December 26, 2000, 9:55 AM

The Customer`s Always Right (Even on the Internet)

It’s pretty clear that Sandra James won’t be shopping online again anytime soon. That’s because James, an avid collector of homemade arts and crafts, knows firsthand what it’s like to be left high and dry by an online retailer who fails to deliver merchandise. And James isn’t just upset over the episode. Her Internet shopping experience has soured her to the point that she would rather go back to buying her collectibles from an established catalog or a vendor at a weekend crafts fair than trust any online retailer who won’t keep promises.

Her frustration began last October, when the dolls she ordered-and paid for-from didn’t arrive in the three weeks she’d been promised. After nearly a dozen e-mails didn’t resolve the problem, she turned to Netcheck Commerce Bureau, an Internet complaint clearinghouse, for help. Eventually, James received about one-third of the dolls she paid for. But that’s all she’s going to get.

The now-defunct retailer that was supposed to ship her the dolls has since sold the domain name to another arts and crafts company. “It’s easy to order anything you want online, but what’s the point if you can’t get satisfaction from the merchant when you’re having a problem?” says James, who’s out $180 as a result of her experience. “I shouldn’t have to send a retailer multiple e-mails asking, ‘Where’s my merchandise?’ ”

The importance of keeping customers happy and turning them into loyal shoppers should be obvious by now to the more than 15,000 retailers selling consumer goods online. But while Web merchants may be experts at building glitzy electronic storefronts, they’re novices when it comes to providing quality customer service.

“It’s amazing how discriminating the Internet shopping public is,” says James Medalia, founder of Justballs Inc., a Kingston, N.J., online sporting goods retailer, which is building its success on good customer service. “They’ll try you once, but if it’s too much of a hassle to get a problem resolved, they won’t come back.”

Flunking out

Justballs is doing all the right things by making it easy to find customer service information on its Web site and resolves 95% of all problems inside a day. But Justballs is an exception. If consumer advocates, CEOs of consumer complaint organizations and shoppers rated Internet retailers on the quality of customer service, most would flat-out flunk. Good customer service means answering phone calls or e-mails promptly and resolving shoppers’ problems quickly. It also means that online merchants should have their store policies or “help” buttons clearly located on their Web sites and offer shoppers a hassle-free way to return merchandise they don’t want.

But it still takes many Internet retailers up to five days to respond to their customers’ online queries. And for the companies that track complaints or help shoppers resolve problems, business is booming. Springville, Utah-based Netcheck will field 2,500 complaints this year-double the volume of a year ago-from online shoppers needing help. Likewise,, a Los Angeles company that rates more than 600 online merchants on customer satisfaction, reports that almost 25% of the 35,000 shoppers it surveys each month have to contact the online merchant more than once because of problems with deliveries that never arrived, difficulty in returning unwanted items or replacing damaged goods.

“If one in five customers walked into a store with a customer service problem, it would be a nightmare for the retailer trying to solve them all,” says Paul Bates, BizRate research director. “Web merchants rate pretty well on presentation and ordering, but improvement is needed with order fulfillment.”

Given that it can cost $100 for most online merchants selling anything but computers to acquire just one customer, it’s surprising that more merchants aren’t paying closer attention. But in their zeal to get up and selling online, most Internet retailers-even large chains- aren’t making quality customer service a top priority.

Bentonville, Ark.-based Wal-Mart Stores, for instance, makes it very convenient for real-world shoppers to return merchandise to any of the chain’s nearly 4,000 stores worldwide. Yet it still doesn’t allow customers who purchased merchandise at its Web site to exchange or return the item to any of its bricks-and-mortar locations. Wal-Mart says it’s doing the necessary computer work that will allow store clerks to take back items purchased at, possibly as early as September.

But the very fact that it’s taken the nation’s largest retailer almost four years to implement such a basic policy tells consumer advocates that quality customer service will be a long time coming to the e-commerce market.

“Even the big guys haven’t thought online customer service all the way through,” says online advocate Edgar Dworsky, a former Federal Trade Commission consumer education consultant and Massachusetts assistant attorney general in charge of consumer protection. These days he’s curator of, one of the most comprehensive customer education pages on the Web (see sidebar, page 30).

Great expectations

Unlike the offline world, where customers are used to putting up with long return lines and surly store clerks, online shoppers expect speed and convenience. Shoppers aren’t just expecting that they can order and pay for merchandise on demand-they’re also anticipating rapid delivery and a quick response to their online inquiries. By and large, online merchants are failing to meet shoppers’ expectations.

The exceptions include, and (, which are among the highest rated Web sites for customer service.

EToys has a sophisticated e-mail system that constantly sends order status messages to customers once they’ve made a purchase. The messages inform shoppers of the date and time the order was shipped and when it will arrive at their address. And Amazon and have installed sophisticated order tracking software that allows shoppers to view their past purchases as well as track their current order all the way through the fulfillment process.

“We’re trying very hard to listen to our customers,” says Joel Spiegel, vice president and general manager of auctions for Seattle-based Amazon.

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