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Did I Misundertand My "Open" Sign?

December 5, 2008

Recently I had an "adventure" that convinced me I don’t understand what my "Open" sign means. I am becoming convinced that customers see it to mean “If you are crazy, mean, or looking to scam someone, we are open. Please come in and take advantage of us.”

Here’s the 411. In the middle of a busy Saturday afternoon, someone called us and wanted to speak to the owner. I took the call expecting a complaint. Instead, it was a “designer” who wanted to recommend my store to another “designer.” If I was willing to work with them personally, they would come in that afternoon. He stressed it was important that they work with only me because they were getting ready to do a very expensive penthouse in one of New Orleans’ most upscale waterfront condos.

When the pair arrived, it turned out the “designer” who recommended us was a local who worked as a salesman in one of the French Quarter jewelry stores. The other “designer” had recently moved to town to work with a French Quarter antique store as their in-house design consultant. She had purchased a penthouse in a prominent condo on the River. I knew for a fact penthouse units in that building sold for over $2,000,0000. She needed furniture for the patios of the penthouse. Although something seemed odd, my staff and I spent about two hours with her aand she decided on three groups that came to about $14,000.

When it came time to pay, she presented the antique store’s corporate Visa card. We accept corporate cards all of the time. Most of our clients have them. We tried to run the card, but it was denied. She used her cell phone to call the owner of the antique store. the storeowner thought it was because she had put $50,000 worth of inventory on her card the month before. She had just sent in a payment but it probably hadn’t hit the credit card company, yet. At her request, we tried running the card for less and it was denied again. Finally, we were able to run the card for about 1/3 of the total purchase. It was comforting for us that the storeowner had been brought into the transaction even though it was because the card was being declined. At least she was aware of the transaction and giving her tacit approval to it.

The “designer” then pulled out the antique store’s corporate American Express card. This card not only had the company’s name on it, it also had the “designer’s” name on it. However, it was so new the "designer" had to call American Express while she was at our store to activate the card. In the mean time, she questioned whether all of the furniture she was buying would fit on her decks. She went back and forth and finally decided to remove one of the sets from her invoice. She would let us deliver the other two sets and if she had room she would call us back to get the third set. We put the balance for the other two sets on the American Express credit card.

Because she was having an informal gathering at her home that night, we delivered the two sets to her that afternoon. Two days later she called to say she had enough room for the third set. At her instruction, we put that set on her American Express card. As retailers, we call this a “card not present” transaction. We do it all of the time and since she had presented the card to us with her initial purchase, we did not question doing it for her on this purchase. We delivered that set to her shortly thereafter.

Both credit card companies funded the transactions without question and we thought nothing else about it for several weeks. Then everything started going cuckoo. The owner of the antique store came into our store about a month after the original purchase. She wanted us to take all of the furniture back because the “designer” had misled her. She told her the furniture was for a client; instead, it was for the “designer’s’ personal use. She said she never would have authorized the purchase had she known this.

Regardless of whether she knew this or not, we felt the sale was valid and the dispute was between she and the “designer.” In addition, our return policy allows a consumer to return the furniture in “new” condition within seven days of a purchase. Even then we charge a 15% restocking fee. It had been over a month since the purchase and the furniture had been out in the weather all of that time. To muddy the waters even further, she had cancelled the “designer’s” credit cards after she found out she was abusing her purchasing powers. If I were to give her a credit, I would have to give it to a card that was not used in the transaction. I didn’t think either of the credit card companies would go for that. For those reasons, I told her we would not take the furniture back

After the card owner left, I called the “designer” hoping to get a better understanding of what was going on. She told me the owner of the card owed her money for design services she had provided. In addition, the “designer” had left several hundred thousand dollars of her personal art collection in the antique store and the storeowner refused to return it. Finally, the "designer" told me she did not want to return the furniture. This meant that even if I were willing to take it back, I didn’t have her permission to enter her condo and take the furniture. Sounds like a lawsuit waiting to happen to me!

The antique store owner called me about two weeks later to see if I had changed my mind. I told her I hadn’t and even if I wanted to help her, I couldn’t get into the ‘designer’s’ condo to get the furniture. That’s when she told me she had taken the furniture from the “designer” weeks ago and had put it into one of her warehouses. According to her, the “designer” had gotten other furniture from a friend almost immediately after we delivered the furniture. Tha meant it hadn’t been in the weather for very long at all. Again, I called the “designer” who insisted the furniture was not in storage; in fact, she was looking at it from her living room that overlooked the balcony. Oh yes, this was becoming some fun!

About two weeks later, we got a letter for American Express saying the card owner was disputing the charge. The basis for the dispute was the furniture was defective when it was delivered and, even though she had contacted us several times to remedy it, we made no attempt to repair it. You wonder how some consumers can sleep at night!

We prepared all of the paperwork necessary to answer the dispute. In the meantime, I became antsy about the part of the sale that was done as a “card not present.” It was possible the credit card company would not honor that charge even though we had a great deal of supporting documentation. If they took that back, I would be out that money and would not have the furniture because the “designer” would not let me go into her condo. It would become a civil court matter with all of the concomitant legal fees.  To me, it looked like my downside risk was too large. I decided to cut my losses and take the furniture back. However, I would only do it if the antique storeowner would pay a 25% restocking fee and the “designer” agreed to let us get the furniture. Both of those things happened and we made arrangements to pick up the furniture.

The odd gets odder here. When we went to pick up the furniture, we found out part of what the antique storeowner told me was true. The furniture was in storage, but not in her warehouse; instead, it was stacked up and under other things in the condo’s storage lockers. After getting the furniture out of the lockers, we found out that several pieces were not there. It turns out they were still in the condo. When my drivers went to retrieve them, they saw that there was indeed new furniture on the patio. They even took a photo of it with their phone’s camera. It looked like something from a big box store. Finally, when we brought the furniture back to the store, it had lots of scrapes and needed so much touch up the 25% restocking fee was not going to be enough. However, I had agreed to that figure and had to stand behind it.

I have been using "designer" in quotes because, at this point, I am not sure she really is a designer. I never asked for or saw her ASID card. One weekend she called me and claimed a client was coming to New Orleans to engage her to do their multimillion mansion in Alabama. She would be sure to get us the outdoor furniture if she got the job. On another occassion, she claimed to be working with a casino that needed lots of outdoor furniture. Again, she would be sure to get us that part of the job. You can be sure we never saw any of this work!

I am still not exactly clear what the scam was and who was being conned.Was the “designer” scamming my store, the antique storeowner, or both of us? Why did she buy and accept furniture from us over a period of two weeks and then put it into storage instead of asking us to take it back? Maybe both parties were scamming us. The “designer” may have needed the furniture for a function and always intended to return it to us by having the storeowner dispute the credit card charges. However, the card owner was out the restocking fee of almost $4,000 ; so, that made no sense. I don’t think I will ever know the whole story just the part about where my store lost money.

For those of you who own retail stores, this story probably isn’t very surprising. I’ll be you’ve all had at least one customer who has worked their brand of “crazy” on you. I am disappointed that I let myself fall for this. Why didn’t I listen to my gut when all of the red flags started flapping in the breeze? You know, the “designer” new to town, brought in by another self-proclaimed designer who was actually a shop clerk. The declined credit cards in a corporate name. The credit card that hadn’t been activated yet. The need to have the furniture delivered immediately. We want to believe people are basically honest otherwise we would be too scared to open our stores in the morning. But as we get older, we do become more cynical or are we just more experienced?

Yours in confused retailing, Bruce