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Duty of disclosure

Duty of disclosure

My subject today isn't as clear-cut as you might at first think. I'll illustrate it with an example most of you will have experienced, either as a salesperson or listening in on a sale. The customer has preconceptions about the thing they're buying and, as they buy it, verbalises these facts to the salesperson. The trouble is, they're always wrong to some extent. Either they've jumped to an incorrect assumption, or been misled by someone else.

"I've decided to buy this Krakatoa brand CD drive because it works at 48x speed, and that's gotta be better for playing music," they explain. Thoughts rush through your mind. "It isn't 48x, it's only 24x at very best, and probably averages around 8x. High speed is of no use in playing music. Faster drives often make annoying noises and take a long time to come up to speed. He's paying twice as much as the 18x drive that would do him just as well." And so on.

In this case, you may say: "It's what he wants, so why should I spoil his day?"

But what if YOU were out buying a new car, and you've decided that the GLQ model, with its V8 engine, is just what you need for towing the caravan. It isn't the model name that suits you, just the bigger engine that is only available on the GLQ. Now it so happens that there's a factory discount on the GL model this month. For the same price ($10,000 less than the GLQ) they're including the V8 engine. It doesn't have some of the extra doodads like an electric ashtray, but that isn't what you're buying the car for anyway, and $10k savings are well worth having.

The trouble is, even though you've told him why you want the GLQ, the salesperson decides not to tell you about the special, so you buy the dearer car. When you find out you're livid, but the salesperson hasn't done anything illegal by withholding the information. When pressed he says things like "You had your heart set on the GLQ." Or "The GLQ is the best machine for you. Features like the electric ashtray will give it a much higher resale value." Or "You asked for the GLQ. You never mentioned the GL."

What he'll never say is: "I get a better commission for the dearer car, so why should I sell you a cheaper one?"

It's not for anyone at ARN to tell you how to sell something, but it never hurts to put yourself in the shoes of the person you're selling to. If it was you buying the item, would you like to be told that bit of information? Yes, I know it takes valuable time and sometimes loses you a sale, but isn't that what service is all about?


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