Sales Ethics and Compliance Flashcards

What is the role of a sales manager in creating an ethical sales culture?

Answer: Modeling ethical behavior, enforcing the code of conduct, and recognizing ethically earned wins

Sales managers set the tone for the team; consistent modeling and enforcement of ethical standards creates a sustainable culture of integrity.

A customer asks a sales professional for a comparison of competitors' pricing. The ethical response is to:

Answer: Provide accurate information if available, or acknowledge the limits of your knowledge

Ethical salespeople provide accurate comparative information or acknowledge uncertainty rather than misleading customers.

What is 'churning' in sales ethics?

Answer: Repeatedly replacing a customer's product or contract to generate commissions without genuine benefit to the customer

Churning prioritizes the salesperson's commission over the customer's best interest and is considered unethical and potentially fraudulent.

Which of the following best describes 'suitability' in ethical selling?

Answer: Recommending products or services that genuinely match the customer's needs, financial situation, and goals

Suitability requires that recommendations serve the customer's interests, not just the salesperson's, and is a cornerstone of ethical practice.

Why is documenting customer agreements and conversations important from a compliance perspective?

Answer: To create a verifiable record that protects both parties in case of disputes

Documentation provides an auditable trail that confirms what was agreed to, protecting both the customer and the company from misunderstandings or legal disputes.

What is 'price gouging' and how does it relate to sales ethics?

Answer: Charging excessively high prices by exploiting an emergency, shortage, or customer vulnerability, which is both unethical and often illegal

Price gouging exploits vulnerable situations for profit and violates both ethical standards and consumer protection laws in many U.S. states.