Mediation policy: Steps to cut costly risks arising from customer disputes

Mediation involves exploring a win-win settlement where both sides emerge victorious.

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Customer complaints are very costly for any business and the best way to manage them is by using preventative measures to ensure they do not arise. Other than loss of time, a business can suffer from loss of future business opportunities through referrals. A business can also suffer reputational risks if customer complaints remain unmanaged.

However, the biggest risk is when they become litigious. When the customer goes to court over unresolved disputes with the business the process becomes time-consuming and can injure the reputation of the business.

It is always better to prevent customer complaints before they escalate into bigger disputes. I have provided a few tips on how to prevent customer-related disputes from escalating into litigation.

The first step is to ensure your business is compliant with all aspects of consumer protection laws. Consumer rights are now included in both constitutional rights and statutory rights. The Consumer Protection Act recognises consumer rights under the law. The Sale of Goods Act is another law that provides statutory rights to consumers.

It is important for a business to ensure that it is compliant with these laws. The internal organisational policies of a business cannot be relied on to escape consumer liability. For example, the old adage, “goods once sold cannot be returned,” does not apply in the current consumer rights dispensation. The consumer can return defective goods or those that do not comply with the sample.

As a business owner, you should train all your staff members on consumer protection laws to ensure that the business is not exposed to any risks arising from non-compliance by staff. The business should have sound customer care policies that align with the laws.

These policies provide guidance to the staff and customers on customer care issues. A business ought to have properly trained customer care officials who handle customer complaints in a sober manner. This will play a big role in preventing the dispute from further escalation.

At times, some disputes escalate beyond the customer care department. For example, when a customer threatens to sue a business. The business ought to have a clear policy to handle such incidences and if possible, to de-escalate the dispute.

A customer dispute resolution policy provides guidelines and mechanisms in which customer complaints shall be handled by the business. Legal experts recommend mediation as the ideal dispute resolution mechanism for businesses.

This is because of the benefits that mediation offers over other dispute resolution methods. For example, through mediation, a business can save a lot of time and costs when compared to othe methods.

However, the biggest benefit of mediating customer disputes is that it enables the business to save the relationship with their customers. Mediation involves exploring a win-win settlement where both sides emerge victorious. Mediation also helps in customer retention as the relationship with the customers is saved.

To draft a good customer dispute resolution policy, you will need the services of a good lawyer and also a good customer care professional. There are certain principles of customer care that ought to be included in the policy. A good dispute resolution structure should be included in the policy. For example, a mechanism on how to involve the legal department in an escalating customer complaint.

Ms Mputhia is the founder of C Mputhia Advocates | [email protected]

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