I don't know, maybe there is some law which says billing has to be like this, but I'm dumbfounded by my recent experience with Time Warner Cable (can we call them Charter or Spectrum? or not yet?).
I just couldn't justify paying O($25) per month for a service of which I rarely partake. (I'll use this quasi- "big O notation" throughout this entry to mean "on the order of." It has a similar but not quite the same meaning in mathematics and computer science.) I find a lot of entertainment in YouTube videos for example, and something like Netflix, Vudu, Amazon Video/Amazon Prime, Hulu, etc. would be half the cost or less. So I used the expiration of my SchedulesDirect subscription as a prompt to tell them, "sorry, disconnect me, please." They even offered to knock around $10/mo. off, but still, I don't watch that much on there. After all, how many times can you watch the same episodes of M*A*S*H on WBBZ? I must have more than 100 hours of recordings waiting to be watched on my MythTV.
A few days after I called in the disconnect order, I realized I never asked the CSR what my final bill should be, since it would be prorated. It's also worthy to note that billing is explicitly ahead of time; that is to say, your payment is for the month to come, not for the month that ends on your billing date. I hopped on their Web chat, and they gave me a figure for the partial month's service. I thought I had disabled automatic payment, but they advised me not to pay anything. However, I pointed out to them if I didn't pay for my partial month, and just wait for another bill, I'd be paying late, which I would rather not do for ethical reasons, plus a possible hit to my credit rating. So I logged into TWC's site, scheduled a payment for that reduced amount, and thought that would set things square. But no, that was wrong of me to think that.
For starters, there is ridiculous lag with those folks. It turns out if you want to cancel automatic payments, you should do that before your bill arrives, otherwise an automatic payment will be scheduled anyway. It doesn't matter that the amount to be billed might change between the bill being issued and the payment due date, which is weeks away. I should also note here that Discover's program of Freeze does not apply to certain classes of payments, including automatic charges from utilities (exactly like TWC). I would have liked to prevent TWC from making any further charges to my payment card, but when I asked Discover about this, their answer was that indeed Freeze would not apply to TWC, and charges cannot be disputed before they actually post. You'd hope, wish, and think that the amount charged on payment due time would be at most any difference between any payments already collected and the amount of the previous bill. Sorry, there will be no such luck.
When the original payment date arrived, I logged onto my Discover account and noticed a pending charge for the full month amount. So I called up TWC and asked, what gives? Oh, yes, we see your payment for the partial month here, and we also see that the automatic payment went through, we'll just refund that full month's amount to your payment card. Keep in mind TNSTAAFL, because toll-free number (TFN) per-minute charges had to apply, maybe as well as telecomm charges on top of that (depending on how their toll-free routing is accomplished and their deal with their telecomms provider). Plus the agent to whom I spoke had to be paid, the workstation he used had to be paid for somehow, the network to which that workstation was attached had to be paid for, the IVR which routed my call had to have been purchased and maintained, and so on. Even less insignificant than these minor overheads, I happen to know from working for a small business which accepts credit cards that there is a per transaction charge plus a percentage of the purchase fee for accepting a credit card payment, typically around $0.30 plus 2%. So that means that would be at LEAST O($0.60), $0.30 for my manual partial month payment and another $0.30 for their erroneous charge. I honestly don't how much the transaction charge is for refunds.
An aside: I used to get my hair cut at Fantastic Sam's all the time. I thoroughly realized why they had a sign that read something to the effect of, "minimum credit card payment is $10." Their analysis likely figured out that paying the average shop rent, their stylists, etc. had not much margin, and that the credit card processing costs would cut significantly into that margin, if you'll pardon the pun. As I recall, haircuts were $7 at the time, so no, I couldn't use a card, had to pay cash.
Well enough; a few days later, I saw both the charge and the refund were finalized on my payment card account. But that wasn't the end of it. No, that'd be too logical.
About two weeks before posting this, TWC sent a bill by mail. It turns out, bottom line, the chat rep. got the amount total wrong, I still owed another $1.04. Despite not being a customer anymore, they also sent along a pamphlet about their billing practices, "instructions on how to use your TV service," pricing, digital cable, remote controls, parental controls, and on and on. Of course, they also sent an envelope, assuming I'd be writing a check and mailing it back. Of course, again, TNSTAAFL. They printed two "letter" size pages, one with the relevant billing information, another with ads for even more expensive services (O($90)/mo.), plus the mentioned pamphlet, the return payment envelope, had to mail it in an envelope for the whole thing, and paid postage to send it to me.
