Sales process can be an extremely gratifying experience to both buyer and seller, if it is done the right way. As per Vikas, every company should make the entire sales process buyer-centric for better results. However we often come across instances where immorality wins over ethics. Violating ethical code of conduct can be detrimental to any organisation and salesman. Some of the common unethical practices are mentioned below.
16 Unethical Practices in Sales
1. Misrepresentation: Providing false information about a product or service to deceive customers.
Imagine an education counselor at vocational training institute states that their short-term program guarantees graduates a job in a high-paying field, even though they have no actual job placement agreements or successful job outcomes. This misrepresentation could lead students to enroll based on false promises and expectations, potentially resulting in financial hardship and unfulfilled career prospects.
Imagine a car salesman telling a potential buyer that a used car has only had one previous owner and has never been in an accident, when in reality the car has had multiple owners and has been in a significant accident that required extensive repairs. This misrepresentation could lead the buyer to make a purchase based on false information, ultimately resulting in a bad deal for the buyer.
2. High-pressure tactics: Using aggressive and coercive methods to force customers into making a purchase.
A salesperson continuously pushes a customer to make a purchase by creating a sense of urgency, claiming that a limited-time offer will expire soon or that the product is running out of stock. This tactic can make the customer feel rushed and pressured into buying without fully considering their options or needs.
3. Bait and switch: Advertising a product at a low price to attract customers, then offering a different, more expensive product instead.
A classic example of a “bait and switch” tactic is in retail sales. Imagine a store advertises an amazing deal, like a brand-new smartphone for an unbelievably low price. When customers come to buy the advertised phone, they’re told it’s sold out or no longer available. Instead, they are encouraged to buy a more expensive model. The initial offer was the “bait” to lure customers into the store, and the higher-priced product is the “switch” they are encouraged to purchase. This tactic can be deceptive and frustrate customers.
4. Upselling unnecessary items: Convincing customers to buy additional products they don’t need just to increase the sale.
One of the common examples of upselling unnecessary items is when you go to salon for a haircut, and after the haircut barber suggest you do head massage, hair dye, facial or body massage.
5. Hidden fees: Not disclosing all costs upfront and surprising customers with hidden charges later.
For example, you order a biryani which is priced at 195 rs on the zomato app and on bill summary page, zomato adds GST, delivery partner fee and platform fee to make a grand total of 245 rs.
6. Deceptive pricing: Manipulating prices and discounts to create a false sense of value for the customer.
One example of deceptive pricing is when a product is advertised as “on sale” or “discounted” from a higher original price, but the original price was artificially inflated to make the discount appear more significant than it actually is. In reality, the product may have never been sold at the higher price or was rarely sold at that price. This practice can mislead consumers into thinking they are getting a better deal than they actually are.
7. Unauthorized charges: Adding charges to a customer’s bill without their consent or knowledge.
You may experience that a subscription service has been renewed automatically and charged your account without your consent or knowledge.
8. Cold calling without permission: Contacting individuals who haven’t given consent to be contacted, violating their privacy.
These calls can be very annoying. In Spite of several restrictions being imposed by TRAI time to time, some companies keep finding ways to violate and indulge in malpractice without consumers’ permission.
9. Exploiting vulnerability: Targeting emotionally or financially vulnerable customers to make a sale.
The cases of targeting selected group of people like senior citizens, uneducated, financially backward etc are on the rise.
10. Falsifying testimonials: Creating fake reviews or testimonials to make a product or service seem more credible.
Look at Times of India, highlighting such unfair trade practices by few Indian e-commerce companies.
11. Withholding information: Intentionally not sharing important details about a product’s limitations or drawbacks.
Withholding information in sales can be unethical and damaging to trust between the buyer and seller. Here’s an example:
Imagine a car salesperson who knows that a used car they are selling has a history of frequent breakdowns and requires expensive repairs. However, they fail to disclose this information to the potential buyer, instead emphasizing the car’s low price and attractive appearance. This withholding of crucial information can lead to the buyer making an uninformed decision and feeling deceived once they discover the car’s true condition, damaging the salesperson’s reputation and trustworthiness.
12. Misleading guarantees: Offering guarantees with hidden conditions that make it difficult for customers to actually claim them.
Misleading guarantees can be deceptive and harm consumer trust. Here’s an example:
A dietary supplement company advertises a weight loss pill with a guarantee that users will lose “up to 10 pounds in just one week, guaranteed!” However, buried in the fine print, it states that results may vary, and the guarantee is only valid if users follow a strict diet and exercise regimen. Many customers purchase the product expecting quick and effortless weight loss, only to be disappointed and frustrated when they don’t achieve the promised results. This misleading guarantee can lead to customer dissatisfaction and damage the company’s credibility.
13. False urgency: Creating a sense of urgency by falsely claiming limited availability or limited-time offers.
False urgency is a tactic used in sales and marketing to pressure customers into making quick decisions. Here’s an example:
An online retailer advertises a limited-time offer with a countdown timer claiming that a product is on sale for the next 24 hours only. However, if you revisit the website the next day, you notice that the same timer has reset, and the product is still on sale. This creates a false sense of urgency, making customers feel rushed and more likely to make impulsive purchases. In reality, the sale is not as time-sensitive as it appears, and the retailer is using false urgency to boost sales.
