Gateway Customer Service - What Not to Do and The Power of PR

An article in the Sacramento Bee about a stubborn PC owner that decided to bring Gateway to small claims court illustrates several good points about bad customer service, bad approach to business and to PR. A customer that received a defective computer, couldn't get it fixed, says he didn't receive a replacement machine and decided to take Gateway to small claims court instead of arbitration. Gateway now scrambles to bury the customer in legal costs and complications... all typical legal maneuvering and bad management.

This is a great example of how bad customer service tends to snowball into a costly problem: had Gateway reps or managers had had the power or the foresight to replace the computer, had been savvy enough to ship the new machine with receipt/signature confirmation, the problem would have been contained. Instead, the primary economies of the problem are all wrong now: imagine that the machine cost $1,000, and there are two options: send a new machine or follow the course that Gateway has chosen. In the first case, Gateway would have been out $1,800 ($2,000 minus the corresponding margin - say 20%), in the second case, assume 5, 45 minute calls at about $50 a call which comes to $250... eliminate the margin on the machine. Then throw in 5 hours of legal work at $300 an hour... by the time Gateway "wins" the case, it will be deeply in the red on this sale.

Add to this the erosion that the brand suffers from a case like this and you get a sense for how bad this whole idea of pursuing the case really was.

And on another vein... what's with this arbitration craze? Sure it is cheaper to put a case through arbitration than through the courts but I am not sure I see how that benefits a firm!? From a Machiavellian perspective it seems that the costs of a court case would deter most customer complaints, from a customer perspective it seems that arbitration is akin to resorting to a parallel legal system that is skewed towards the companies (even if it isn't, remember, image and perception are also areas that need to be managed), there is a fear of class action suits but, please, are most products really so bad that they warrant this fear?

All in all we go back to some basic parameters: superior products backed up by superior customer service go a long way to protect against risk; also, customers support managers must be equipped with the knowledge and power to know when to yield to a customer complaint.

Comments

[Christopher Smith]

Adelino,

Wow, I wish I would have read this post before I bought a Gateway machine. Don't get me started on the ordeal that I just went through to return a defective LCD monitor that I bought from Gateway: hours and hours w/ the technical service chat, followed by hours and hours w/ the returns department (mostly on hold) topped off by a $50 fee!

Any masochists out there who want to read the whole story for themselves can check it out at http://www.equityscout.com/trouble-with-gateway-computers.

From their peak of around $84 Gateway is now trading at $1.87 and is about to be gobbled up by Taiwanese manufacturer Acer. As Gateway has spiraled into crisis mode it appears that their strategy has been to throw up so many obstacles in the face of customers trying to return a defective product that they simply give up.

It doesn't take a particularly smart businessperson to figure out that this is a pretty sorry strategy. I hope Acer knows what kind of culture they've just acquired.

[Carla Moore]

I too have just been through a hellish ordeal with Gateway. This is my fault for failing to do due dilligence as a consumer. Gateway Computer has the worse attitude towards customers of any company I have ever done business with. They also have the worst products I have ever purchased from any computer company. Within days of getting the laptop I could not get on the internet using the wireless network card built into the machine, the cd/dvd rom drive never worked, and the machine is incredibly slow. The operating system is Windows Vista, which requires at least 1Gig of ram to run properly. Gateway only installed 512MB of ram. Again, I learned all of this AFTER the fact.
I called corporate, and they are worse than the people on the tech support line. They have a very hostile attitude towards their customers and one actually told me, very smugly, "why didn't you read up on the computer before you bought it." They are nasty and they could care less about the inconvenience and trouble they put you through as a consumer. Take it or leave it, is their attitude. I think I'll leave it--forever. Glad to know ACER is acquiring them. I'll be sure to steer clear of them too.

