In an effort to improve service, Presto Cleaner installed a new computer system, designed to cut the customers’ waiting time and simplify the drop-off and pickup processes. But the system was only a few months old when Mr. J.W. Sewickley, the company president, received an angry letter from Mr. George Shelton, whose laundry had been lost by the new system. Mr. Shelton’s letter described his experience with Presto Cleaner’s complaint-handling operations and demanded compensation and an apology. To respond to the complaint, Mr. Sewickley sent the letter to his customer complaint office, asking for more information. The answer came back from Paul Hoffner. He explained that there were extenuating circumstances and suggested that some customers may not be worth keeping. Is the customer always right? Where should a company draw the line on compensation and service? What is the best way to handle cases of complaining customers? • • •

A version of this article appeared in the May–June 1990 issue of Harvard Business Review.