Knowing your customers' rights as well as your own when dealing with the challenge of working directly with them can be gratifying as well as profitable. You may have heard stories about business owners denying customers service. Because of local, federal, and state laws, the right to deny service may be limited. These situations leave business owners puzzled about when and how they can legally refuse their customers service. Let's explore your options.
In 1964, the Federal Civil Rights Act passed, stating no business, whether it be public or private, can discriminate against customers based upon their race, color, national origin, or religion. Also, the Americans with Disabilities Act protects customers with disabilities. Federal law does allow you to refuse service to customers based upon sexual orientation.
Keep in mind that many communities have statutes in place that prohibit a business owner's refusal of a customer based upon their sexual preference or gender identity. To avoid breaching discrimination laws, you should fully understand your right to refuse service to your customers.
There are currently 21 states that protect all of its citizens from discrimination. Some of these states are:
• New Mexico
• New York
There are 16 states that have ordinances that protect 50-99% of the states. A few of these include:
Only three states have banned counties and cities from passing provisions for nondiscrimination. They are:
• North Carolina
Before making any decision that seems justified to refuse service to a customer, know your federal laws. Understand local and state rules concerning discrimination. Doing so accomplishes having to make that decision less stressful.
There are six common reasons why a business can legally refuse service to a customer. They are:
1. Customers breaking lawful rules of the business: You can enforce any lawful rules or policies you have in place for your business, such as no pets allowed.
2. Customers causing scenes or being belligerent: If you have customers fighting, causing a scene, or being too rowdy, you can legally refuse to serve those persons.
3. The customer not meeting the required dress code of the business: Signs like, “No shirt, no shoes, no service” are very common. If customers don't meet your dress code or health requirements, refusing service is legal.
4. Customers that put the staff or owner of the company in danger: If any customer threatens you or your staff or makes anyone in the establishment feel like they are in danger, you have the right to refuse your services.
5. Customers putting the business overcapacity: You can refuse service to any customer that puts you over the limit of people you can have in your establishment.
6. Customers requesting services while the business is closed: You can legally deny service to customers who do not comply with your business hours.
When dealing with a rude customer, never take it personally. Being empathetic to disappointed customers can work in your favor. Informing your staff of behaviors that will not be tolerated helps tremendously in your employees defusing situations. Understanding your rights is a top priority, but preventing problems altogether comes in second.
Denying a customer service for violating any of the six rules named above is called lawful discrimination. If you refuse service to anyone because of their physical conditions, skin color, sex, religion, or nationality, you are guilty of unlawful discrimination.
Before refusing a customer your service, make sure there is no misunderstanding to prevent putting yourself and your business at risk of a lawsuit.
Understanding the intricate details of running a small business is a task within itself. Once you get a full grasp of federal, local, and state laws about the refusal of services, you have won half the battle.
It is essential to keep in mind as a business owner your duty to get as many customers as you can. Before denying someone service, find new innovative ways to convert them into loyal customers. In situations where you don't have a choice, denying your customers service is your best option.
To be successful, it is always better to understand your customers' dilemmas, find solutions, and create a relationship that will last forever. To prevent lawsuits, speak with somebody who understands your business. An experienced insurance agent is one such person who will inform you how small business insurance protects you from these events.
Only a valid reason gives you the right to refuse to serve a customer. To ensure no discrimination, be very careful. Unless it is related to gambling, alcohol, or cigarettes, refusing service should not be related to someone's age, gender, marital status, race, or disability status.
As long as you don't discriminate, it is within your legal right to refuse to serve a customer. These rules apply to any business’s right to refusal. If you do decide to refuse someone, it has to be because of their actions. Theft, illegal activities, or threatening behavior are just a few reasons why you can refuse service.
Yes, you can deny service to customers not wearing a mask. If this is on private property, you will not infringe upon your customers' rights. When dealing with private companies, owners have the right to turn people away, and customers have the right not to give those businesses their hard-earned money.
If your policies concerning face masks are not discriminatory, you aren’t breaking the law. The best example of similar lawful rules is the “no shirt, no shoes, no service” signs you see in most establishments.
Although sometimes it is tempting to never turn down business, the reality is you will eventually have to deny service. When you do have to refuse customers service, always remember these 7 golden rules:
1. Genuinely hear what they have to say: Let the customer know you hear them by telling them you understand their position. If they’re asking you for something you can't deliver, inform them that it is out of your control without burning any bridges in the future.
2. Give the customer a clear understanding of what you can do: After you restate the problem to assure them you understand, offer different solutions, so they know you're not just brushing them off, and you're on their side. You’ll get better results by focusing on what you can do instead of what you can't.
3. Be calm and provide solutions: Being gentle but upfront with your customers is essential. Your customers are the most prized possession of your business. When you are transparent, there is a good chance they'll use your service again. Whenever you tell a customer no or refuse services, inform them of your company's policies and offer solutions. Being open and honest shows your customers steps you are taking to improve situations that occur in your establishment.
4. Prevent wasting time and burning bridges: Unhappy customers hurt profitability. Losing first-time customers is even worse. Before turning a customer away, consider your reputation. The way you deny service to a customer is critical. The key is to offer solutions and thank them for their business. Professionally handling yourself when refusing services helps customers to appreciate you instead of being angry.
5. Always decline with gratitude: You never want to have an unhappy customer. When you deny service with gratitude and kindness, you create less backlash while maintaining your values.
6. Be upfront, clear, and as transparent as possible: Not saying no is the best way to say no to a customer. When you offer solutions, go above and beyond to show them how valuable a customer they are. To avoid misunderstanding expectations, say no upfront transparently.
7. Ask the customer what they would do if they were in your shoes: When denying customers service, empathy is vital. Giving customers a clear understanding of why you are not able to provide their requests helps you not to lose their respect. When you maintain your customer’s respect, there’s a better chance they'll come back to you with more reasonable terms.
Knowing when you can and can't legally refuse service to a customer is essential information to know. If a problem can be solved with a customer through communication without causing friction, it’s best to avoid losing that customer.
If a customer is out of control or causing chaos, you may have no other option but to refuse them service. But by following the 7 golden rules above, you’ll do so in a way that retains and strengthens your customers’ loyalty.