Chargeback. It’s the one word that sends chills down the spine of every F&I manager (or any salesperson for that matter). It can decimate a commission check, it can lead to a negative CSI, and many times it can lead to the unfair impression that staff may have not sold the product correctly.
Why do buyers cancel products after leaving the dealership? It could be that they feel it was too expensive to add to the loan or maybe they felt pressured into it by a fast-talking F&I manager. Maybe they simply did not understand how the product can help them but did not want to appear cheap by telling the F&I manager ‘No’. It’s never a clear-cut reason.
Sometimes it has little to do with the presentation and more to do with a friend or family member saying ‘Why did you buy that? You don’t NEED that…’ We all have those friends, don’t we?
How do you help your F&I staff guard against chargebacks? What are some simple strategies that can help them avoid the loss before the buyers even leave their office? It is easier than you think…
- Consider Online Product Explanations – In a marketplace driven by the buyers ability to be able to build out their car or truck entirely online before they ever step foot in the dealership, it makes sense to also offer your buyers a chance to learn more about the F&I products available to them early on. A recent study by CDK Global revealed that over 60% of consumers are more comfortable starting their process of buying online…so why not make sure they can see your F&I products?
This gives them a chance to understand how these products can help them throughout the ownership period (which now exceeds 71 months on average) and should help the F&I manage open those presentations with greater ease and less resistance. Short explainer videos or simple slides would work here.
- Constant Training – If your F&I mangers are trained in the latest ‘soft-sell’ techniques, they should have no trouble making the connections necessary to put the buyer at ease and safeguarding against any doubts that the products they choose are right for them. If you present yourself as someone who genuinely cares about educating the buyer on all the products and why they are important to consider without being pushy or sleazy, the buyer will have more trust in you. It’s about educating, not selling.
They should know all the right questions to ask either out on the floor or as soon as they come in the office…driving habits, vehicle use, ability to handle major repairs in the future, etc. Buyers should leave the F&I office feeling like they are comfortable in their purchase and that they got all the information they needed either way. No need for a cancellation because they feel confident as to WHY they bought it. Proper training is how you get there.
- Follow Up, Follow Up, Follow Up – There are those F&I vets out there who believe once the customer leaves the office, you don’t speak to them again unless there is a problem with the loan, or some other unforeseen issue related to the contract. But what if a simple follow up call could help reduce the chance that they cancel a product a week or two after the sale?
If the F&I staff makes it a regular practice to call the buyer within a 2-week window to see if everything is ok and to answer any questions about the products they purchased, how many fewer chargebacks would there be? If the buyer knows they can ask extra questions to reinforce their decision to buy, they have little reason to cancel. Your F&I managers are able to address any concerns or questions before they fester and become a reason for buyers’ remorse. It takes very little time but can have a huge impact on reducing chargebacks.
No salesperson in ANY industry wants a chargeback. It can be financially devastating and can make supervisors think you are not selling correctly or doing something unethical. But many times that is not the case and by offering transparency with product, making those valuable connections with buyers through proper training, and following up after the sale can make all the difference. Simple steps can make sure every product sticks.