Are you being penny wise and pound foolish?

Are you being penny wise and pound foolish?

Two quick customer service stories to illustrate a point:

First story: I've used the same email provider for more than 20 years. But for technical reasons, recently I needed to switch providers, so I canceled my service with them a few weeks in advance of my renewal. The day after my cancellation went into effect, I received notice that I had been charged $480 for the coming year. (And of course, when I logged in to my account online, this charge appeared on the very same page with a giant header saying "Account canceled.")

So I contacted the provider and was told that my refund request has to be "reviewed at many levels" before it can be refunded. Two weeks later, I still haven't been refunded my money, but I am no longer able to access the account online! (Progress, I guess?)

Second story: A past client of mine has had an ongoing billing dispute with their software vendor. The association is being charged for services that they should not have been billed for. The bill in question is roughly $1,200. The software company has discussed the bill internally for several months now, involving multiple senior staff. Still no resolution, but plenty of back and forth between the association and the vendor.

What do both of these stories have in common (besides the obvious horrendous customer service)? In both cases, the companies are spending MORE money adjudicating the dispute than the actual amount of money in question.

In the first case, the company in question is a billion dollar company, yet they are spending hours on paper pushing...for $480!

In the second case, while it's not a billion dollar company, instead of just cancelling the charge, the issue continues to be batted around among different senior staff at the vendor. Each time it's discussed, that costs the vendor money.

My advice: When it comes to small dollar issues, don't get caught up in an argument about "who's right." You're almost guaranteed to spend more money on the argument than you would lose in simply refunding the money. Don't be penny wise and pound foolish.

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