Leslie Firlie Leslie Firlie Chief Marketing Officer and Director, Consulting - Trestle Group

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Short end of the Stick

  • Will 2012 be the year to stick it to consumers for adopting technology?  I was under the impression that consumers were being encouraged to go paperless (for the eco-friendly) and to do more online transactions to save costs and time.  The trend that I am seeing in the last 3 months tells me that businesses are now seeing this as a way to shift costs to its customers instead of using things like online payment, mobile payment and other services to offer more innovative services and encourage more real spend.

     

    Verizon Wireless just announced that starting 15 January it is charging customers a $2 “convenience fee” to pay bills online or via mobile.  Convenience fee?  Is this the kind of innovative thinking we were hoping to see from Service Providers in 2012?  Last year, Verizon Communications tried this tactic with its TV and Internet customers but the backlash from consumers caused them to back off.  Apparently the Wireless division seems to think consumers aren’t paying attention this time around.  This isn’t far afield from the recent outrage when Bank of America tried to charge customers a fee to use their debit cards for payment – another example of wireless payment getting “taxed” by providers. 

     

    Yesterday I was unpleasantly confronted with the growing mindset of “pass the buck to the consumer” when buying airline tickets with Swiss.  I’m a frequent flyer with Swiss so I don’t expect to find out they’ve made a major change to online ticket purchase policies at the end of a transaction.  Naturally there is information on the website (if you can find it) but I didn’t receive any proactive communication back in November when they decided to launch this bright idea.  I’m fully behind the full e-travel concept – buy my ticket online, load my boarding passes to my mobile phone, and pay with my credit card online – making the entire process paperless from start to finish.    I even get my itinerary on TripIt so I don’t have to print any other reservation information either. 



    And then we come to yesterday, I’m ready to purchase my airline ticket and I see a new line item at the bottom of the page called “Optional Payment Charge”. I have to give them credit for creativity.  Optional implies its something I don’t have to have but guess what, I was paying with a credit card so there was no option but to accept the new fee of 11 CHF to pay with my credit card.  I didn’t have any other choices because one requires a postal account, which I don’t have, and some other AirPlus debit service that is geared toward businesses.  Mind you, I didn’t have time to research all of this in the moment.  I’ve actually wasted some of my morning reviewing the Swiss site and the alternate options, which I’m sure have fees of their own to setup.

    I can’t resist putting in the actual info from the Swiss site:

    SWISS incurs costs with every payment for its services. In the case of payments made by credit card, these costs appear as a fee charged by the credit card companies on all amounts (disagio). The introduction of the Optional Payment Charge (OPC) includes the credit card user in the related costs. With this restructuring, SWISS is keeping abreast of a general trend in the airline industry.

    The Optional Payment Charge (OPC) shall apply to all tickets issued as of 2 November 2011 for travel commencing in Switzerland. The amount charged for tickets for travel commencing in Switzerland will vary according to the region within which the destination lies:

    • CHF 6 per ticket for flights within Switzerland
    • CHF 11 per ticket for flights within Europe
    • CHF 22 per ticket for flights beyond Europe

    At least they are honest, they’ve figured out after how many years that they can just pass the transaction fees they have paid to the credit card companies to the consumer.  And these are some lofty fees, which are not refundable if you cancel the flight.  In fact, I laugh at the first one because anyone who lives in Switzerland is highly unlikely to fly within Switzerland – we’ll just take the train and hope the SBB doesn’t get the same idea with their online and mobile payment process.

    Anyone else have some interesting stories where companies are sticking it to customers with these “no value add” fees instead of finding innovative ways to increase their profits?

    Leslie Firlie
    About Leslie Firlie Leslie Firlie works as Chief Marketing Officer and Director, Consulting at Trestle Group
    More information : www.trestlegroup.com

Comments

2 comments
  • Knut H Flottorp
    Knut H Flottorp Your company is using the wrong banking interface, and has serious misunderstanding of how micropayment is to be configured. They pay for this - stupidity and ignorance is costly.
    21 February 2012
  • Leslie Firlie
    Leslie Firlie Hello Knut, thank you for taking the time to read my blog. However, I am writing this from a consumer perspective, not from a corporate perspective. The Lufthansa Group implemented new fees (from 11-22 Swiss Francs per ticket) when you purchase an airli...  more
    23 February 2012