Why Do People Cry About Every Single Fee & Price Hike?

Photo credit: © scribblefx

Everywhere you turn you are most likely hearing and reading about people complaining about how unfair it is that they are having to pay fees for bank services, or the products they buy costing costing more, or when they’re backed up and can’t seem to go to the bathroom (well the last one hasn’t happened…yet. You can probably find something on twitter though). It seems like people have some sort of sense of entitlement these days. Like they should be able to get everything they want all while the companies providing those products and services foot the bill. I’m beginning to think that some people just like to make big deals over nothing or like the attention it brings when they get the recognition for raising the stink (and of course since most people are followers looking for a cause, they just hop on the bandwagon blindly).

 

My buddy SB, who writes at One Cent At A time recently wrote an article about customers using their powers to get what they want. I myself have said that customers are the lifeblood of a successful business, even giving business owners alternatives to throwing out annoying customers. The problem I have is that it’s not that customers shouldn’t voice their opinions when they are dissatisfied, but the fact that they are using their collective voice for the wrong purposes.

 

Everything we consume has a cost associated with it. Look at the company you work for, or if you run a business, the products or services that bring in your income. If those businesses never raised the sales prices while facing increased costs to provide those items then profits would shrink. If those profits shrink, there may not be a version of a budget where you can be retained as an employee. In the case of you business owners, you may not have enough profits to pay yourselves anything substantial enough to justify keeping the business going and may have to return to the workforce as an employee. But, the companies who you would apply to wouldn’t have any jobs because they can’t afford to hire more people due to the fact that their profits have been cut by eating the increases in costs.

 

Photo credit: © cultxpt

Is this what protests and pickets are going to be diluted to?

 

People want everything for free, or at bargain-basement pricing, but they are not willing to take the downside that comes along with such pricing structures. They want exemplary customer service and modern amenities/utilities at the same time, but they cannot have their cake and eat it too. Do you want a bank that is going to give you bill pay, many years of statement and check storage online, the ability to transfer funds between account and even across customer accounts, convenient locations and is open at times when you need although they charge a fee for some services? Or do you want a bank that offers only basic services, is difficult to get to , isn’t open at times when you would need it, yet doesn’t charge fees? Do you want a service provider like a cable/satellite company that provides you with the cutting edge technology and speed that you require to watch and record multiple show simultaneously or one that doesn’t even provide HD or DVR capabilities? Do you want a cell phone plan that allows you to access your email, banking/brokerage accounts, and provide a network that can accommodate your talking and data needs, or would you rather opt for a low-cost, stripped down option but give up the quality in the service, if they even provide the same options?

 

Have you ever had a problem with Twitter, Facebook, Gmail, Yahoo, etc and complained to anyone who will listen? Well I’ll tell you something: you have no right to complain. You are using a service that is being provided to you free of charge, and you are not giving anything in exchange for those services so how can you claim to be deserving of assistance and support also? And, holy crap, cover the children’s ears should any free service provider ever even think about charging for support. Who do they think they are charging to answer a question about the product they are providing to you. Never mind the fact that it’s not costing you a dime to use the service, they should give you everything for free!

 

It’s all about trade-offs. You cannot logically expect a business to give you everything you want while not expecting to be compensated for those services or products. You have to make the choice: do you want all of the extras you think you are “entitled” to receive or do you want to save money and opt for a cheaper version? You can’t always have both.

 

If you want to complain and protest against something, how about choosing something that will benefit society in a real way, like fighting fort that millions of children go hungry here in the United States each day. Or how about the rising costs of education at all levels to the degree that schools can’t even provide updated textbooks or supplies to the students. Maybe the issue of childhood obesity and making parents accountable and educating them isn’t worthy enough. And how about supporting teachers and public service personnel (police and firefighters) who see their jobs and salaries cut because cities make stupid decisions to commission art pieces on taxpayers’ dimes or build statues at the taxpayers’ expense rather than pay the people who really make a difference in their communities. Why not quit worrying about the cost of your streaming entertainment or your cell phone data plan or the lousy fee to use your debit card for a change and turn your attention to the causes that actually can make a difference to those who truly need it!

About Eric J. Nisall

Former NY'er, accountant & business consultant, founder of GreenBridge Advisors. Blogging about personal financial, small business topics, and other fun topics at DollarVersity. Fan of the NHL and everything hockey! Follow me on Twitter, Facebook, and on Google+

  • http://twitter.com/prairieecothrif Miss T

    Well said. I agree with you. There is so much energy and emotion wasted on things that don’t really matter. We need to as, a collective society, start using our energies for the greater good- fighting hunger, living greener, and eliminating homelessness. Call me a socialist but I think this is the way it should be.

