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Real Deal

Real Deal: The Case of the Costly Conundrum




Editor’s Note: Real Deal scenarios are inspired by true stories, but are changed to sharpen the dilemmas involved. The names of the characters and stores have been changed and should not be confused with real people or places.

Dr. Ed Duffy was convinced that he was among the last of a dying breed. He was the only independent “family doctor” left in town, and he was loyal — to his patients, to his suppliers, to his country club and Rotary friends, and to the local merchants with whom he’d done business throughout his 78 year life.

Peggy Clayberg, owner of John J. Clayberg Jewelers, loved customers like Ed. Her grandfather had sold Ed his first engagement ring 53 years ago. Her father sold him the steel and gold Rolex he bought as a 40th birthday present for himself back when the store still carried the brand, and Peggy herself sold him the 3-carat stunner he bought for his second wife back in 1996. As she thought about it now, she really hadn’t seen much of Ed since he and his wife had that ring re-designed for their 10th anniversary.

Peggy was delighted to see Ed back in March of last year when he brought his prized Rolex in to replace its badly scratched crystal. She gave him the option of either sending the watch back to the factory or sending it to Clayberg’s Rolex-certified watchmaker. As he had every time he brought the watch in for routine service, Ed chose to use the repairman. He’d always been satisfied with the quality of work, and the cost was about half that of the factory. This time, Peggy’s repairman quoted $290 for the job, while the cost from the factory would have been $600. Peggy found it a bit odd that Ed took issue with the normal six-week turnaround time on the service, since he’d never objected in the past — but once she explained the time needed for the work itself as well as for the pressure testing, he seemed to be fine.

Ed picked his watch up in mid-April and was happy, as usual, to have it back. It looked great, and worked perfectly. All appeared to be well until late October, when he came back into the store, obviously upset. He handed Peggy his watch and demanded that she send it back for repair — at her expense. When Peggy looked at the watch, she could see water under the crystal, and rust on the dial. When she took the back off, water literally poured out of the watchcase. She noticed that the crown was unscrewed and pulled out. When she asked what happened, Ed explained that he’d just returned from a Caribbean vacation where on the second day of the trip, as usual, he wore his watch in the pool. He was extremely unhappy when he noticed that water had somehow leaked in. He kept the watch in the hotel safe for the rest of the two-week trip, and brought it in as soon as he got home. When Peggy pointed out the opened crown, Ed hesitated, then insisted that it was screwed down, but that he opened it up to try to get some of the water out.


Peggy agreed to take the watch in, but explained that she could make no commitment with regard to cost until she spoke to her watchmaker. Ed made it clear that he was expecting the repair to be done at no cost to him, and that he expected it to be done at the Rolex factory, since the repairman obviously didn’t do it right last time.

After examining the watch, the watchmaker told Peggy that the movement was totally rusted, and that the reason for the damage was a hairline crack in the crystal around the bezel that had probably been caused by a sharp blow. The watchmaker said he was certain that the crystal was not cracked when the watch was pressure-tested after the crystal was replaced. Ed, however, was insistent he had done nothing to damage the watch, and that the problem was caused by the watchmaker’s “incompetence.”

All Peggy knew for certain was that a reconditioned, previously owned Rolex to duplicate Ed’s destroyed watch would cost her at least $2500 — not much more than her watchmaker would charge for a new movement and crystal. At Ed’s insistence, she sent the watch on to Rolex factory service and was waiting for their estimate for repair.

The BIG Questions
Ed has been a good customer of the store for years. Despite the fact that the damage to the watch was clearly his fault, should Peggy just take care of it? As a customer, Ed is near the end of his buying cycle. Is the $2,500 it will likely cost to remedy the situation bigger than the value of his future business? Should Ed be treated differently than a customer more likely to buy more from the store in the future? By challenging Ed, is Peggy risking his goodwill and that of all of his country club and business connections? When is principle more significant than the potential money attached?
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