Several years ago we were expanding into a new market in the Northeast. In order to facilitate our expansion without investing in buildings or local assets we decided we would try to expand by contracting with a third-party warehouse to store and ship material in the local market. For a fee, they would unload truckloads of inventory into their warehouse, store it, maintain accurate inventory numbers and as needed pull orders and load them into the trucks of local clients. It was a great way to expand without investing a huge amount of resources.
During that expansion we met a client named Charles. Charles was a qualified lead for us and we soon turned him into a repeat customer. As our relationship progressed, Charles would call our office and place an order, we’d prepare the paperwork, send it to the third-party warehouse to pull the order and make it ready for shipment. We would then call Charles and tell him when it would be ready to pick up. After a few successful transactions we even extended Charles a little bit of credit. Just as we thought the relationship was solidifying something happened that ground things to a halt. Charles stole from us.
The warehouse had received paperwork for 15 bundles of product for Charles to pick up. Bill, one of the warehouse employees, had taken a full pallet of material out to the parking lot to load into Charles’ van. As he was getting ready to offload the 15 bundles there was a loud bang in the warehouse and Bill ran back inside to make sure no one was hurt. When he returned to the parking lot he discovered the entire pallet of product, all 36 bundles, were gone. And so was Charles. Bill raced back to his paperwork to confirm what he already knew to be true. The pallet contained 36 bundles of product and Charles’ order was for only 15. This was not a mistake. Bill immediately called Charles on the phone and politely let him know he had taken too many bundles of product. Charles flatly denied taking the extra bundles of product and after further questioning from Bill, Charles simply hung up.
I received a call from Bill explaining what had happened. I asked Bill if there was any way he could be mistaken about what had occurred. But the facts were unmistakable, and Bill was absolutely certain. There was no one else around the parking lot and he was sure that Charles had made off with the product. He apologized profusely, explaining that when he heard the loud bang in the warehouse he was concerned that someone might have been hurt so he ran in to check. I told Bill he did the right thing and that I’d figure out how to handle the situation with Charles.
I was furious. My first instinct was to get on the phone and call the police and report what Charles had done. The value of the lost product was around $750, which was a lot to a young company like ours. But more than just the value of the product I wanted justice. Wanting to inform the owner of our company what had taken place I immediately called him and explained the situation and told him the next call I was going to make was to the authorities. Instead of agreeing, he calmly said “Sam, you know these things happen and the reality of the business world is you have to learn from them. So we need to reevaluate our protocols and make sure it doesn’t happen again. But there is another reality and that is this. Charles has likely pulled this kind of shenanigan with other people and they have probably severed ties with him because of it. So if we tighten up our protocols and make sure it doesn’t happen again we could keep our relationship with Charles intact. It might even give us a long-term opportunity to help him see what good business practices look like. I’m sure in time, we’ll get our money back“.
While I could understand what he was getting at, it still left a feeling of injustice lurking in my gut. If we didn’t do anything then weren’t we just letting him get away with it? And what did it say about us as a company if we just rolled over like that. The owner then asked me to do something I hadn’t expected. “What I’d like you to do is to call Charles and let him know that we know what he did without telling him we know what he did”. How was I supposed to let Charles know that we knew he had taken the product without saying that we knew it. After careful thought and some scripting I figured out how to get that message across to Charles. Then we tightened up our procedures and moved on.
Was it worth it? It’s been several years since this incident took place. Do I still wish I’d stood my ground and pursued justice? Well it certainly still irks me when I think of it. But on the other hand, our relationship with Charles, with the proper protocols in place, has actually become what we had hoped at the outset. We ended up getting our money back albeit in a different manner. Since the incident. we’ve sold over $3,000,000 worth of product to Charles. Furthermore we’ve made a concerted effort to model what good business practices look like.
I’d like to think that the mercy Charles experienced that day changed his life, but to this day I’m not sure it did. What I did learn is that my felt need for justice is not usually the right thing to lead with, and that giving someone a second chance, even when they may not deserve it, often works out for everyone’s best.