Dishonest Business Practices in Sears' Automotive Centers Essay

Dishonest Business Practices in Sears' Automotive Centers Essay

Length: 1531 words (4.4 double-spaced pages)

Rating: Powerful Essays

Open Document

Essay Preview

In the early 1900’s the economy was changing, and the automobile industry was booming. Sears, Roebuck began as a small mail order company, and later transformed into a nationwide chain of retail department and specialty stores, which included appliances and auto service centers (Emmit, Jueck and Rosenwald, 1951). In the late 1980’s Sears began to see a drop in revenue due to similar market retailers setting up shop nationwide. This created a number of hardships for Sears. On June 11, 1992 The California Department of Consumer Affairs charged seventy-two of Sears, Roebuck’s auto repair centers with defrauding customers by performing unnecessary service and repairs (Fisher, 1992). The Department’s Automotive Repair division charged Sears repair centers with fraud, false advertising, failure to clearly state parts and labor on invoices along with making false and misleading statements a (Fisher, 1992). This case is unique because, it was the first time The Consumer Department of Affairs had targeted the statewide operations of a company (Gellene, 1992). This paper will discuss the events that led up to over forty states seeking the revocation of licenses held by Sears auto centers, along with the types of fraud committed.
In February of 1990 The California Department of Consumer Affairs conducted an 18-month undercover investigation into auto repairs performed at thirty-eight Sears’ automotive centers. This was due to a nationwide increase in consumer complaints in regards to repairs performed at Sears automotive repair centers. Complaints began to pour in, after Sears switched employee wages from hourly to commission. Cars that were in gently used condition, were taken to Sears for mechanical inspections, and were overcharged an av...

... middle of paper ...

...ers to ensure that its automotive repair centers were not engaging in fraudulent practices. The company also agreed to be more descriptive when recommending repairs to its customers. Shortly after the settlement Sears eliminated over 10,000 full-time and part-time service center positions. The company closed many of its automotive repair centers, claiming that it would focus on selling tires, batteries, and brakes. Sears stopped offering tune-ups, engine diagnostics, radiator services and other repairs (Mateja, 1993). Despite the efforts of Sears, the auto repair industry still has a reputation for bilking customers into paying for unnecessary repairs and services. As a consumer it is difficult to know, if you are being treated fairly, unfortunately there are not enough measures and laws put in place to ensure consumers are protected from shady business practices.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Business Analysis: Sears, Roebuck, and Co. Essay

- Sears, Roebuck, and Co. seemed to have the right idea when beginning their business in the late 1800s. Instead of just opening up one type of company, Sears, Roebuck, and Co. expanded from retail to insurance, real estate, securities, and credit cards (Nelson, 2007, p. 207). Until the early 1990s, the company seemed to be doing very well considering the revenue and earnings reported that equaled up to billions of dollars. Then, the company began to experience financial difficulties due to the fact that other discount retailers were coming into business....   [tags: Business Analysis ]

Powerful Essays
1063 words (3 pages)

Sears 's Acquisition Of Sears & Roebuck Company Essay

- Hoffman Estates, Illinois-based Sears Holdings Corporation was formed as a result of Kmart Holdings Corporation’s acquisition of Sears & Roebuck Company. It was incorporated on November 23, 2004. It is an integrated retailer and holdings company to a variety of well-known, highly-quality consumer brands. As of January 31, 2015, the company operated just under 1,800 stores. Of that number, 990 of the stores were in operation under the Kmart banner, and 810 were operating as a Sears store. Of the 990 Kmart stores in operation, 979 of them are traditional stores....   [tags: Sears Holdings Corporation, Kmart, Sears]

Powerful Essays
722 words (2.1 pages)

Sears Holdings Corporation Is An American Holding Headquartered Essay

- Sears Holdings Corporation is an American holding headquartered in Hoffman Estates, IL. is the parental company of retail brands, Sears and Kmart. It was formed after the merging of Kmart Holdings Corporation and Sears, Roebuck and Co. Besides the Sears and Kmart, the Sears Holdings also own the brands Craftman, Kenmore and DieHard. It has 3,472 retail locations under the operating of Sears, Kmart, and other subsidiaries. The businesses of Sears Holdings cover retail, home services, auto centers, pharmacies etc....   [tags: Sears Holdings Corporation, Kmart]

Powerful Essays
723 words (2.1 pages)

