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I'm guessing that the other people who replied to you never worked in retail. Stonewalling or ignoring complaints don't resolve the issue---they exacerbate it, and that's a bad thing, especially when the customer still has power over you (through potential paypal dispute.) Respond and acknowledge the issue, and ask how the buyer would like to resolve the issue. If all he wants a couple dollars refunded, is that solution more valuable than your time fighting a paypal claim? If not, you've lost nothing, and may have given the buyer enough rope to hang himself if he admits anything against his interest that would affect the potential paypal claim. If he wants a full return paid by you, then its a different situation, but at least you know where you stand.
Finally, (and I think many people here often forget this maxim), as Bill S. Preston and 'Ted' Theodore Logan directed, "Be excellent to each other."
Yeah, I only spent 5.5 years of my life working retail, including some in management.
There is absolutely a time and place when it's time to tell the customer off of they are wrong.
I would not worry about a PayPal dispute, as you would still have the option to say that the buyer did not mention the issue in a timely manner.