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Deception and Withholding Information in Sales

Published online by Cambridge University Press:  23 January 2015

Thomas Carson
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Abstract:

The ethics of sales is an important, but neglected, topic in business ethics. I offer criticisms of what others have said about the moral duties of salespeople and formulate what I take to be a more plausible theory. My theory avoids the objections I raise against others and yields plausible results when applied to cases. I also defend my theory by appeal to the golden rule and offer a justification for the version of the golden rule to which I appeal. I argue that salespeople have prima facie duties to do the following: 1. warn customers of potential hazards, 2. refrain from lying and deception, 3. fully and honestly answer questions about what they are selling, and 4. refrain from steering customers toward purchases they have reason to think will harm the customers. The paper concludes with a brief appendix that discusses the implications of the ethics of sales for the social responsibilities of business.

Type
Articles
Information
Business Ethics Quarterly , Volume 11 , Issue 2 , April 2001 , pp. 275 - 306
Copyright
Copyright © Society for Business Ethics 2001

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References

Notes

Earlier versions of this paper were presented to the Fifth Annual International Conference Promoting Business Ethics, De Paul University, October 1998 and the Society for Business Ethics, August 1999. I am indebted to Jason Beyer, Ian Maitland, Ivan Preston, Mark Schneider, Patrick Stone, Alan Strudler, Amy Veenker, and an anonymous referee for the Society for Business Ethics for helpful comments and discussions of this topic.

1 David Holley, “A Moral Evaluation of Sales Practices,” Business and Professional Ethics Journal 5 (1986): 3–21; “Information Disclosure in Sales,” Journal of Business Ethics 17 (1998): 631–641. (My references to “A Moral Evaluation of Sales Practices” are to the version reprinted in Ethical Theory and Business, fourth edition, ed. Tom Beauchamp and Norman Bowie (Englewood Cliffs, N.J: Prentice Hall, 1993), pp. 462–472.

2 Ebejer and Morden’s paper was originally published in Journal of Business Ethics 7 (1988): 337–339. My references to this paper are to the version in Ethical Theory and Business, pp. 472–474.

3 Oxford English Dictionary, second edition (Oxford: The Clarendon Press, 1989).

4 I think we need to add another condition to this definition of lying: in order for a false statement to be a lie the person who makes it must know or believe that it is false. (See my papers, “On the Definition of Lying: A Reply to Jones and Revisions,” Journal of Business Ethics 7 (1988): 509–514 and “Second Thoughts on Bluffing,” Business Ethics Quarterly 3 (1993): 317–341.) This condition makes a difference in cases in which someone attempts to deceive another person by means of a false statement that he mistakenly believes to be true. This issue needn’t concern us further. Nothing I say in this paper turns on (controversial) assumptions about the definition of lying.

5 I myself have serious doubts about the view that the intent to deceive is a necessary condition of lying. See “On the Definition of Lying” and “Second Thoughts on Bluffing.”

6 P. S. Atiyah, The Rise and Fall of Freedom of Contract (Oxford: The Clarendon Press, 1979), pp. 464–465.

7 Ivan Preston, The Great American Blow-Up: Puffery in Advertising and Selling (Madison: University of Wisconsin Press, 1975), p. 52.

8 Preston, The Great American Blow-Up, pp. 56–57.

9 Preston, The Great American Blow-Up, pp. 59–60

10 This is an actual case that I present at greater length in my paper “Ethical Issues in Sales: Two Case Studies,” Journal of Business Ethics 17 (1998): 725–728.

11 On the importance of gaining the customer’s trust for success in sales see Guy Oakes, “The Sales Process and the Paradoxes of Trust,” Journal of Business Ethics 9 (1990): 671–679 and Oakes’s book The Soul of the Salesman (Atlantic Highlands, N. J.: Humanities Press, 1990).

12 This case comes from Holley, “A Moral Evaluation of Sales Practices,” in Ethical Theory and Business, p. 465.

13 An intoxicated driver might conceivably benefit others. Suppose that I am driving late at night and frightened by a drunken driver driving erratically in the oncoming lane. As a result of this, I stop driving and check into a motel. It is possible that I would have fallen asleep and been killed otherwise.

14 W. D. Ross, The Right and the Good (Oxford: Oxford University Press, 1930), Chapter 2; The Foundations of Ethics (Oxford: Oxford University Press, 1939), pp. 83–86.

15 Ross holds that lying is prima facie wrong, but he does not say that deception per se is prima facie wrong. See Ross, The Right and the Good, Chapter 2.

16 Holley uses the terms “voluntary exchange” and “mutually beneficial exchange” interchangeably; see note 4 of his paper.

Holley assumes that voluntary exchanges are mutually beneficial provided that they meet these conditions.

17 Holley uses the expression “only if instead of “if and only if.” This means that he is claiming that the three conditions are necessary conditions for an acceptable exchange. He never states sufficient conditions for an acceptable exchange. As stated, Holley’s theory is not fully action-guiding; it tells salespeople that there are certain things that they should not do. But it does not give sufficient conditions for right actions; he does not propose a list of conditions such that satisfying them guarantees that what a salesperson does is right. For my purposes, nothing crucial depends on this. My criticisms of Holley assume only that these are necessary conditions for an acceptable exchange.

18 Holley, “A Moral Evaluation of Sales Practices,” p. 463.

19 Ibid., p. 464.

20 Ibid.

21 Ibid.

22 Ibid.

23 Ibid., p. 467.

24 It won’t do to say that they should know this information. Surely this is not always the case. A salesperson in a large store cannot be expected to be knowledgeable about every product he sells. Salespeople in retail stores are rarely given sufficient training to familiarize themselves with all of the goods they sell. Often, it is impossible for realtors and used car salesman to know much about the condition of houses or cars they sell or the likelihood that they will need expensive repairs.

