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Home Depot Needs to Rebuild Customer Service. Shareholder Recommends Shopping at Lowe's Instead.

Many can recall when the first Home Depot stores opened up in their region. Home improvement retail chains such as Pergament and Rickel quickly folded when they could not meet Home Depot's lower prices. With over $5 billion in annual sales, Home Depot seems to have a successful sales strategy and price advantage over it's competitors.

I myself, have been a long time loyal Home Depot customer and shareholder of Home Depot stock (and continue to be as of writing this article on October 6, 2005).

So when a company is in a dominant position in their industry, what could possibly cause Home Depot to lose sales and market share ?

After going through the worst retail experience ever with the Home Depot store located at 980 3rd Avenue in New York City, I can no longer support shopping at this retailer. Instead, I highly recommend you take your business to Lowe's instead.

You read correctly. A Home Depot shareholder with no financial stake in the Lowe's Corporation, is
recommending that you shop at a store that fully understands customer service and support.

First, let me explain the New York City Manhattan marketplace. With it's high density and lack of parking spaces, Manhattan shoppers do not have the luxury of driving their cars to Home Depot and carting off their purchases. Large purchases can be shipped to your home address for a shipping fee of $21.

One Sunday evening, I purchased 20 items from the 980 3rd Avenue Home Depot store and arranged for shipping. Since I am fortunate enough to have a 24 hour doorman service at my apartment building, delivery was made Monday morning.

Unfortunately, one of the items was damaged. When I contacted the store that evening, the customer representative received my information and said the store would pick up the damaged item and drop off a new replacement between 6:00 AM - 9:00 AM Tuesday.

On Tuesday evening, Home Depot failed to make the scheduled pick up and drop off.

Once again, I contacted Home Depot and spoke with the customer service representative. There was no record of my call on Monday evening. Unbeknownst to me, I was then transferred to a third party outsourced shipping company (Select Trucking). It immediately became clear that this individual was not a Home Depot employee and had no authorization to interact with customer service issues.

I then had to place another call to the store where I was told that I should call back in 30 minutes to an hour because the store was busy.

After placing a third call to the store within a 25 minute period, I finally spoke to Francisco with what would be the most professional person at this store location. Francisco again verified that Home Depot had no record of my call on Monday for the pick up and drop off. As such, I provided my information to Francisco again and scheduled another pick up and drop off for Wednesday 6:00 AM - 9:00 AM reiterating that I have a 24 hour doorman.

When I requested to speak to the store manager, apparently, no one was in charge because no manager or assistant manager were at the store.

I also contacted Home Depot's investor relations department via e-mail with detailed information about the lack of internal controls and customer service.

On Wednesday morning, Home Depot actually picked up the damaged item but unfortunately dropped off another damaged item. The item in question is a 12 gallon storage crate, where the damage is easily visible. It should never have been dropped off to me.

Once again, I had to place several calls to Home Depot on Wednesday evening. I left a few e-mails with multiple individuals who were supposed to be managers or assistant managers. I finally spoke with an individual named Vinnie who stated that he was an assistant manager at that store location.

Vinnie assured me that a new pick up and drop off would take place on Thursday 6:00 AM - 9:00 AM.

On Thursday morning, Home Depot fails to show up. I manage to locate Home Depot's Customer Care hotline number (the call center is probably based near Atlanta). Amy, the hotline representative gasped in disbelief when I recounted my unresolved issue with her. To her credit she placed me on hold and contacted the store immediately. The store claims there were trying to contact me to schedule a delivery time. Once again, I reiterate that I have a 24 hour doorman service and that Vinnie the assistant manager was to have arranged the delivery.

Enough is enough. Senior Management at Home Depot's Corporate Office needs to evaluate the internal controls and employee performance at this location.

Let's summarize the immediate problems:

1) Lack of internal control procedures. There is no reason why any customer service issue should be lost or deleted. If the calls are recorded or logged, internal audit should find out which employees are accountable and set up procedures to ensure this does not happen again.

2) Lack of proper staff training and evaluations. No customer service representative should ever transfer a customer to a third party outsourced representative. The retail sales experience should be seamless. Once I pay Home Depot, Home Depot is responsible from start to finish of the transaction. In addition, no customer service representative should ever tell a customer to call back 30 minutes or an hour later since we are busy. These employees need to be held accountable and terminated.

3) Lack of follow up from management. I have yet to receive any follow up calls despite leaving voice messages with multiple managers at this store location. I also have not received any response from Home Depot's investor relations.

As of this writing, the issue is still unresolved. Home Depot just doesn't seem to care about customer service. Yes I am a Home Depot shareholder that is fully recommending you take your business to Lowes or any other competitor.

2005 Nelson Chin. All rights reserved. No reproduction of this article in any format including electronic is allowed without the expressed written consent of the author.

To inquire about consulting or speaking engagements, e-mail: Nelson Chin

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Conflicts of Interest v1
Conflicts of Interest v2
Conflicts of Interest v3

Audit Committee v1


Sarbanes-Oxley Act of 2002

Final Arthur Andersen Alumni Letter

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