    • http://www.dollarversity.com Eric J. Nisall – DollarVersity

      Unfortunately, most people are so narrow-sighted, that they don’t even realize how insignificant such trivial issues are compared to what so many others are going through or helping another person.  

      • Sunshine25

        If you want to be an example, you can fight the causes you deem important. Maybe others will join you. 

  • Sunshine25


    People want everything for free, or at bargain-basement pricing, but they > are not willing to take the downside that comes along with such pricing structures. 

    Look, banks make money off merchants by charging an interchange fee. Granted, big banks ($10+ billion in assets) are having to re-adjust their profit loss from debit cards. Last I checked, I earned Bank of America at least $8,000 in fees ($160k in purchases in 2011). They want to still charge me $16 for small business checking? That’s just greed.

    We are earning the banks profit by using our debit cards. If you look at PerkStreet, they profit share with customers by offering a debit rewards card.

    There is no downside for wanting free checking. The downside is that big banks feel an entitlement to profits that they don’t actually have to work for. Everyone else has to work for their money — big banks can do the same.

    p.s. spell check your blog post

    > they are using thoer collective voice –> “their”

    • http://www.dollarversity.com Eric J. Nisall – DollarVersity

      There is a downside to wanting free checking if you also want the bank to provide you with a technologically advanced feature-set where you can accomplish a wide array of tasks like I mentioned in the post.  Infrastructure, equipment, coding, power—it all costs money to implement, run and support.  If the banking division didn’t charge fees for services in order to cover these costs, then where would the money come from?  If they started taking away services in order to give you a free banking alternative would you congratulate them or instead complain about the loss of services?

      Besides, what the bank earns from merchant services is different than what is earned from the consumer banking, commercial banking, investing, and lending divisions.  Everything is its own entity when it comes to fee structures and costs.

      You mentioned the purchases of $160k.  Is that what you collected from customers?  If yes, I’m sure you made your margins as high as you could get away with.  Do you give away any of your products/services for free?  I doubt it as you wouldn’t be able to survive as a going concern if you didn’t make a profit off of what your business provides.

      None of this is really the point.  I have zero qualms with people wanting to save money on the products and services they use, the same way as I don’t fault businesses making a profit.  It’s the fact that the people want to take but not make any concessions to the “evil” businesses.  It’s the hysteria they create over such little things when there are worse things going on, especially here in the US.  It’s the fact that everyone victim of corporate greed, not to their own wants and desire.

      • Sunshine25

        > Do you give away any of your products/services for free?

        Yes, I give away some products and services for free. It is the cost of doing businesses and to maintain a good relationships with the customer. This is something the banks have forgotten which explains your point about “corporate greed”.

        I am a customer, not the bank’s segment of banking, credit card, brokerage, mortgage, insurance, etc. 

        I also expect to make money overall as a business, but do not expect every transaction will be profitable.

        > Infrastructure, equipment, coding, power—it all costs money to implement, run and support.

        If by infrastructure you mean brick & mortar locations… yes, that costs a lot of money. If they cost a lot, perhaps they should close them. I can manage without one. Coding and running web servers per customer don’t cost anything. You write once and you use infinitely.

  • http://marriedwithdebt.com/ John @ MarriedWithDebt

    I commented on the post you referenced by talking about a specific fee that AT&T tried to charge me. I activated a new phone, triggering a 2 year contract agreement, AND they wanted me to pay an $18 “upgrade fee,” which is essentially a fee that I pay for the privilege of being their customer.

    To me it’s not about nickel and diming, it’s about respect. 

    I’ve spent almost $8,000 with this company, and they have the nerve to blatantly disrespect me. I would have rather they work the fee into the price of the handset or rate plan, or find some other, less obvious way of collecting the revenue. Long story short, I did not have to complain – I simply called and ask it be waived, and they did.

    Some people who do complain are advancing a bigger agenda of respect. Our culture seems to thrive on disrespect, bullying, making fun of special needs people on American Idol, etc – we need to get back to the Golden Rule of treating each other the way we want to be treated.

    Because no one stands up for themselves, the bullying continues and grows. Fifty years ago we had asbestos everywhere and flammable pajamas. People complained, and it went away.