So...I went to log onto TWC's site again to make my $1.04 payment, of which I knew a significant fraction would be eaten up by transaction fees. So be it; I don't want to deny them payment, even of that little amount, and I wouldn't want the potential damage to my credit rating. Except...that was not possible, because TWC decided to shut down Web access. So what's a debtor to do? Why, make a call to a TFN to authorize another charge card payment of course. I realize at this point I could have written a check and mailed it to them, which perhaps wouldn't cost them as much. However, I have scant few of those left, and I don't want to "waste" them when other payment methods are available, lest I have to spend several dollars to have many checks printed which I'll not likely use (especially consdiering they should be printed as Key checks instead of First Niagara checks). So there's more per-minute TFN charges, more agent time, and so on, plus another payment card transaction fee of course. This is quickly eating way into the $1.04 that I owed. And then you'd think that'd be the end of it, but I'd be wrong again.
A few of days ago, TWC sent another bill, this time showing $1.04 as a previous balance, but nothing in payments, for a bottom line of a $1.04 balance. And once again, a return envelope was included, another one page ad for services, yet one more copy of the policies pamphlet, an outer envelope, postage to send it, just ridiculous in the grand scheme of things. Noticing that there was no credit for my payment of a few days prior, I called them again to ask, what gives? So of course, there had to be more TFN charges, more agent time, and so on. The CSR assured me the second bill had been printed and mailed just prior to me arranging my payment, and indeed my balance was zero.
I have little doubt that at least one more mailing will be made showing that my $1.04 has been paid, my balance is zero, another sheet telling me that I can have a great triple play experience for four or more times what I was paying (despite telling them on the disconnect call what I was paying was too much); who knows, probably another policies pamphlet, and perhaps even though I don't owe any money, another envelope to return my (non)payment.
Let's take a moment to compare and contrast this with the IRS and some other companies, namely USA Datanet, Ink Bird, Monoprice, and Newegg.
First, I'll say I can't believe I'm using this as an example of being better, but the IRS is more sensible, at least in one, limited way. I know it's just outside the stated limit, but if you owe less than a dollar to the IRS, the feds are willing to call it even, and you don't have to pay.
I used to be a customer of USA Datanet. Their business model was charging a cheaper per-minute rate for long distance calls, only $0.10/minute, and transporting the calls with VOIP instead of conventional telephony infrastructure. Plus as a promotion to join, they gave away 60 minutes "free." The trouble is, I'm pretty sure they never profited from having me as a customer. I live in New York and have siblings in Texas, but at the time, we were both people kind of busy with our jobs, so we would rarely talk. For my first call, I think I talked for about 70 minutes. So that was my free 60 minutes, plus a dollar. They sent a bill, as you can imagine including an envelope for returning a payment, but I paid with a MasterCard. So that was a printed page, plus the cost of two envelopes, plus postage, plus the transaction charges for MasterCard. The next month, they sent another statement, showing that I owed a dollar and paid a dollar, so that was a printed page, an envelope, and postage. Over the next couple of years, every few months I would make a call and leave a message on her answering machine (this was well before voicemail), which would generally only be a minute or less. So I would be sent a bill for $0.10 or $0.20, I would pay with MasterCard over the Web, and the next month get a statement saying I paid what I owed. This was stupidity similar to TWC; spend more to bill and send statements than there was revenue.
What I fail to understand is that USA Datanet called me up one day wondering why I had not used their service in many months. After all, the way you would make calls is to call a PoP and enter in your account codes, and then the desired destination. Therefore they could tell when I would call, but more importantly. there was no obligation to use their service because it was not billed from a specific line/phone number. I just told them there was no reason, I would still use their service if I really needed to talk to my sister, just that I hadn't in quite a while. You would have thought they would have done some analysis deeper than "Joe hasn't used our service in a while" and figured out this is not exactly a profitable customer to have. Or...I suppose they were trying to entice me to make some longer calls, like the first longer-than-an-hour one that I made, so I would be a profitable customer.
We now see the result. USA Datanet is out of business. Maybe their business model just doesn't have the appeal that it once did, or maybe they spent too much on providing service for more than the revenues they were receiving.
