When Should You Refuse Service As A Sole Trader?

As a sole trader, you face the burden of the decision-making process on who to serve. Taking on the wrong customer or client can be detrimental to your business and brand image, making it critical to understand when to refuse service.

Each industry will have different procedures in place on who to avoid; however, disruptive, bargaining, intoxicated, and underage customers should all be avoided along with those who increase your probability of having a liability claim.

Reasons You Might Refuse Service As A Business Owner

Disruptive Customer

The first group of customers you should avoid is disruptive ones. These customers not only cause you a headache, but they can also drive away current customers, especially if you are operating at a storefront.

Racial slurs, derogatory comments, and yelling at you and your staff all fall into the disruptive category. One video of you or your employees losing their cool trying to contain these customers can harm your brand image and lead to lost revenue.

Bargaining Customer

The next class of customers to refuse service to as a sole trader are bargaining customers. These are customers who don’t want to pay the full price for your services and are trying to get a discount. If you are an individual with qualifications, experience, and licenses, don’t fall into these traps.

You worked hard to obtain the knowledge and experience to charge what you do. Don’t undersell yourself. Giving a discount to one customer can lead to others asking for discounts, ultimately harming your profit.

Intoxicated Customer

Another type of customer to avoid at all costs is an intoxicated one. Agreeing to a contract or performing service while your customer is intoxicated leads to legal liabilities down the road. The customer can claim they weren’t in the right state of mind and get out of their contractual obligations.

Be sure your customer is coherent before they sign a contract or avoid the customer altogether. Reducing your risk is critical as a business owner.

Underage Customer

Underage customers are another group to be on the lookout for. Minors don’t have as many rights compared to adults. As a result, entering into a contract with a minor increases your liability risk if their parents find out and want to exit the contract.

Always ask potential customers who look underage how old they are. You may need to have their guardian sign a waiver before completing any work.

Summary

Taking on the wrong customers heightens your liability risk. When you encounter any of these groups of customers, be sure you are doing your due diligence to decrease monetary and liability risk.

One way to ensure your liability risk is reduced in the event of a lawsuit is to retain the proper insurance coverage. This can be done by using our instant quote generator, where you can get an estimate on market-leading insurance in seconds! Simply enter your occupation and expected revenue to get started! The more prepared you are for these situations, the better. Contact a team member today for more information.