Essay about The Organizational Management Of Sears

- I. Introduction: Background for the issue your team analyzed Poor organizational management, failure to innovate and adapt to the environment, and an outdated brand image have all contributed to Sears massive decline. By not setting a clear organizational strategy, executives of Sears strayed away from innovation, allowing for competitors to attract Sears loyal customers to their organization. In addition, the outdated brand image of Sears has failed to meet the ever changing customers of today’s society....   [tags: Sears Holdings Corporation, Kmart, Craftsman]

Powerful Essays
1043 words (3 pages)

Essay on The History Of Sears And Kmart

- Sears, a company spanning 131 years that began as R.W Sears Watch Company was once the largest retailer in the United States. Kmart, its runner up, began as a general retailing store just thirteen years after Sears as S.S Kresge Company in 1899. Sears had been the largest retailer in the United States until Wal-Mart rose and surpassed them, and Kmart bought out Sears and merged the two struggling companies in 2005 (Meyer, 2017; New York Times, 2002). From there, Sears and Kmart have been steadily making their way towards what many believe will be an inevitable closing....   [tags: Kmart, Sears, Great Depression, World War II]

Powerful Essays
935 words (2.7 pages)

Swot Analysis Of Sears Holdings Corporation Essays

- SWOT Matrix Below SWOT analysis lists some internal strengths and weaknesses and also compares with the external opportunities and threats. The SWOT analysis of Sears Holdings Corporation is as follows: Strengths • Brand equity • Strong retail network • Diverse & multicultural customers • Strong management team • Customer loyalty program • Strong technical infrastructure • Broad product offering Weaknesses • Customer Service • Old look and feel • Domestic markets are saturated • Store popularity • Poorly maintained and staffed stores • Uninspiring merchandise • Low Inventory turnover • Slack quality control Opportunities • Emerging markets • Increase brand awareness • Strong e-commerce b...   [tags: Sears Holdings Corporation, Kmart, Retailing]

Powerful Essays
718 words (2.1 pages)

The Sears Grand Concept Essay

- Firstly, SHC would seek to build upon and ultimately expand on the Sears business practice of off-mall stores carrying consumable goods, which was known in the retail world as the Sears Grand concept. Pre-merger, both stores experienced major losses of consumers who turned to savvier, more innovative rivals, therefore making ‘traffic building’, i.e. market share and customer loyalty, a primary objective. SHC saw consumables as the avenue or vehicle that would build and redirect traffic back to its stores and it was felt that the Sears Grand concept would be an effective counter to the loss of consumers by utilizing Kmart's experience and know-how in the consumables and apparel industry....   [tags: business strategies and analysis]

Powerful Essays
716 words (2 pages)

Business Model Analysis of Wal Mart and Sears Essays

- Business Model Analysis of Wal Mart and Sears While both companies belong to the retail industry (where sales of products and services are the source of business), Sears and Wal-Mart have very different business models. Making an analysis of the profitability of the shareholder can be seen that although both companies have similar returns, the source of this return is different. As shown in the table above, both companies have returns on capital near 20%, although the source of profitability differs among them....   [tags: Business Analysis Strategy Compare]

Free Essays
1962 words (5.6 pages)

Essay on Kmart and Sears Marketing

- A focused cost leadership strategy would be appropriate, in other words, a attention to consumers. Cost focus is a strategy that will focus on a particular buyer groups or a geographic market and attempt to serve only that place, to the exclusion of others. When looking at cost factors, there are very few options available to K-Mart in developing a pricing strategy to compete with Target or Wal-Mart. Therefore, K-Mart would not have many price strategy options available. However by using a cost focus strategy, and matching the quality of well known brands but keeping cost low by eliminating advertising and promotional expenses will save K-Mart money....   [tags: Business Analysis]

Free Essays
850 words (2.4 pages)

Sears Essay

- Industry Analysis John Wanamaker created the first department store in 1876. This was a new idea of combining many specialty stores into one large store. Wanamaker also pioneered the use of price tags, money-back guarantees, newspaper ads, and white sales. His first store was a men's' and boys' clothing store in partnership with his brother-in-law Nathan Brown. Business grew during the Civil War, and by 1872, was the largest clothing retailer in the nation. A much larger store was created in 1876 which sold men's and women's clothing as well as dry goods, housed in a former railroad depot....   [tags: Management]

Powerful Essays
3643 words (10.4 pages)