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Name : A.Ram Reddy

Designation : Lecturer
Branch : D.C.C.P.
Institute : SRRS Govt. Polytechnic, Sircilla
Year/Semester : IV Semester
Subject : Business Correspondence
Subject Code : CCP-404
Topic : Claims, Complaints and Adjustments
Duration : 50 Minutes
Sub Topic : Adjustments
Teaching Aids : PPT and Animations

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On completion of this Period, you would

be able to:

 Explain the different policies of suppliers in

making adjustments

 List the hints for drafting adjustment Letters

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 After receiving a letter of Complaints, the supplier

responds immediately
 The response Letter is called adjustment
 The fault may lie with any of the following Partner
a) Customer
b) Supplier
c) Carrier

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Different policies of suppliers in
settlement of claims

 Caveat emptor (Let Buyers Beware)

 Customer is always right

 Fair claim - Fair settlement

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Caveat Emptor (Let Buyers’

 Sellers think they are always right

 And customers are wrong
 Think it is customer’s outlook
 Goods bought at buyers’ risk
 Sellers - NO responsibility for defects

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Merits - Caveat Emptor (Buyers’

 This policy is a boon to seller/supplier

 Not entertain any claim/complaint from
 NO risk/responsibility for Seller

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Demerits - Caveat Emptor (Buyers’

 Policy is not safe to seller

 NO risk to seller. But danger to lose customer’s


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Customer is always right

 Some sellers assume that the buyers buy goods

for use not to complain
 In their eyes the buyer is always right
 The sellers make adjustments for the complaints
received from the customers
 Attending the claim whether it is reasonable or

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 The customers keep belief on the sellers

 The customers will purchase the goods from
these sellers as far as possible
 This policy is useful to customers

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 If the sellers attend all the complaints, they will get

 In the long run, it may become a potential source of
inconvenience to the lesser
 This Policy is not advisable because customers get
lenient view of supplier

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Fair Claim - Fair Settlement

 This is a good and right policy

 The sellers take each claim or complaint one to
one basis
 They do not generalize all complaints either as
right or as wrong
 They will scrutinize each claim before settlement

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Fair Claim - Fair Settlement

 Generally sellers open a complaints cell

 It collects the detailed information from reliable
sources and makes settlement
 Decision favourable to customer or seller
 This policy is scientific and business-like

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 As it is a scientific policy, it will be useful to seller

 It will also be useful to customers too

 Right Complaint will always be settled

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 There are no demerits in this policy

 But no delay in detailed investigation
 It should be done without bias
 Otherwise, the firm will lose its reputation

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Contents - An Adjustment Letter

 Acknowledgement of the letter of complaint or claim

 Expression of regret for the inconvenience caused if
the complaint is genuine
 The facts of verification of the complaint
 The method of settlement if any should be given

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 Assurance not to occur in future the same
inconvenience if the claim is genuine
 If no inconvenience is caused this point need not
be mentioned

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Ex.1 (Fair Complaint, Fair adjustment)
Reply to a Complaint of Defective goods:

Hackwell & Company

Temple street,
Dt. 28.02.2008.
M/s.Brown &co.,
Dear Sirs,
We have just received your Letter but regret to learn that
the clips of some pens are loose fitted
It is our practice to check the goods before dispatch, but
owing to oversight of the dispatch section ,some defects might
have occurred
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Ex.1 contd

However ,please return goods for replacement soon. The

expenditure for this can be adjusted in settling claims
We may be excused for the inconvenience caused to
you. We promise that this will not happen in future.

Yours faithfully,
for Hackwell & Company.

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Contents Of An Adjustment Letter
 Sometimes when the adjustment does not involve
huge amounts Settlement should be made when
mistake was not caused at the sellers end
 Then it should be informed that the settlement is
being made as a special case
 And should not be treated as precedence

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So far we have discussed about:

 Different types of adjustments

 Different policies of suppliers in settlement and their
merits and demerits
 Hints for drafting adjustment letters

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1. Caveat emptor means

a) Purchaser will not entertain any claim

b) Purchaser will entertain all the claims
c) It means that the purchaser is always right
d)The seller is always wrong

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2. Fair claim fair settlement means

(a) Settlement of loss without enquiry

(b) Adjusting loss after enquiry
(c) Adjustment letter rejecting the claim without giving
any reasons
(d) None of the above

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Frequently Asked Questions

1. M/s. Prabhakar and Company, Warangal

received the goods in damaged condition from
M/s.Ashok and Company, Jaipur. M/s.Prabhakar
and Company asking for compensation. Write
an adjustment letter by informing that how the
claim is settled.

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