Nothing will ruin a replacement contractor's reputation — and drain money from the company — faster than a salesman who lies to close a deal. Misrepresentations and unkept promises can quickly lead to customer complaints, internal dissension, and even lawsuits.

To safeguard against the fallout from deceptive salespeople, replacement contractors need to have clearly communicated and fairly enforced policies and procedures that address dishonesty.

Zero Tolerance The policy at Benchmark Windows in Lakewood, Colo., is simple: Anyone caught lying is fired immediately. Company president George Sullivan tries to prevent the situation from reaching that point by asking applicants questions designed to reveal a liar's tendency to inflate performance. To weed out dishonest individuals who might sneak through, Sullivan stresses integrity during training. He asks trainees what they'd tell a customer to create the urge to buy.

“Then I just shut up and listen. They'll tell you stuff that would curdle milk.”

Joy Company Home Improvement in Warren, Mich., also has a zero-tolerance policy for dishonesty, despite being advised by some to let small stuff slide.

“We're not comfortable with that,” says production manager Mark Lance. “When they're making big promises, they're not creating proper expectations. You'll burn your market down and have a reputation you can't take to the bank.”

As a safeguard, Lance reviews each contract, which includes a clause that says deals are not final until approved by management.

That's good, but in any dispute, a judge will also weigh a legal concept called “apparent authority,” which considers whether or not the salesperson seemed authorized to present an offer, according to Bruce Packard, a Dallas construction litigation attorney. Only an employer can create apparent authority, either by what is said or done.

“They can do that by saying to the customer, ‘You deal with the salesman. Whatever he says goes,'” Packard says. Actions that create apparent authority, by default, include not returning the customer's phone calls, ignoring requests or questions, or referring the customer to the salesperson with questions.

Do The Right Thing When salespeople make unrealistic promises, Benchmark Windows and Joy Company either honor what was promised, refund the customer's money, or offer an upgrade on a particular product or service.

Benchmark Windows also gives the customer a gift certificate for a well-known local restaurant. “It's a $100 dinner,” Sullivan says. “We tell them, ‘It's unfortunate, but hopefully we can earn your trust again.' All of a sudden, they're saying, ‘Wow.'”

Those are good strategies, Packard says. Just make sure the customer knows the original offer was unauthorized.

“Most juries and courts won't penalize you for doing the right thing,” he says. “If you try to do the right thing without telling the customer, you're going to have a problem. A lot of times you don't want to air your dirty laundry, but if you don't, it can make a subsequent lawsuit much more difficult.”