This iconic American company began life in 1886 when a railroad agent started moonlighting as a watch salesman. For decades it was a retail giant, but in 1992, the company faced a crisis. Its auto service business was accused of defrauding consumers by selling them unnecessary services and parts. Let’s take a step back and examine how this happened. Sears was facing fiscal uncertainty and increased competition in the auto service sphere. It responded by rolling out an incentives and goals program, including minimum work quotas. The Sears service advisors were paid by commission, and were required to sell a certain number of shocks, brake jobs and so on each shift. Employees who didn’t meet the quotas might face a reduction in work hours.
When the complaints surfaced, the company denied purposeful fraud, but did acknowledge faulty decision-making. Commissions for service advisors were eliminated and sales quotas no longer had to be met. The company paid millions to settle lawsuits. Sears also restructured the former job title “service advisor,” which became “customer service consultant.” Despite these efforts, Sears’ auto centers struggled to win back the public’s trust.