What should I look at in a furniture store’s returns and warranty claims handling?
Ask for the written return policy, the log of returns and warranty claims, and the way each claim was resolved. Look for patterns by product line, supplier and season. Then ask how much the store recovers from suppliers versus absorbs itself, since that gap decides whether warranty work is a modest cost or a steady drain.
Warranty handling shows how the store treats customers when something goes wrong. Read a sample of closed claims from start to finish. How long did each take? Who paid for pickup and repair? Did the customer come back afterward, or leave a poor review?
Look for concentration. If the same product line or supplier keeps appearing, ask why the store still carries it. Some lines come with strong supplier support, and others leave the store to fix problems itself. Ask whether supplier credits are claimed promptly, since unclaimed credits are lost money.
Check for open claims at the time of sale. Ask for a list of unresolved complaints, items awaiting repair and customers owed refunds. Decide with your lawyer who is responsible for claims on goods sold before closing. Your accountant can say how reserves for returns appear in the financial statements, and whether the figures look realistic. Ask also how staff are trained to handle complaints, and whether they can approve a fix on the spot. Quick, fair handling keeps small problems small, while slow handling can turn a single sofa into a lasting reputation problem for the store.
Key takeaways
- Read a sample of closed claims and trace how long each took and who paid.
- Look for repeat problems by product line or supplier, and check supplier credits are claimed.
- List open claims and settle who handles pre-closing sales in the agreement.
Related reading
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Buying
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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