The customer is not always right

A restaurant guest finishes their meal, then complains about the food quality and requests a discount. A customer returns a water-damaged electronic device, insisting the store honor the warranty and ignore the obvious misuse. An airline passenger moves to an empty seat in a more expensive section of the plane, despite not having paid for the upgrade.

For businesses, what are the limits to customer requests? Seventy-five percent of CEOs believe understanding customer needs is the most critical factor to driving business growth.¹ However, strictly adhering to a philosophy of "the customer is always right" is not a practical or beneficial business model. It’s a rule that can create significant problems and encourage unreasonable or rude behavior. 

The phrase "the customer is always right," credited to early 20th-century London retailer Harry Gordon Selfridge, emerged when customer service was far from the priority it is today. In the late 19th and early 20th centuries, shopping was largely transactional, guided by caveat emptor—“let the buyer beware.” Retailers often sold defective goods, made exaggerated claims and offered little support, leaving buyers to navigate these risks on their own

During this era, merchants often sold low-quality or imitation products, misrepresenting cheap fabrics and other materials as high-end or exotic. Claims of being “doctor-approved” or “scientifically proven” were common—health tonics promised to cure ailments from headaches to tuberculosis but often lacked medical validity and were sometimes laced with dangerous substances like morphine and cocaine. Chinese laborers introduced snake oil to the US as a traditional anti-inflammatory remedy, but American sellers frequently replaced it with cheaper oils or even opium. This led “snake oil” to become a term for fake cures and “snake oil salesman” for sellers peddling fraudulent products.

This unregulated environment created an opportunity for Selfridge and other retail pioneers, including Marshall Field in Chicago and John Wanamaker in Philadelphia, to differentiate themselves by focusing on customer satisfaction.

The idea behind "the customer is always right" was revolutionary because it signaled a shift in how businesses treated their customers. Selfridge, Field and Wanamaker understood that long-term success depended on building trust and loyalty, which meant addressing customer complaints and treating customers with dignity and respect, even when customer complaints seemed unreasonable. Employees were encouraged to create a more welcoming customer experience. This shift helped usher in a new era of commerce based on trust and repeat business.

Over time, the "customer is always right" philosophy has faced criticism for enabling unrealistic demands and even abusive behavior. Many businesses now favor a balanced approach, emphasizing instead that "the customer deserves to be heard.” This perspective upholds customer satisfaction while respecting employees and setting healthy boundaries.

“The customer is always right” rule overlooks the need for clear boundaries in customer relationships. When customers believe they will always win, they will sometimes take advantage by making unrealistic demands. Such requests might include frequent returns, unjustified complaints or appeals for large discounts. Catering to every demand can create confusion about what the business can realistically provide. 

Here are several reasons why “the customer is always right” is not always a sound business policy: 

• Sustainability is compromised: Constantly bending over backward to please customers, regardless of the context, creates unsustainable business practices. For example, if a business routinely gives discounts or refunds on demand, even when they’re not warranted, it can undermine revenue and lead to staff burnout. Prioritizing reasonable requests helps ensure that a business can maintain operational efficiency and a happier staff.
  
  
• Unreasonable demands waste resources: Businesses have limited time, money and personnel. Catering excessively to difficult or unreasonable customers drains resources that might be better spent on loyal, cooperative clients. For instance, spending hours resolving one high-maintenance client’s complaints might divert attention from customers who would appreciate the service and harm the business’s overall performance.
  
  
• Employee morale suffers: Constantly siding with customers, even when they’re wrong, can demoralize employees. If they feel obligated to tolerate mistreatment for the sake of pleasing customers, they’ll likely feel undervalued and disengaged, which can lead to less satisfied customers overall. Happy customers are often the result of happy coworkers—staff that feels respected and supports their employer. 
  
  
• Other customers suffer: Diverting too many resources to address the demands of a few challenging customers can spread the team too thin, harming the overall customer experience and the business’s reputation. If too many staff hours are spent addressing an unreasonable request, other customers might experience delays or feel ignored. Prioritizing everyone fairly enhances overall customer satisfaction.
  