    I agree with you that people could be spending their energy elsewhere, and I’m sure many of them are.

    Very provocative post. 

    • http://www.dollarversity.com Eric J. Nisall – DollarVersity

      I have no clue what you meant by the Idol remark, John.  I absolutely avoid the show and pretty much all celebrity or pseudo-celebrity stuff as best I could!

      What you are talking about is normal.  You called, you asked, you received.  I agree that that paying a fee each time you upgrade is ridiculous since the account is already set up and just by transferring your SIM card the new phone is on—they do nothing.  I was thinking more along the lines of a $.20 increase to the regulatory fee that the company recoups from the customer.  Or when people bitch about the increase in the data plans even though they are giving unlimited data.  Stuff that people as a whole seem to find outrageous yet when looked at from a distance actually will turn out to be kind of inconsequential.

      The golden rule I think needs to be applies on an individual level before it can be advance further.  The problem is more of the fact that people don’t stand up because the want acceptance and don’t want to stand out in a negative way, but that’s a different topic altogether.

       

      • http://marriedwithdebt.com/ John @ MarriedWithDebt

        I’m with you – I avoid that celebrity stuff like the plague – but I have a wife and two daughters who like American Idol so it’s sometimes difficult. (What I was referring to is the fact that they purposefully put people who are obviously mentally ill or developmentally disabled in an audition room and on TV for the sole purpose of making fun of them)

        I see what you are saying regarding the little things, and price increases. These are a natural part of doing business. I think, like Jeffrey said, it’s the fees that are a slap in the face that really get people.

        My favorite is when people say “let’s run government like a business.” Ok, so we need revenue, let’s raise prices (taxes), “Oh, no, that’s not how a business is run.”

  • http://www.moneyspruce.com/ Jeffrey Trull

    I don’t necessarily mind new fees and price hikes, but I do take exception to how companies go about it. A few examples:

    Verizon – They’re instituting a fee to pay your bill! Come on, that’s just absurd! Why not tack on $2 somewhere else if it means so much. But to tell people they have to pay to pay their bill is just dumb.

    Netflix – They announced their price increases in a rather arrogant email. They also increased htem by almost 50%. And THEN they announced they were splitting the service into two, making it less convenient for the customers.

    I think pushing back is an important part of being a consumer. Otherwise we’d probably see a lot more price increases and fees if we just sat there and took it.

    I don’t think that much effort is wasted, either. No one dedicated their life to fighting the Netflix price increases. Instead, a lot of people dedicated a little time and effort to make their opinions heard (or they simply canceled their service).

    • http://www.dollarversity.com Eric J. Nisall – DollarVersity

      Just to stir the pot, I’ll ask you this: If Netflix was all sugary sweet and sent out a very well-worded letter a month before would you have agreed to it?  And if Verizon called it a connection fee or something else it would be ok?  I’m just trying to get an understanding as to why people react they way they do and what the triggers could be.

      I don’t have a problem with Verizon charging a fee to pay since there are a number of companies that charge what they call a “convenience fee” to pay the bills a particular way.  The way I see it, it is the cost of having options.  What I don’t understand is the reason behind this particular revolt, when a company like  Ford charges $5 at a minimum, and I haven’t heard anything about it.

      It’s kind of the same situation with Netflix.  To me, it was a fee increase, and it’s part of life in my eyes.  They have to pay for the discs and the shipping and I was ok with that.  I just didn’t like the selection, and anyone who tells me that blockbuster or other online services are just as good probably has different standards as me.  I hated blockbuster when I used them, and I would not waste my time sitting in front of a computer screen watching a movie that’s for sure.

      I’m not saying we shouldn’t push back, but the times and reasons people chose to do so are what I’m questioning.

      • http://www.moneyspruce.com/ Jeffrey Trull

        My main problem with Netflix is that they increased prices by about 60% in one shot. How can you not expect outrage? For the record, I’ve been a Netflix customer for 10 years and I still am. I’ve been through price increase in the past, and they handled those without making sweeping changes like they did this time.

        As far as Verizon, I think yes, there would have been less outrage if they somehow bundled or named the fee something else.

        I understand the convenience fee point, but why should it cost $2 to pay online? I’d imagine that’s among the cheapest for Verizon to process compared to payments by mail or phone.

