited UPS services during the holiday week. They are too unreliable.

My own worst judgment screwup: Remember my huge surge in business from that New York Times gift guide? Well, I lacked appropriate boxes to ship all of those orders and delayed ordering them for one crucial day, so I sent out 100+ single-piece orders in padded mailing envelopes. Three of them arrived damaged – two to the same customer…the first via UPS, and its replacement via First Class mail! I did recover the cost for two of those shipments from UPS, but it still inconvenienced my customers and made Curio City look amateurish. I should have waited two days for proper boxes to arrive.

My own most costly screwup: I see that I wrote about credit card processing almost two years ago. Here's a Cliff's Notes refresher: Companies called “merchant service providers” sell service packages to merchants. When a customer uses a credit card, lots of people take a tiny slice out of the sale. The “payment processor” gets the biggest piece.

Have you ever tried to compare mattress prices between two stores? You can't do it. The manufacturers use different model numbers for identical products specifically so that mattress stores never have to meet their lowest-price guarantees. The credit card industry’s cryptic pricing is like that – no two products are identical. I knew that Pipeline Data Systems (who appear in my bank account as CTS Holdings) was on the expensive side. Now that I’m no longer a risky new business, I could do better. But when my contract expired in October I was getting too busy to bother with it, and I’m always loathe to perturb a system that works smoothly.

Then, a week before Christmas, they pulled their “annual fee” trick.

Every December Pipeline tries to charge me the annual fee that my contract specifically forbids. Every December, Merchant Express makes them reverse it. This year’s annual fee was disguised as a mandatory PCI compliance fee of $150. “PCI Compliance” is a government security requirement that doesn’t apply to little guys like me who use third-party processing, but it gave Pipeline another way to bleed their merchants at the busiest time of year. I ran to my Merchant Express rep, who said that they could move me to a cheaper payment processor (Fast Transact) to get me out of the stupid PCI fee.

Did I mention that this was a week before Christmas?

I was busy. Lo and behold, I blew it off for too long, and they finally debited my bank account $150. They will not discuss refunding it, even if I cancel their service before it takes effect. No appeal. End of story.

I am finally motivated now to scrap Pipeline. Their customer service (the two times I tried to use it) was the most arrogant and unhelpful I’ve ever encountered, and their monthly fee reports are indecipherable. I have not decided whether to go with Merchant Express’s payment processor Fast Transact, or switch to the highly recommended CDG Commerce. I think CDG might be a little cheaper overall (they have higher fees but lower discount rates). I might eventually recover more than the $150 that Pipeline Data stole from me. But I'd have to give up Authorize.net as my gateway. I like Authorize.net. And I wouldn’t put it past Merchant Express to pilfer my bank account for cancellation penalties, even though my 3-year commitment ended months ago. I wonder if there’s a way to revoke their withdrawal privilege.

I must force myself to decide on Monday. Each day that I put it off, a little more of my money goes into Pipeline Data Processing’s bank account. Bastards.

My dumbest screwup: I forgot to schedule my Amex payment with Citizens Bank. This is the first time Kraken Enterprises has ever been late with any payment of any kind. I am so embarrassed. I know that credit card companies delight in smiting tardy payers, and that Amex has the reputation for being the least forgiving. I hope they don’t punish me beyond the $38 late fee they already hit me with.

Miscellaneous little screwups: There’s the customer who placed a double order, did not answer my email inquiry, then announced right after I sent out his boxes that he is going to return the duplicate and make me issue a $80 refund...when I knew all along that I should’ve just canceled the second sale. There’s the customer who returned a defective levitating globe (surprise, surprise) to its manufacturer for warranty replacement, got blown off, and has asked me to intercede. If I can’t help her, she’s probably going to want a refund from me...and I can’t do that when she returned the merchandise to somebody else. There’s…um, well, that’s all I can think of.

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Visits were below 200 per day all week. If you subtract one unusually large sale from LY, the week came in very slightly ahead, but still not even half of plan. The first fiscal week of 2009 is not encouraging.

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