MY MAY 2012 COLUMN focused on strategies you can use to retain more Parts and Service earnings by reducing risky behaviors. One was to reduce risks associated with new vehicle setup and pre-delivery, and the other was how to accurately document what you do.
When it comes to risky behaviors your No. 1 goal is to make your customers’ safety is your top priority. No. 2 is to reduce your potential for being sued. No. 3 is to earn a profit. Unfortunately, there is no way to avoid being sued, only strategies to limit your risk. (Note: Please contact a licensed attorney to obtain legal advice if you have specific product liability questions or suspect a lawsuit is brewing.)
Reducing risk in product representation is everyone’s responsibility. I’ve heard of a dealership being sued when a Parts guy sold an aftermarket engine guard using the factory’s OE part number. The customer installed it himself, later got T-boned by a car and lost a leg in the accident. The dealership was sued and lost when it was discovered the business misrepresented what it sold the customer by having the wrong part number on the receipt.
In another case, plaintiffs claimed that a motorcycle salesperson presented the vehicle as ABS-equipped while selling it (ABS was an option not installed on the vehicle). The assumption was that if the bike had been ABS-equipped, as the rider and passenger reportedly believed, it would have stopped in a shorter distance and reduced or prevented injury.
Following are some guidelines for accurately representing products and services:
• Use the manufacturer’s part description (not street slang) on estimates, receipts and repair orders. For example, it’s called an engine guard, not a crash guard. It’s an OFF/RUN switch, not a ‘kill’ button. It’s called a fork slider cover, not a beer can.
• Write/type in the proper part number, even if it takes extra time.
• Don’t use phrases such as, “These billet brake calipers will stop you quicker,” or “This fork modification will improve handling,” or “This full-face helmet is the safest design.”
• Do use phrases such as “improves braking feel,” or “has a superior damper design,” or “A full face helmet is a great choice for any rider.”
• Never tell customers to fix the bike by performing a dangerous activity. I know of a dealership that told a customer to fix a chattering clutch by putting the front wheel against a wall and doing moderate engine revving while engaging the clutch slightly. The customer put the front wheel against a telephone pole and ended up wrapping the bike and himself around it. He got hurt, sued and won.
Safety recalls are created when an issue that could cause serious injury or death is determined. In most cases the vehicle manufacturer makes the first move to establish the recall. In some instances the National Highway Transportation Safety Administration (NHTSA) initiates a recall based on owner reports, investigation and testing.
Safety recalls must be taken seriously. If you’re a franchised dealership, you’re responsible by federal law and by franchise agreement to identify and remedy safety recalls on the vehicles you sell, repair and service.
A best practice is to have a process in place that guarantees every vehicle that passes through the dealership never leaves the dealership until any and all safety recalls are identified and fixes are performed. That includes new, pre-owned, consignment, rental and demo vehicles and, of course, customer-owned vehicles in for service or repair.
Use your DMS or the manufacturer’s dealer-only website to run the VIN to determine if the vehicle has an outstanding safety recall.
Below are eight common questions related to safety recalls. Read them and compare your answers to mine by clicking on this link.
1. Does a safety recall apply to the original buyer only?
2. When does a safety recall expire?
3. What document has information about how to perform a safety recall?
4. When should the dealership sell a bike with an outstanding safety recall?
5. Can a dealership direct the customer back to the original dealership where the bike was purchased to have the safety recall performed so that it doesn’t tie up its own Service department?
6. How much can a dealership charge the customer to perform a safety recall?
7. What do you do when a technician inspects the vehicle and determines the safety recall was performed, but the electronic verification indicates the safety recall was not completed?
8. What do you do when the condition of the bike is such that the safety recall cannot be performed?
How did you do? Hopefully your answers were pretty close to mine. Safety recalls are out there in the public domain, and it would be difficult to defend your actions if your dealership failed to identify a recall and remedy it properly, and someone got hurt.
That’s the bad news. The good news is that safety recalls help us fix dangerous issues to protect us all, and they drive customers to the dealership along with their vehicle — which, by the way, gives you an excellent opportunity to upsell.