Sales Ethics

Sales EthicsSales Ethics

Holley’s JustificationHolley’s JustificationA sales transaction is morally

justified to the extent it is voluntary.3 conditions on an acceptable

exchange:◦1. Both sides understand what they’re

getting and giving up. (knowledge condition)

◦II. Neither is compelled or coerced.◦III. Both are able to make rational

judgments.

Important contrast with caveat emptor.

What’s wrong with caveat emptor?

Withholding Info/Deception Withholding Info/Deception CasesCases

◦Aluminum siding: “An aluminum siding salesperson tells customers that they will receive “bargain factory prices” for letting their homes be used as models in a new advertising campaign. Prospective customers will be brought to view the houses, and a commission of $100 will be paid for each sale that results. In fact, the price paid is well above market rates, the workmanship and materials are substandard, and no one is ever brought by to see the houses.”

◦Odometer/used car salesman: “A used car salesperson turns back the odometer reading on automobiles by an average of 25,000 to 30,000 miles per car. If customers ask whether the reading is correct, the salesperson replies that it is illegal to alter odometer readings.”

◦“Special sale” at the piano store: “A salesperson at a piano store tells an interested customer that the ‘special sale’ will be good only though that evening. She neglects to mention that another “special sale” will being the next day.”

◦Carson’s Example A: “I am selling a used car that I know has bad brakes; this is one of the reasons I am selling the car. You don’t ask me any questions about the car, and I sell it to you without informing you of the problem with the brakes.”

◦Carson’s Example B: “I am selling a used car that starts poorly in cold weather. You arrange to look at the car early in the morning on a very cold day. I don’t own a garage so the car is out in the cold. With difficulty, I start it up and drive it for thirty minutes shortly before you look at it and then cover the car with snow to make it seem as if it hasn’t been driven. The engine is still hot when you come and the car starts up immediately. You then purchase the car, remarking that you need a car that starts well in the cold to get to work, since you don’t have a garage.”

◦Real Estate Agent: “A real estate agent knows that one reason the couple selling a house with her company wants to move is that the neighbors often have loud parties and neighborhood children have committed minor acts of vandalism. The agent makes no mention of this to prospective customers.”

◦Admissions officer: “An admissions officer for a private college speaks enthusiastically about the advantages of the school. He does not mention the fact that the school is not accredited.”

◦Retirement Home Recruitment officer: “A prospective retirement home resident is under the impression that a particular retirement home is affiliated with a certain church. He makes it known that this is one of the geatures he finds attractive about the home. Thought the belief is false, the recruiters for the home make no attempt to correct the misunderstanding. “

◦Holley’s rule: the salesperson is obligated to inform customers of what an avg., reasonable person would find relevant, and more, if it becomes clear that these further details are relevant to a particular customer.

Carson’s Case D: “Mr. Mokarem informing about the pre-existing condition risk.”