A while ago I got annoyed at the unreliability of the mechanical thermostat in my main floor refrigerator (I have another in my basement). So through Amazon I bought an Ink Bird electronic thermostat. About 6-8 months in, the thermostat was working OK, but it would not accept any commands to change or display anything. It is stuck at 1.9° ± 2°. When it powers up, it shows "1.8" which I can only assume is some sort of diagnostic code. I wrote an email using Ink Bird's Web site asking if there was anything I could do, such as reflowing solder. Even though they are based in China, I'm going to guess they were reluctant to tell me to do much with this thing, figuring I'd do something to it which would cause me to be shocked. I also sent them a very short video of their unit being plugged in, and the "1.8." Eventually they asked for my Amazon order number, and sent another thermostat. I explicitly asked if I would have to return the defective one, and they said no. They realized that it would cost O($8-$10) to ship it back, which is about half the cost of a new one. They just figured this as a cost of doing business. The thing is, I bought two more, figuring I eventually want to replace the basement's mechanical thermostat, as well as having a fully working one for the main floor. Plus I have the one they sent as a spare, should one of the two active ones fail. So for the price of 3, I basically have one for free. And the one still works, it's just not adjustable, and is set for an awfully chilly temp.
A couple of months ago, I was frustrated at not being able to connect up all my audio gear simultaneously, always wanting for this cable or that cable, so I ordered a bunch from Monoprice ("MP"). The pickers must have been having a bad day because instead of getting the 5 Y cables of 3.5mm plug to left and right RCA jacks, I got 5 cables of RCA plug to two RCA jacks. (In warehouse terms, there is "pick," where items are taken off shelves or similar, "pack" which is readying them in packages in preparation for shipping, and "ship." A lot of operations have people do the picking, hence "pickers.") Both varieties of cable retail, from them, for O($0.80) each. I contacted MP, they redid that part of the order, and they said just dispose of, or use, the erroneously sent cables. They realized that the lost value was O($5), and that it'd be around the same dollar amount for me to ship the erroneous cables back. They're cognizant of the price of good customer relations and the economics of the goof.
Finally, I will relate a tale of Newegg. I ordered a number of items, one of which was a 3 m HDMI cable and an HDMI to DVI-D adapter, sold as a single item. When the combination arrived, it appeared as if cable had been picked but not the adapter. I will admit, I made a goof; as I opened the bubble pack they came in, the adapter fell out and out of sight. What Newegg ended up doing was refunding that item of the order, and telling me to use the money towards the purchase of the "missing" adapter. When I realized my error a few days later, and found the adapter, I called them up again, asking them to charge me for the combination item. They said something like, tell you what, for this one we appreciate your honesty, but we're just going to call it even. This really doesn't "hurt" us. Part of the issue was that Newegg has a strict policy that it does not take any orders over the phone. I'm sure they have experience where this is their most cost-effective way of doing business, either because they've gotten burned by phone orders before, or their considered analysis is that maintaining Web servers and networks is far cheaper than agent time. While in the short term this was a "minor" loss for them, I subsequently made more purchases from them instead of Amazon specifically because of their willingness to give me the benefit of the doubt on that one set of orders.
I can only guess at the economics of of the IRS and their banking services. I will guess that handling amounts of only a dollar might cost them more in processing fees or labor (especially if I were to mail in a check) than they would gain.
I can understand MP being wise and realizing the perspective of most customers, that most customers wouldn't want to pay the value of returned items in shipping alone for something they goofed in doing. On the other hand, they trusted me an awful lot that I was telling the truth and not trying to scam them out of goods. At least I'm reasonably sure since they ship in bulk, they do not pay the same rates as a "retail" shipping customer like me. Still...there was an extra small box, more pickers' and packers' time, and so on. All I can hope is there was enough margin in the other items I bought that day that at least they broke even, or came close. What made me a little nervous about the long-term viability of that company is that it took over a week for the "RMA" to go through, and when I asked about it, they said their RMA people were backed up more than usual.
Ink Bird likewise had a lot of faith in me (I could have sent them a doctored video showing them the "bootup" of their thermostat and the brief showing of "1.8"), and likewise thought they were willing to take a similar hit in a second thermostat, a second box, more shipping, etc. for improved reputation. I don't know what the warranty is supposed to be on those ITC-1000 thermostats, but somehow I don't think I was in the warranty period.
But sometimes businesses seem really stupid, as I've related with USA Datanet and Time Warner Cable (TWC).
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