  
• Customers are sometimes wrong: Customers are not always well informed and can have unrealistic expectations or misunderstand products. They often seek the best deal for themselves, for example, demanding a replacement for a product they obviously misused. Trying to meet their every demand, even when they’re mistaken or unreasonable, can backfire. It’s better to educate and guide them rather than simply agree with excessive demands.
  
  
• It causes conflict between management and staff: Strictly adhering to the "customer is always right" mentality can create tension between management and employees. If staff feels unsupported when they follow company policies that upset a customer, it can erode trust in leadership. Business owners who back their employees foster loyalty, better engagement and more successful outcomes for both customers and the company.
  
  
• Bad behavior shouldn’t be tolerated: Some customers take advantage of businesses that adhere to "the customer is always right" and behave poorly toward staff. If a customer is verbally abusive but the business insists on making them happy, it sends a message that bad behavior is acceptable. A supportive stance toward staff fosters a safe, respectful environment and prevents a toxic workplace culture.
  
  
• Exceeding expectations is better than meeting them: Rather than blindly agreeing with customers, businesses should focus on exceeding expectations by offering solutions that truly benefit both parties. For example, offering thoughtful alternatives or upgrades can impress customers far more than fulfilling every request. This approach maintains the business’s integrity rather than simply meeting short-term demands.

When the customer isn’t right, it’s essential to handle the situation thoughtfully and constructively. Here are some steps that you can take:

1. Practice empathy: Allow the customer to express their concerns without interruption. Show empathy and understanding, even if you believe they're mistaken. This helps to de-escalate the situation.
   
   
2. Assess the situation: Determine whether the customer complaint stems from a misunderstanding, misinformation or unreasonable expectations. Gather relevant information to clarify the issue.
   
   
3. Educate the customer: Politely provide accurate information to help the customer understand the situation. Use clear, nonconfrontational language to explain any misunderstandings.
   
   
4. Stay professional: Maintain a calm and respectful demeanor, regardless of how the customer behaves. Avoid getting defensive or engaging in arguments, as this can escalate tensions.
   
   
5. Set boundaries: If a customer is being abusive or making unreasonable demands, it’s important to set clear boundaries. Politely explain what is reasonable and what your business can or cannot do.
   
   
6. Seek collaborative solutions: Focus on finding a resolution that meets both the customer’s needs and your business’s policies. This might include alternative products, discounts or other compensatory options that are fair.
   
   
7. Know when to say no: If a customer’s demands are unrealistic or harmful to your business, be prepared to decline. Firmly but respectfully explain why you cannot meet their request.
   
   
8. Document the encounter: Keep a detailed record of the interaction, which can reveal trends with certain customers and support improvements in staff training and policies.
   
   
9. Review and reflect: After the situation is resolved, reflect on the interaction. Consider what might be improved for future encounters, both in terms of customer service and internal processes.
   
   
10. Follow up: Following the interaction, consider contacting the customer to confirm their concerns have been addressed and to reestablish rapport. This follow-up demonstrates genuine care for their experience and a commitment to service improvement.

Times have changed. For modern businesses, a more effective principle than “the customer is always right” is “the customer deserves to be heard,” or perhaps more specifically, “successful business transactions require mutual respect and collaboration.” 

This approach acknowledges that while customers should be valued and listened to, it is equally essential to respect employee dignity and well-being. Maintaining a balanced approach—where both customer needs and business realities are considered—can enable companies to create more positive experiences, resulting in loyal, satisfied customers, happier employees and a more sustainable business model.

Fostering an environment where both customers and staff interact constructively enables businesses to enhance the customer experience and build trust and accountability.

At the heart of this philosophy is empathy. By prioritizing an understanding of the customer’s perspective, businesses can address concerns thoughtfully without compromising their values or overextending resources. Empowering employees to work collaboratively with customers creates a partnership dynamic that seeks solutions beneficial to both parties. 

Establishing clear boundaries on acceptable behavior further helps ensure that everyone feels respected, protecting the business’s integrity while fostering loyal customer relationships. This balanced approach, treating customers fairly but with boundaries, leads to better outcomes and sustainable success.

Ultimately, a successful business strategy isn’t only focused on winning every customer, but rather the right customers. It’s about fostering trust and building lasting relationships with customers who appreciate and respect the business’s expertise. It’s about setting up the business and its employees for long-term success. And sometimes this means gracefully acknowledging that the customer isn’t always right.