14. Overpromising results: Guaranteeing outcomes that the product or service cannot realistically deliver.
Overpromising results can lead to disappointment and mistrust. Here’s an example:
Education counselor of stock trading academy guarantees the prospect that he/she will fetch 10% monthly returns from trading after doing the course. However, even after attending the course and practising diligently in the market, students find it impossible to achieve desired results consistently. Overpromising in this way, not only fails to deliver of expectations but can also harm organisation’s reputation and credibility in the long run.
15. Unsolicited upgrades: Automatically upgrading a customer’s purchase without their consent, leading to unexpected charges.
Unsolicited upgrades can occur when a company or service makes changes to a product or subscription without the customer’s request or consent. Here’s an example:
A cable TV provider decides to automatically upgrade all of its customers to a more expensive premium package without obtaining their permission. Customers wake up one day to find that their monthly bill has significantly increased, even though they didn’t request any changes to their service. This unsolicited upgrade can lead to customer frustration and a loss of trust in the cable provider for making decisions on their behalf without consultation.
16. Unsubstantiated Claims: Making unsupported claims about a product’s effectiveness, benefits, or features.
Unsubstantiated claims can be frustrating and may tarnish Image and reputation of the company. Here’s an example.
Good hair company claiming hair regrowth in 3 months without any evidence of effectiveness may attract customers quickly but non result can be infuriating to customer.
It’s important to note that ethical sales practices focus on building trust, meeting customer needs, and providing accurate information. Moreover, ethical sales practices prioritize honesty, transparency, and respecting customers’ choices and needs.
Factors that leads to unethical practices:
Unethical practices can be influenced by various factors, including:
- Lack of Ethics Education: When individuals and organizations do not prioritize ethical training and education, it can lead to unethical behavior.
- Extreme Pressure of Performance: some bosses put extreme pressure on the team to perform during a specific timeline which may lead to individuals resorting to unethical practices for a sale.
- Competition: Fierce competition in industries may encourage unethical actions to gain a competitive edge.
- Lack of Accountability: When there is a lack of oversight or consequences for unethical behavior, it can become more prevalent.
- Culture and Norms: An organizational culture that tolerates or even promotes unethical behavior can lead employees to engage in such practices.
- Personal Gain: Greed and the pursuit of personal gain can motivate unethical actions.
- Peer Pressure: Employees may engage in unethical behavior to fit in with their colleagues or because it is seen as the norm.
- Short-Term Focus: A focus on short-term gains, at the expense of long-term consequences, can lead to unethical decision-making.
- Lack of Moral Compass: Individuals who lack a strong ethical foundation may be more susceptible to unethical behavior.
It’s important to address these factors to promote ethical conduct in both individuals and organizations.
How to Avoid Unethical practices:
Avoiding unethical practices requires a combination of personal commitment and creating an ethical environment within organizations. Here are some steps individuals and organizations can take to prevent unethical behavior:
For Individuals:
- Self-Reflection: Regularly reflect on your values, principles, and the potential consequences of your actions.
- Ethical Education: Seek out ethical training, workshops, or courses to enhance your ethical awareness and decision-making skills.
- Ethical Role Models: Identify and learn from ethical role models who exemplify good moral conduct.
- Whistleblowing: Be aware of your responsibility to report unethical behavior when you encounter it in your workplace or community.
- Conflict of Interest Management: Clearly disclose and manage any conflicts of interest that could compromise your ethical judgment.
- Moral Courage: Develop the courage to speak up and take ethical actions even when it’s difficult or unpopular.
- Consult Colleagues: When facing ethical dilemmas, seek advice from trusted colleagues or mentors.
- Continuous Improvement: Commit to ongoing self-improvement in ethical decision-making.
For Organizations:
- Establish Ethical Guidelines: Develop a clear code of ethics that outlines expected behavior and values within the organization.
- Ethical Training: Provide regular ethics training for employees at all levels to raise awareness and build ethical skills.
- Leadership Example: Leadership should model ethical behavior and create a culture of ethics within the organization.
- Transparency: Promote transparency in decision-making processes and encourage open communication.
- Accountability: Hold individuals accountable for their actions, with clear consequences for unethical behavior.
- Whistleblower Protection: Create mechanisms for employees to report unethical behavior without fear of retaliation.
- Ethics Committees: Establish ethics committees or officers to oversee ethical matters and provide guidance.
- Regular Audits: Conduct ethical audits and reviews to identify and address potential issues.
- Supplier and Partner Ethics: Extend ethical expectations to suppliers and partners in your supply chain or collaborations.
- Ethical Considerations in Strategy: Consider ethical implications in strategic decision-making, product development, and business practices.
- Continuous Improvement: Regularly assess and improve ethical practices within the organization.
- Customer Feedback: Solicit feedback from customers and stakeholders to ensure ethical alignment.
By taking these steps, both individuals and organizations can work toward preventing unethical practices and fostering an environment that values and promotes ethical behavior.