Small Dog Electronics eaks out on theft-in-tra it, credit card fraud and more

The other day we told you about the guy who had his (then) newly purchased iPod swa ed out for a bar or soap while in tra it from Small Dog, a Vermont A le Reseller. I was amazed at how many people mentioned that similar - and worse - things had ha ened to them so I decided to ask the reseller at the heart of this particular story just how much of a scourge this really is. Don Mayer, CEO of Small Dog Electronics, had a lot to say on the matter.

Q. Has Small Dog had this ha en before or since?
A. There is a growing trend of theft through delivery services. We receive hundreds of packages each day and send out hundreds, too. It used to be that we could trust shrink wra ed pallets of goods from the manufacturer, however, lately, we have had reams of paper su tituted for computers, batteries and old socks seem to be the choice for iPods. We've had bricks sent to us and old books and magazines, too. In just about every case the thefts a ear to be ha ening at one of the shi ing facilities. Sometimes the pallets are broken down and re-stacked with the tampered boxes on the bottom of the pallet.

[More after the jump...]
Q. Is the shi er generally cooperative when it ha e ?
A. In just about all of these cases we are succe ful in working with the shi ing company and/or the vendor to resolve the situation. The most frustrating part of the proce is the time that it takes to resolve the i ues.

< an style="font-weight: bold;">Q. Is the vendor reimbursed when a product goes MIA in tra it?
< an style="font-weight: bold;">A. Since we primarily ship with U , they tend to take good care of us and act quickly for our customers, too.

< an style="font-weight: bold;"> Q. Are there any new precautio being taken to i ure iPods and other high-value items arrive at their destination safely and un-tampered with, such as double-boxing or using security tape to indicate whether the package has been opened in tra it?
< an style="font-weight: bold;"> A. We do try to double box products that have obvious value but the more that Small Dog Electronics becomes known for selling A le products the harder it will be to hide the contents. One of the things we do to help eliminate the o ortunity for theft is to ship all of our packages U 3-day service (or faster) on the theory that the shorter the time the product is out of our hands (or the customers) the le chance of tampering.

We at TUAW don't want single out U , of course, as the lone culprit when it comes to the old switcheroo. FedEx, DHL, Airborne, U and other carriers all face the same problems and with the volume of packages sent and received every single day it's really astonishing that the whole shi ing and delivery system works as well as it does most of the time. E ecially co idering how many hands touch each package between Point A and Point B - many of those hands belonging to outside contractors and temporary workers. For every package you hear about that doe 't make it to its destination trouble-free, however, think of the countle packages that < an style="font-style: italic;">do make it without fail. As with most things, what you primarily hear about and read about are the problems and failures, not the succe es.

An even more alarming trend, Mayer says, is increased sophistication in credit card fraud. "The thieves are now stealing identities by calling the credit card i uers who have weak security and asking for an addre change. Thus when we verify addre it comes back clean but is not the real card holder. And of course, it is the merchant that holds the bag. We are involved in a few di utes with credit card i uers where they have charged back legitimate sales where < an style="font-style: italic;">their security was lax and identity theft was made easy by their proce es."

Mayer continued, "Our company is built upon the notion of making customers for life. Hapy [< an style="font-style: italic;">N.B. Hapy Mayer is Don's son and CFO and co-owner of Small Dog] and I train and empower our employees to treat our customers as if they were their mothers. The profit from the sale of a single product is i ignificant when compared to the life-value of a satisfied customer."

And it looks like that attitude has paid off since Don and Hapy were named one of America's Best Bo es by < an style="font-style: italic;">Fortune Small Busine magazine in 2004, as well as honored as one of Vermont's fastest growing busine es by < an style="font-style: italic;">Vermont Busine magazine's 5x5x5 Award.

In fact, you can witne their growth in person if you're in the Burlington, VT area this weekend when they open their new retail store at 100 Dorset Street in South Burlington. Grand Opening week kicks off at 10:00 am today and continues with uniquely-themed days throughout the week. Check out the event schedule for details. If you ha en to buy something while you're there, though, do yourself a favor and open the box before you leave the store, just in case...