AARC Business Operations & Ethical Standards 2 — Questions and Answers
Question 1: Under ARA's Code of Ethics, how must an AARC-certified recycler handle a customer complaint about a defective part?
- Ignore it if the return window has passed
- Resolve it promptly and fairly in good faith (Correct answer)
- Offer a discount on the next purchase only
- Refer the customer to the vehicle manufacturer
Correct answer: Resolve it promptly and fairly in good faith
ARA's Code of Ethics requires AARC members to resolve customer disputes promptly and in good faith as a fundamental ethical obligation.
Question 2: Which document must an automotive recycler provide to a customer purchasing a used engine to clearly outline warranty terms?
- Bill of lading
- Parts warranty disclosure statement (Correct answer)
- Certificate of title
- EPA compliance letter
Correct answer: Parts warranty disclosure statement
A parts warranty disclosure statement communicates the specific warranty terms, exclusions, and remedies available to the customer at the point of sale.
Question 3: An AARC recycler discovers that a competitor is selling stolen catalytic converters. The ethical obligation is to:
- Report it to local law enforcement or the appropriate authority (Correct answer)
- Undercut the competitor's prices to win business
- Stay silent to avoid industry conflict
- Purchase the converters at a discount before reporting
Correct answer: Report it to local law enforcement or the appropriate authority
Ethical standards require recyclers to report suspected criminal activity involving stolen auto parts to law enforcement rather than ignore or exploit it.
Question 4: What is the primary purpose of maintaining accurate inventory records in an automotive recycling business?
- To comply with state vehicle title laws only
- To support sales efficiency, regulatory compliance, and theft prevention (Correct answer)
- To satisfy insurance underwriters exclusively
- To track employee performance metrics
Correct answer: To support sales efficiency, regulatory compliance, and theft prevention
Accurate inventory records serve multiple purposes including facilitating sales, meeting regulatory requirements, and deterring or detecting theft.
Question 5: Which practice best demonstrates transparent pricing in an automotive recycling operation?
- Quoting different prices to different customers for the same part without disclosed criteria
- Publishing a consistent price list and applying it uniformly (Correct answer)
- Charging more during peak demand without notifying customers
- Bundling hidden fees into the final invoice
Correct answer: Publishing a consistent price list and applying it uniformly
Publishing and uniformly applying a consistent price list ensures customers are treated fairly and pricing practices are transparent.
Question 6: When an AARC recycler sells a part 'as-is,' what obligation remains regarding the part's description?
- No obligation exists once 'as-is' is stated
- The recycler must still accurately describe the part's known condition and defects (Correct answer)
- The recycler may omit known defects to speed the sale
- The warranty replaces the need for accurate description
Correct answer: The recycler must still accurately describe the part's known condition and defects
Even in an 'as-is' sale, the recycler is ethically and legally obligated to disclose known defects so the buyer can make an informed decision.
Question 7: An automotive recycler's employee offers to sell a customer parts at a personally discounted 'side deal' bypassing the register. This is best described as:
- A normal customer loyalty practice
- Fraud or theft against the employer and a violation of business ethics (Correct answer)
- An acceptable informal transaction if both parties agree
- Standard industry practice for repeat customers
Correct answer: Fraud or theft against the employer and a violation of business ethics
Selling parts outside the business system constitutes theft from the employer and violates business ethics regardless of mutual agreement between employee and customer.
AARC Business Operations & Ethical Standards 2
Under ARA's Code of Ethics, how must an AARC-certified recycler handle a customer complaint about a defective part?