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How To Lose a Paying Customer

 
 
 
 
 
 
 
 

by Samuel Greengard

Hand some companies an arsenal of digital technologies and they find a way to blow themselves up.

Case in point: for years I carried a United MileagePlus Visa card from Chase Bank. I charged well into the tens of thousands of dollars a year on the card. I made payments on time. It's difficult to imagine that this wasn't a highly profitable arrangement for Chase.

Things began to unravel one Saturday when I went online to make my monthly payment. I authorized the transaction at around 3 p.m. Pacific Time. It turns out the cutoff was 2 p.m. Pacific Time (5 p.m. Eastern Time). And because the next day was Sunday the payment didn't post until Monday, thus exceeding the bank's one-day grace period.

The result was approximately $85 in finance charges on the next statement. Not surprisingly, I called customer support and explained my circumstances, also pointing out that I had made previous payments on time. I was greeted with an unfriendly "can't do."

The conversation went something like this: Me: "Could you please wave the finance charge based on my previous payment history with Chase?"

Agent: "We're unable to waive any finance charges."

Me: "May I speak to a supervisor?"

Agent: "I am unable to connect you to a supervisor."

Me: There's nothing else you can do?"

Agent: "No. I'm afraid you will have to pay the finance charge because you were late with your payment."

Me: I'd like to cancel my credit card immediately."

Agent: "I'd be happy to help you with this."

According to my calculations, Chase has lost at least a couple thousand dollars a year in revenues.

But wait, it actually gets worse.

Since cancelling the card I've received dozens of advertisements by mail and e-mail, promoting the, you guessed it, United MileagePlus card from Chase. Seems they now want me back as a customer and I'm reminded of this fact on a regular basis.

It's incredible that in an era or ultra-sophisticated business analytics tools and powerful customer segmentation software, companies continue to gouge out business by butter knife. Worse, this type of dysfunctional interaction with customers is the norm for a lot of companies. They skate by doing a mediocre or worse job--all while they tell you how much they value your business while you're waiting on hold.

Bank chases tail. Tail wags bank. Customer goes away.

 
 
 

4 Comments for "How To Lose a Paying Customer"

  • Dan B June 16, 2011 8:30 pm

    I can actually relate a similar but completely opposite situation with my Discover Card. I switched to online statements a few months ago (after their incessant requests to so finally got to me) Apparently, I missed a payment notice and went an entire month without a payment. I called the Customer Service number, explained my mistake and Discover waived not only the penalty but the interest as well. Kudos to them...

  • Askold June 16, 2011 1:39 pm

    I'd suggest you don't cut it so close next time. Seems like you are 100% responsible for the result due to your actions. Why is it the responsibility of Chase to fix your problem?

  • Don June 16, 2011 12:57 pm

    No doubt, this kind of canned auto-reply from customer service reps likely costs companies into the millions of dollars in terms of lost business. I had a VISA card issued by another company which shall remain nameless. I used it exclusively for business travel, which amounted to $2000-3000 a week, every week, for a couple of years. While I never carried a balance on this card (except in the rare event that my company was slow in reimbursing my expenses), you know that the issuing bank was still making their money on the fees they charged to the airlines, hotels, restaurants, etc. They inexplicably and with little notice raised my interest rate. When I called and asked them to review my use and payment history and reconsider, the CS rep said "Can't do that". Like you, I replied with, "then please cancel this card and close this account immediately", and they said "CAN do" to that one. Well, guess what -- it's a zero-sum game, so my next card company was more than happy to pick up the slack! And the original issuing bank is no longer with us.

  • devans00 June 16, 2011 12:20 pm

    This is pretty bad on Chase's part. I suppose they measure success on the acquisition of new Customers rather than on Customer retention. Reminds me of online music service I had a few years ago that charged ongoing Customers over 3 times more than new Customers. The company saw no problem with that arrangement. Since they went out of business in about a year, I guess the market didn't agree with that pricing scheme.

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