Dishonest Business Practices in Sears' Automotive Centers Essay

Dishonest Business Practices in Sears' Automotive Centers Essay

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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...


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...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.

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