[Marcie Sellew]

Never another Gateway again. I had a problem with my new computer overheating and shutting down and the internal battery was bad. My clock would not update or keep time if manually set.
I sent it in to be fixed and it has been over 6 weeks. Customer service says it is coming back and Service operations says there is no service order. I had to have a service order to send it. Service operations says they have no contact with customer service. I am getting the run around and have been without my computer now for this whole time.
The customer service people seem to have no authority or method to really resolve any problems and just shuffle consumers in an endless loop of "please wait".
I have owned several Gateways computers over the years. My destop has been nothing but a problem (I won't dare send this in) and now the laptop is gone and I seem to have no prospect of getting it back in the near future.
I would strongly recommend that people look at SONY. My little Sony has been the only saving grace here. It keeps going and going. DON'T BUY a GATEWAY no matter what they are called.

[Catherine]

I have owned quite a few Gateway and desktops and I have never had a problem until I purchased a Gateway Notebook. The hinge on the back of the notebook broke the computer was working fine. I had to send it in for this to be repaired when I pay for in-home service. They told me within 3-4 business days. It is now 4 weeks later, and the part has still not come in from China. I told them I wanted my notebook returned to me and I was unable for 5 days to get through to the service department and could only get to tech support or customer service. they are refusing to send it back and I think they can't even get to the service department. It has been an absolute nightmare and I can assure you I will never do this again. My daughter has a Dell screen broke and within two days they were in my home fixing it.

[Judy]

Well, I have just experienced Gateway Customer Service and wish I had spent some time checking them out before buying a desktop. The technician was rude and chewed me out for not sending in my computer when I first received the shipping box. He actually told me my computer might come back to me un-repaired because I didn't send it in "timely". He mocked me when I said I had been on vacation and said it must not have been very important if you went on vacation without sending in your computer???? Where do they get these people.

His supervisor told me it would be repaired but if the service ticket expires it would not be re-issued and I would have to pay for the shipping (shipping isn't part of the warranty). This has been a 9 month ordeal, and it sounds like it is just beginning since there is a chance I won't be seeing my computer anytime soon....GREAT!!

[Robert]

I had to buy a seperate cell phone for my Gateway ordeal. So far I have logged 45hours on hold.
Rotten customer service, rotten product, Sent it in for repair back in July of 08.
I sent it back in the same box they sent me to send it back to them.They said its been fixxed but they cant deliver it to me because they said they dont know my address.
I also did the chat thing but that was a total bomb.
Im going to speak with Best Buy where I got it and put some heat on them .I just might end up not paying for it.

[eric]

I'm going through my little ordeal after buying my cancer stricken mother a new desktop. I have a system that will not output video though the system boots. The only way to get video to work, is disconnect the Gateway monitor and re-seat the eletrical cable.

I'm pretty technical and I've built a 100 machines and I've worked for another computer manufacturer a long time ago. I know how to talk to technical support and I know when I am being BS.

The first tech turned off the system error logging. Told me that would fix it. Beside from almost laughing, I did this. Of course this did not work.

I've had other techs play around with various timing settings with the power up routines.

After about 15 phones calls ( and note, I had gone through and reset the BIOS settings and attempted several times to change power settings. At one point, I completely turned off power saving features both in the BIOS and the machine, and this did not fix the problem. Ergo, I'm fairly confident this is a motherboard bios issue with the embedded video card. )

What peeves me was I finally got to 2nd level tech and he sent me a set of DVD restore disks because I had all ready attempted to re-image the software from the disks I made and that failed. The DVD restore disk also failed. The kicker was the stupid thing failed because it ran out of room on the separate partition Gateway installed on the hard drive.

During the course of my troubleshooting, I've replaced the HDMI cable with an analog cable to rule out an issue with the HDMI settings on the monitor. I've also installed the latest monitor software and reset the configuration on the monitor.

Now they want me to pay to send it back to them to be fixed. I'm ticked off because first I have to pay to send it off. Sounds like from what I'm reading here, even sending the system off to Gateway will result in not seeing the unit for several weeks.

I'll be talking to Best Buy too this week. Someone is getting a boot up their a$$.

[Used Refurbished Laptops]

Acer is in the top 5, and I thought about that when writing the statement, what I am really talking about is known to consumers, and I was thinking about those people who generally go to buy a computer at a physical store/aren’t too involved in technology. Also I’m talking more about the US where people recognize Sony, HP, Dell, and others before Acer. I might edit the statement in my review if I have a chance so it better reflects that.