Have you ever discovered an unjustified charge on a bill, then spent a confusing and frustrating hour on the phone with customer service trying to resolve it?
Welcome to the “gotcha” economy.
Some companies operate in the gray area that exists between what is legal and what is right. Their whole business model is to trap customers, taking advantage of a moment of inattention. Call it the bottom-dwelling business model. Read this article about Intelius for a great example.
Most customers don’t mind paying a fair price for a fair product. More than ever before, however, today’s consumers feel beaten down and powerless, victimized by an unending stream of “gotcha” tricks. While some companies exist only through such practices, many others have them in their bag of tricks. They include:
- Credit card interest rates that change based on hidden factors
- Extra airline fees for bags, ticketing, “convenience”, others
- “Free” online services that bill after the first month
- Poorly defined and named cell phone charges
Modern consumer living means maintaining dozens of financial and business relationships – with banks, credit cards, cable companies, and other merchants. No one has time to read the fine print, and companies know this. They make their pricing and policies as opaque as possible to try to maximize profit.
If your business does this, stop. I won’t waste energy going into the long-term argument against deceitful practices (alienated customers, complaints, customer service costs, etc.). If you have any standard of ethics, your business should be about doing what’s right, not what you can get away with.
Don’t do this. By not turning your customer into a victim, you can gain their loyalty.
Arlington Mill Group-
Nice post. Don’t forget to mention:
1) Automatic monthly renewal charges for one-time services ordered via credit card, yet you’re assessed a new charge each month in perpetuity due to hidden clauses.
2) Worthless extended warranties that consumers are pressured into purchasing at the point of sale, yet hardly ever use.
3) Low list retail price for merchandise, redeemable only if a cumbersome 12-step rebate process is followed.
I could go on! Keep up the great posts!
Best,
Porsche
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You mentioned the airlines, but they’re worth mentioning again: what other industry makes a business out of jacking hidden fees, reducing service and generally making customers miserable? People are starting to drive or even avoid trips just to stay away from airline hell.
And another good one: the cable companies, who have under-delivered and overcharged for cable for years and are now trying to do the same with broadband.
Beware when renting cars! I have twice now rented an Avis car in a city with a ‘fast pass’ system. The rental car had a built-in transponder so you didn’t have to wait in line to pay tolls. Thing is, if you used it even one time, you were then assessed a usage fee for each day of the car rental, even if you didn’t use it on any other day but the one. No where was this explained to me and when I challenged it with my credit card company [because this fee was charged to some third party I never heard of, not Avis, and showed up well after I had returned the car] I was told it was in the rental agreement [that 6 page document in 2 point font] and I had agreed to this. Ended up costing me WAY more than just paying local tolls and I did not want this ’service’ because there wasn’t any line at the toll booth the one time I went through it. I blame Avis for this situation although they are not the ones collecting the $$. Hertz probably does it, too.