Verizon Wireless customers have a lot to grunt about going into the New Year. First, the company has been experiencing technical problems with its new fourth generation, 4G, high speed wireless network. This has caused several service outages this month and has also affected the activation of new phones, which is not good news for the many customers who purchased phones during the holiday season for their loved ones. To add to their frustration, Verizon announced Thursday that starting January 15th, they will be imposing a $2 payment fee for any customer paying their bill by phone or website.
According to Reuters, Verizon Wireless defends its fee by stating that “the fee is designed to address costs incurred by us for only those customers who choose to make one time bill payments in alternate payment channel (online, mobile, telephone) and who choose not to use the other options available to them…” This statement has done nothing to console outraged customers. Numbers of angry comments flooded the Verizon forum, with one customer saying “I’m getting tired of businesses figuring out ways to get their hands in my pockets.”
But is Verizon really in the wrong? There are ways to avoid the fees like paying by check, making a payment at the store or enrolling in their AutoPay program. It seems that Verizon may be targeting the fee to customers who cost more money to serve them. Credit and debit cards cost them more money to process every time they make a one-time payment, so they’re adding on the fee to compensate for those extra charges. Verizon is not alone since suppliers add surcharges to help balance out the extra costs for their services.
Although surcharges are not foreign to the overall fee of a supplier’s services, it can be a factor in whether or not they will keep those services or choose to go with another supplier whose fees aren’t as high. A good example would be the airline industry. Almost all airlines now charge a bag fee for all checked bags. Airlines like Southwest who do not charge bag fees have profited from this because customers want to save as much as possible and will tend to go to companies with lower prices.
According to Reuters, Verizon Wireless defends its fee by stating that “the fee is designed to address costs incurred by us for only those customers who choose to make one time bill payments in alternate payment channel (online, mobile, telephone) and who choose not to use the other options available to them…” This statement has done nothing to console outraged customers. Numbers of angry comments flooded the Verizon forum, with one customer saying “I’m getting tired of businesses figuring out ways to get their hands in my pockets.”
But is Verizon really in the wrong? There are ways to avoid the fees like paying by check, making a payment at the store or enrolling in their AutoPay program. It seems that Verizon may be targeting the fee to customers who cost more money to serve them. Credit and debit cards cost them more money to process every time they make a one-time payment, so they’re adding on the fee to compensate for those extra charges. Verizon is not alone since suppliers add surcharges to help balance out the extra costs for their services.
Although surcharges are not foreign to the overall fee of a supplier’s services, it can be a factor in whether or not they will keep those services or choose to go with another supplier whose fees aren’t as high. A good example would be the airline industry. Almost all airlines now charge a bag fee for all checked bags. Airlines like Southwest who do not charge bag fees have profited from this because customers want to save as much as possible and will tend to go to companies with lower prices.
Companies are pretty good at finding ways to gain back extra costs they have incurred when servicing customers. It’s too early to see how Verizon will be affected by all the negative attention this new fee has gained, but with enough push, the company may be compelled to pull the fees.
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