Unethical Practices in Service Sector

Unethical issues in sales

Without sales, businesses die. This unvarnished truth drives businesses and salespeople to work hard at securing sales. Unfortunately, the drive to sell or pressure from management to increase sales volume often leads salespeople to use unethical sales techniques to bolster short-term numbers. Ethical sales techniques produce enduring and profitable relationships with customers, while unethical sales techniques damage those relationships and long-term profits.

Unethical Technique: Excessive Fine Print

Some businesses bury warranty limitations, performance guarantees and other information that might undermine customer confidence in the fine print. Customers only discover this information when something goes wrong and they want a refund, repair or alteration to the product. The company informs the customers that their requests are not covered, not possible, or require an excessive fee to accommodate. This deliberate obfuscation may lead to short-term sales that a more honest approach would miss, but at a significant loss to the company’s reputation over time.

Unethical Technique: Bait and Switch

A classic unethical technique, the bait and switch promises customers one thing and offers them something different at the store or on delivery. For example, a grocery store promises to sell porterhouse steaks at half the regular price. Customers arrive only to discover the store is “sold out,” except the store never stocked porterhouses from the advertised brand at all, or only has a few available that are gone quickly. Instead, it carries a more expensive brand it hopes the customer will purchase instead.

Unethical Technique: Misrepresentation

Misrepresentation takes many forms. Salespeople may misrepresent the capabilities of a product to secure the sale. The salesperson might misrepresent the actual costs of a product or offer a promotional price as though it were the recurring cost. Misrepresentation also takes the form of pretending the customer can expect product upgrades sooner than the company can possibly institute the upgrades.

Unethical issues in marketing

Ethical marketing involves making honest claims and helping to satisfy the needs of customers. Besides being the right thing to do, ethical marketing can have significant benefits for your business. For example, if customers believe you’ll live up to your word, brand loyalty will develop, customer retention will increase and your customers will tell others of their good experiences, according to the book “Marketing,” by James L. Burrow. Unethical marketing activities, in contrast, can destroy your business’s reputation and possibly lead to legal troubles.

1. Misleading Advertising

Outright false advertising is illegal. For example, reporting that your product is safe for people to use when it isn’t can land you in serious trouble. Misleading advertising might not rise to the level of false advertising, but it’s unethical and can hurt your reputation with the public. For example, if you claim your product is much better than it actually is, your company will appear untrustworthy. While it’s important to put your best foot forward in marketing, avoid crossing the line by making dishonest or exaggerated claims.

2. Exploitation

Manipulating people by exploiting their fears is unethical. For example, exaggerating the risks people face so you can sell them insurance is a form of manipulation, as is tricking your customers into buying overpriced or useless extended warranties. This approach is called the “fear-sell” tactic and is especially nefarious when it targets people who are disadvantaged in some way. For example, the fear-sell tactic is often used by insurance salesmen to trick low-income earners into buying unnecessary insurance, according to the book “Critical Marketing,” by Mike Saren and colleagues.

3. Spam

Delivering a sales message to potential customers is part of a marketer’s job, but it’s unethical to flood consumers with an onslaught of advertisements especially when they have not given you express permission to contact them. For example, email spam and robo-calling using automatic dialers to contact many people without permission, typically are unethical marketing activities. Further, these practices might anger customers rather than attract them to your business.

4. Pushy Sales Tactics

It’s a salesperson’s job to convince customers to buy a product, but being overly aggressive is unethical. For example, suppose a customer seems interested in a purchase but asks for more time to consider the deal. An unethical salesperson might bully the customer into making a quick decision, perhaps by lying about how the deal will expire soon or how another customer is interested in the same item. The line between being persuasive and being a bully isn’t always clear, so it’s more ethical to focus on helping customers make informed decisions rather than focusing on making the sale at any cost.

Unethical issues in advertising

In modern times, advertising has been playing a significant role in our socio-economic life. It is considered an effective and cost efficient tool for communication. Though advertising is used for non-economic purposes, it is highly used to attain business objectives. In this era of globalization and deregulation, advertising has acquired a new status. Technological advances have added new feathers to the entire gamut of advertising, and hectic competition has made advertising more powerful in the process of attracting and holding customers. As a result, advertising has been the victim of criticisms and abuses. Different social thinkers and other organisations throughout the world express their serious concerns on the role advertising plays. It is normally believed that most of the advertisements today are the embodiment of unethical practices. Most of the advertisements are viewed as offensive, indecent, vulgar, repulsive, and against public decency. More particularly, it affects children negatively. The present paper makes an attempt to examine the attitudes of consumers regarding advertisements. The paper is based on an empirical study with a sample size of 100 respondents consisting of university teachers, students, and the common consumers. Appropriate statistical tools have been used for analysis and interpretation.

Advertising is considered unethical when

• It gives false information.
• It degrades the rival’s product or substitute product.
• It makes exaggerated or tall claims.
• It is against the national and public interest.
• It gives misguiding information,
• It conceals information that vitally affects human life.
• It is obscene or immoral.

Forms of Unethical Advertising

1. Alcohol Advertising

Alcohol advertising is banned on broadcast and print media in India. But we can find manufacturers of alcohol advertising for Soda, in an effort to keep the brand name afresh in the minds of the consumers.

2. Tobacco Advertising

Tobacco advertising is considered an unethical advertising practice. All cigarette advertisements should carry a Statutory warning that Smoking is injurious to health in order to highlight the risks involved. But in reality, the advertisers release very colorful and catchy advertisements of cigarettes that give an impression, especially to the youth that smoking cigarettes is indeed graceful.

3. False Claims

(a) If an air-conditioning company advertises that it uses imported compressors in their machines for ensuring better performance while actually using an indigenously manufactured one, then it is a case of false claim.

(b) Advertisements offering mixtures and substances that claim to possess the ability to prevent people from ageing are categorized as unethical.

4. Exaggerated Claims

Such claims include those that make an assurance which may not be true. For example, if a shampoo manufacturer claims that their product will remove dandruff in hair forever even when used only once, is a case of an exaggerated claim.

5. Unverified claims

The language used in such advertisements will be quite ambiguous. For example, if a company advertises that its product offers instant hi-energy drink for children. But the question arises what do we mean by instant hi-energy drink and what are its parameters? And also if there is no scientific verification of the energy it possesses, such advertisements are included under unverified claims.