        • http://www.dollarversity.com Eric J. Nisall – DollarVersity

          So for you it’s not simply that they both instituted fees/price increases, but how it was revealed.  Now that’s the kind of response I’m looking for.  Thanks bro.

          Yeah, online would definitely seem to be the easiest and cheapest way to process payments, especially without having to maintain a lockbox or pay people to sort through it.  

          • http://www.moneyspruce.com/ Jeffrey Trull

            Yes. I realize price increases are inevitable. But I think are right and wrong ways to increase prices and implement fees.

            Great, thought-provoking post!

      • Sunshine25

        Can I charge you a response fee of $1 for my post? You seem to like paying fees. I want to get in while you still have money.

        • http://www.dollarversity.com Eric J. Nisall – DollarVersity

          Only if I can charge you $2 for the privilege of reading and posting a comment, since that’s the way you are making business out to be.

          • Sunshine25

            Well if you consider yourself greedy. :) I pay for WSJ, I’m not sure I’d pay for your blog. Dime a dozen.

            • http://www.dollarversity.com Eric J. Nisall

              No worries. If you like the blog, great. If not, there’s nothing I can do. I don’t take it personally.

          • http://www.squarepennies.blogspot.com/ Maggie@SquarePennies

            Sunshine and Eric, I love it!  True entrepreneurial spirit in action!

    • Anonymous

      This pretty much sums up my thoughts.  You fight for what you think is right and for what is fair.  What may be trivial to you is important to someone else.

  • http://onecentatatime.com/ Onecentatatime

    Because unless they cry, eventually they’ll have no money 

  • Anonymous

    For the most part, I agree with you. Some people just live to complain (self esteem issues probably). But when you mention banking, well I disagree. I think we should have free banking and we should move our business to places that are free. I also think we should be able to complain about that when it happens to our own bank (ex. I’m not going to complain about BofA because I have never banked there but I will complain about ING regularly dropping the interest rate on their savings accounts because I do bank there.)

    I don’t see why we can’t have free banking. Banks are saving money by not mailing out statements. They are cutting down on jobs due to decreased traffic in their stores (and call center associates are far cheaper than tellers). I just don’t see the need to pay for an account when they are already making money by having my money for a time being.

    (PS, typo in the first sentence or so. Doubled up on the word “costing”)

  • http://www.thedebtprincess.com/ Jessica

    For the most part, I agree with you. Some people just live to complain (self esteem issues probably). But when you mention banking, well I disagree. I think we should have free banking and we should move our business to places that are free. I also think we should be able to complain about that when it happens to our own bank (ex. I’m not going to complain about BofA because I have never banked there but I will complain about ING regularly dropping the interest rate on their savings accounts because I do bank there.)

    I don’t see why we can’t have free banking. Banks are saving money by not mailing out statements. They are cutting down on jobs due to decreased traffic in their stores (and call center associates are far cheaper than tellers). I just don’t see the need to pay for an account when they are already making money by having my money for a time being.

    (PS, typo in the first sentence or so. Doubled up on the word “costing”)

    • http://www.dollarversity.com Eric J. Nisall – DollarVersity

      In regards to banking, I would agree to a certain extent.  I think that having access to out money should be free, which it is in most cases in the form of checks and counter withdrawals.  In terms of storing money, I think the banks have every right to expect compensation as they are providing the service of keeping the money safe (for the most part) which is no different than the storage unit that you rent to house stuff that you don’t want laying around your house.

      In terms of interest, there really is no argument as I think it sucks that the return on our savings is so low, but the banks themselves don’t have as much control over that as people think.. The rate of interest paid is loosely correlated to the Federal Reserve’s overnight lending rate (the rate which the banks earn for lending the money to other banks), which the government is not allowing to increase at this time.  If you look at the national rate search on bankrate.com, no one is paying higher than 1.00% APY, so there aren’t many options while keeping the money liquid.  Plus, I learned a long time ago that ING was horrible at keeping up with the rate changes, and lost its place as the best-paying institution several years ago.  I left them at least 6 or 7 years ago.

  • Terry Pratt

    I don’t cry, I get angry and I tell others. And I don’t complain about free services like Google (although, come to think of it, they are very much making money off my clicks). And I don’t expect a lot, just basic no-frills goods and services. I live on a poverty-level income and I expect a bare-bones lifestyle. The downside is that I can’t afford fee and price hikes, so I am quite resistant to them.

    While I have a lot of knowledge, I have very little income and no assets. What would a financial advisor type of person make of that?