25 Journal of Business Ethics 17 (1998): 631–641.

26 ”Information Disclosure in Sales,” pp. 632–633.

27 ”Limited Paternalism in the Marketplace: Should a Salesman be His Buyer’s Keeper?” in Ethical Theory and Business, p. 472.

28 Ibid., p. 473

29 Ibid.

30 Ibid., p. 474.

31 Ibid., p. 474. I use this kind of example as an objection to Holley’s theory. See section V, #2. But Ebejer and Morden don’t present this case as an objection to Holley’s theory; their paper doesn’t include any references to Holley.

32 Ebejer and Morden, p. 474.

33 Cases involving children or adults who are not fully rational raise special problems that I will not try to deal with here. There are also questions about whether salespeople can always identify irrational adult consumers.

34 This needs more elaboration and qualification than I can provide here, but I trust that the following examples are noncontroversi al. A person who sells firearms or tobacco in a store would not be obligated to warn customers about health and safety risks involved in owning firearms or using tobacco—almost everyone understands those risks. By contrast, a car salesperson who sells someone a car with anti-lock brakes would be obligated to caution the buyer that anti-lock brakes work differently from conventional auto brakes. (Drivers shouldn’t “pump” antilock brakes in an emergency. Pumping antilock brakes can lengthen the distance required to stop and can cause accidents.)

35 Similarly, salespeople should be candid about their own areas of ignorance. They should not answer or pretend to answer questions that require knowledge they lack. If, for whatever reasons, a salesperson cannot or will not give a complete answer to a question, she should make this clear and not pretend that she has fully answered the question.

36 Almost all of the world’s major religions endorse the golden rule (or some version of the golden rule) as a moral principle. The principle entered into the Judeo-Christian tradition from ancient Mesopotamia. The Mesopotamian tradition includes the following injunction: “Son, that which seems evil to thee, do not to thy companion.” Rabbi Hillel said, “That which is hateful to you, do not do to your neighbor: that is the whole of the Torah, when the rest is commentary thereon; go and learn it.” Confucius said, “Do not impose on others what you do not desire others to impose on you.” The following statement is attributed to Mohammed: “That which you want for yourself seek for mankind.” Other major religions such as Hinduism and Zoroastrianism also endorse the golden rule. For references and additional background on the history of the golden rule see Jeffrey Wattles, The Golden Rule (Oxford: Oxford University Press, 1996).

37 For excellent discussions of the long history of the golden rule in many different religious traditions see J. O. Hertzler, “On Golden Rules,” International Journal of Ethics 44 (1934): 418–436, and Wattles, The Golden Rule.

38 0n this, see Guy Oakes, The Soul of the Salesman, p. 86.

39 George Bernard Shaw, Man and Superman (New York: Wm. Wise and Company, 1903), quoted in Wattles, The Golden Rule, p. 175.

40 See Harry Gensler, Formal Ethics (London: Routledge, 1996), pp. 118–120; Marcus Singer, “The Golden Rule,” Philosophy 38 (1963): 293–314; and Wattles, The Golden Rule, pp. 175–176.

41 Many others have noted the unacceptable consequences of universal lying and deception. (Kant makes much of this point.)

In order to function properly, the economic system requires high levels of trust and honesty. The law alone can’t ensure that there will be high levels of trust and honesty. This requires that most people voluntarily adhere to norms of honesty on moral grounds. Consumer protection laws could not function effectively if all businesses practiced deception. The legal system doesn’t have the means to prosecute all business people. The economy depends on voluntary compliance on moral grounds. If people were honest only because they feared getting caught the economy would soon cease to function. Richard De George writes the following:

If everyone in business—buyers, sellers, producers, management, workers and consumers—acted immorally or even amorally (i.e., without concern for whether their actions were moral or immoral), business would soon grind to a halt. Morality is the oil as well as the glue of society and business. It is only against the background of morality that immorality can not only be profitable but even possible. Lying would not succeed if most people were not truthful and did not tend to believe others. A breach of trust requires a background of trust. (Business Ethics, first edition [New York: MacMillan, 1982], p. 6)

42 The motives of salespeople are not always transparent to their customers. But a universal indifference to 1–4 among salespeople (or a salespeople of some specific sort, e.g., car salespeople) would almost certainly diminish the trust that the public has in them.

43 I have argued that a salesperson who makes it a policy to do whatever will advance his own financial interests (including violate 1–4) cannot will that all other salespeople follow that same policy. In light of the foregoing considerations, we cannot make the stronger argument that Kant makes about making promises in bad faith (making a promise you don’t intend to keep). We cannot claim that the maxim of acts that violate 1–4 cannot be a universal law of nature. It is possible (though extremely unlikely) that all salespeople (or all shoe salespeople, etc.) profit by routinely violating 1–4.

44 Gensler formulates a very similar version of the golden rule. See his Formal Ethics, p. 130.

45 This argument follows Harry Gensler’s defense of the golden rule in his paper, “A Kantian Argument Against Abortion,” Philosophical Studies 49 (1986): 89–90. Gensler states the argument as follows:

If you are consistent and think that it would be all right for someone to do A to X, then you will think that it would be all right for someone to do A to you in similar circumstances.

If you are consistent and think that it would all right for someone to do A to you in similar circumstances, then you will consent to the idea of someone doing A to you in similar circumstances.

Therefore,

If you are consistent and think that it would be all right to do A to X, then you will consent to the idea of someone doing A to you in similar circumstances.

Gensler’s books (Formal Ethics [London: Routledge, 1996], pp. 93–95; Ethics [London: Routledge, 1998], pp. 104–106) present similar versions of this argument. My defense of the two premises is substantially different from Gensler’s.

46 Gensler, Formal Ethics, pp. 63–64.