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In this tutorial, Brannon from My Service Depot explains the proper method for deleting customers in Smart Service. He begins by addressing common misconceptions about deletion. To delete a customer, he demonstrates navigating to the contacts section, searching for the customer's name, opening their record, and clicking 'delete customer,' followed by confirming with "yes." After refreshing the screen with the F5 key, the customer appears removed. However, he clarifies that in Smart Service, the deletion actually hides the customer rather than completely removing them, as they remain active in QuickBooks and can be retrieved.