Sears Offered Prizes, Trips : State Also Alleges Mechanics Were Under Quota System

Sears, Roebuck & Co. rewarded its automotive repair personnel with prizes, trips and other awards for selling merchandise and services, part of an aggressive incentive program that led to alleged consumer rip-offs, Sears employees and the state Department of Consumer Affairs said Friday.

While contests are common for sales of such goods as furniture or clothing, they do not appear to be widespread in the automotive repair business. Most mechanic shops, industry experts said, pay commissions alone. Encouraging employees to sell specific parts or services may lead to consumers paying for automotive repairs that they don’t need, consumer advocates said.

“It sets up an an inherent conflict between the consumer and the employee,” said Mark Foster of San Francisco-based Consumer Action. “I don’t see how you can have that kind of pressure on a product consumers can’t judge, like car repairs.”

Current and former Sears service workers said the company regularly conducted contests that pitted Southern California stores against each other in a race to sell springs or calipers, a brake system component. Winning employees received such prizes as tickets to California Angels games, while managers of top-selling departments were flown to the Indianapolis 500.

The Consumer Affairs Department is seeking revocation of Sears’ license to perform auto repairs in California, charging that the nation’s second-largest retailer systematically charged consumers for unnecessary repairs. The state has blamed the overselling on the way Sears compensates its auto department employees.

Within the last three years, according to the state, Sears has slashed the hourly wages of its mechanics and service advisers and begun paying commissions. At the same time, the state said, Sears set strict sales quotas for each employee.

Chico Johnson, an official with the United Auto Workers, which represents Sears automotive employees at its Westminster and Canoga Park stores, said employees received a 3% commission on sales up to $110,000, and 6% commission on sales above that figure.

“Is there any wonder why people want to sell as much as they can?” he asked.

Chester Swart, a 14-year veteran of the Sears Cerritos store, said he was recently instructed to sell $147 worth of parts and service per hour. Besides that, he said, he was told to meet a sales quota for front-end alignments, shocks and brakes. He said that the employees’ sales tallies are tracked weekly, and if employees fall 80% below a store average, they are subject to dismissal.

Swart and other employees told of sales contests for springs and calipers. But within the last several months, employees were told to carefully measure a car’s “lift”--the distance of the bumper from the ground--before selling springs. The directive came after the state told Sears of its investigation. Sears confirmed that such a directive was issued.

“They told us to tone it down,” Swart said.

Sears has consistently denied that it encouraged its employees to oversell and has maintained that its method of compensation is in line with industry practice. Company officials said that what the state calls quotas are really sales goals based on conservative projections of the workload for each store.

On Friday, some employees defended Sears, which with 70 shops in California is the largest automotive repair operator in the state.

“We can tell you that we never ripped off any customer,” said David Mendoza, manager of the Sears automotive department in Santa Monica. “I’m confident that Sears takes care of the customer better than anybody--I’m 100% sure of that.”

Indeed, compensation consultants said Friday that most car dealerships and franchised repair centers pay commissions to mechanics and service advisers.

“It is prevalent in the industry and is a good business incentive,” said Harry Weisbrod, a Dallas-based consultant to the Automotive Service Assn. Weisbrod said mechanics who are paid commissions tend to work faster than those who are paid by the hour.

But, he said, “the system can get abused when you also have a quota and give away, let’s say, a trip to Hawaii for the person who does the most brake jobs.” He stressed that he had no personal knowledge of Sears’ compensation system.

The charges against Sears come at a time when overall complaints about auto repairs are on the rise. The state Bureau of Auto Repair said it will have about 10,300 fraud-related complaints for fiscal 1991. That is up from 6,190 four years ago.

The bureau, a unit of the state Department of Consumer Affairs, said the increase was because of better public awareness that the bureau exists, as well the recession, which is causing consumers to hold on to their old cars.

In other developments Friday, the first of an anticipated flurry of class-action suits was filed against Sears. The suit, filed in U.S. District Court in San Diego, alleges auto repair rip-offs as far back as 1985. Attorney Kevin McInerney, who filed the suit, declined to say why he believed that the problems have gone on for so long. A Sears spokesman said that company had not received a copy of the suit and had no comment.

Times staff writer Andrea Maier contributed to this story.