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December 2011

In what almost seemed like a staged publicity stunt, Verizon Wireless quickly rescinded their plans for a new $2 fee for most bill payment options. An employee leaked an internal memo describing the new fee, and within twenty-four hours, the wireless company both confirmed and then rescinded the fee, citing their policy of listening to their customers. The timing was convenient; Verizon Wireless had been suffering from a number of mobile service outages that had customers complaining about the company.

It seemed to me there was more outrage about the service interruptions than the $2 fee. The fee was addressed within 24 hours while the service outages were never properly addressed. Would a company stoop to creating its own fake conflict in order to distract customers from other problems?

Real customer outrage is powerful, however. Bank of America’s $5 monthly debit card fee was in the works when massive consumer feedback was successful in convincing the company to reconsider its plans, and find revenue from consumers elsewhere.

There are issues more important than these small fees. While fees here and there can have a snowball effect, both over time and across other companies happy to charge the same fees once success is apparent, the bigger issues often don’t get as much attention. Wells Fargo’s change of policy to include mandatory binding arbitration is a much bigger problem for consumers than a fee, but since it isn’t immediately apparent how this could affect customers, people stay silent. Customers who have trouble with the bank will be prevented from availing themselves of a court process that includes discovery and appeals.

Most of the time, binding arbitration clauses won’t have any immediate effect on customers’ wallets unlike monthly fees, but the consequences could be worse. With enough outrage, Wells Fargo would likely change these plans, but the issue is not getting enough attention.

Here are some of this week’s most interesting articles in addition to a few articles I’ve published elsewhere. [click to continue…]


Update: Less than a day after a Verizon Wireless employee leaked a memo with this information, the company has announced that it will not be moving forward with the implementation of this $2 fee.

The sad fact is we now live in a world where many companies have left their customers behind in the search to squeeze every possible cent out of every transaction. I’ve long lamented the increasing incidental fees charged by airlines; you can’t eat, check a bag, or receive a seat assignment early without paying extra now, and soon you may not be able to sit or use the restroom in-flight without swiping a debit or credit card. Gas stations charge more for fuel if you want the convenience of using a credit card. Banks tested and for the most part ultimately backed away from monthly debit card fees.

Starting January 15, Verizon Wireless will charge its own customers $2 to pay their own mobile phone bills.

Verizon WirelessOnly certain payment methods will be subject to this fee, but the new policy leaves only a few opportunities to avoid this surcharge:

  • Enroll in auto-payment, so your bank account is debited or your credit card is charged the same day every month.
  • Mail a paper check as if you’re still living in the twentieth century.
  • Use your bank’s bill payment service.
  • Walk into a Verizon Wireless store and pay a bill in person (an option for everyone, but a popular for those without bank accounts).
  • Pay with a Verizon Wireless gift card.

If you use a credit or debit card to pay your bill via Verizon Wireless’s website or over the phone, the $2 fee will apply, but if you pay via check (electronic ACH or paper) via phone or online, there is no fee. It’s another case of payment type discrimination; it costs more to process credit and debit card transactions, and Verizon Wireless is passing that cost along to certain customers. The customers most affected are those who need to wait to the last minute to pay their bill — customers living paycheck-to-paycheck, many of whom don’t have bank accounts.

It doesn’t take much to avoid this fee, but it’s another hassle for many customers and an indication that the pattern of nickel-and-diming across a variety of industries will continue. And those most at risk are those who have the least power to do anything about it.

Photo: ColumbusCameraOp


This is a guest article by Emily Guy Birken, author of The SAHMambulust. In this article, Emily explains and reviews the 3/50 Project, a movement designed to boost local economies.

The presents have been given out, the wrapping paper has been cleaned up, and Black Friday, Cyber Monday, and Small Business Saturday from American Express are just distant memories. Now may not be when most people are thinking about shopping, but it’s the perfect opportunity to commit to really help small businesses in your area for 2012. And what do small businesses need more than anything else? Loyal customers.

This is the basis of The 3/50 Project, spearheaded by Cinda Baxter, a retail consultant, professional speaker, and former retail business owner. Back in 2009, after hearing several reports about how patronizing local brick-and-mortar stores could help the economy, Cinda wrote about the achievability of economic recovery if we all simply commit to being good customers to independent retailers.

BakeryFrom that blog post, a movement was born.

The idea is very simple. Pick three local, independently owned businesses in your area — businesses that you would be sad to see shut their doors — and plan on spending $50 total per month among those three businesses. That’s it. The movement does not ask you to spend more than you already do. Just plan on $50 of your monthly expenditures going toward local businesses.

It is important to note that sometimes you will end up spending a little more money by purchasing locally rather than at the neighborhood box store or online. However, paying above bargain-basement prices means that you are also helping your local economy — a fairly easy trade-off in most budgets.

What’s exciting about making this commitment is the fact that it could contribute to our financial recovery. According to the statistics provided by The 3/50 Project website, every $100 spent in local brick-and-mortars results in “$68 return[ed] to the community through taxes, payroll, and other expenditures. If you spend that in a national chain, only $43 stays [local]. Spend it online, and nothing comes home.” Imagine the boom to the economy if everyone simply chose to spend some of their money locally.

The 3/50 Project is specific in how it defines an independent business. Though a franchised store may have a local owner, it is not one of the local businesses that The 3/50 Project is aiming to help. As a franchisee, the owner of a fast food restaurant, for example, can benefit from national ad campaigns, preferred vendor lists and large-scale price negotiations. This project is looking to help the independents who are relying on their own unique brand, pay their own expenses for marketing, rent and other operating costs, and operate from a storefront, rather than their home, a kiosk, or the internet. The full description of what constitutes an independent retailer is available here.

Deciding to try The 3/50 Project in your community does not mean that you have to give up your Starbucks coffee or your cheap groceries at Wal-Mart. There is room for national chains, internet shopping, and local stores in your commitment. This is an opportunity to be mindful about your spending, which should always be a goal of responsible personal finance. Why not help your local economy while you’re making savvy spending decisions?

Photo: Calgary Reviews
3/50 Project


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