These days, more and more people are complaining about capitalism. They argue against price increases, executive compensation and corporate greed. But what they fail to realize is the true power consumers have to get things to go their way.
True, some businesses make it nearly impossible to negotiate, leaving the consumer with a choice of "take it or leave it." An good example is Comcast Cable. In my neck of the woods, the only choice I have for cable TV and Internet service is digital cable through Comcast or satellite TV with DSL Internet access. Cable beats DSL, so if I want that service, I pretty much have to pay whatever price Comcast sets. If I feel the price is too high, I can call and argue for a decrease, which I have done, but ultimately my choice is either pay or not get the service.
But when it comes to retail, consumers seem to ignore how much power they have, how much they can manipulate corporate greed to their advantage. A greedy business knows that any profit they can get from you is better than nothing, and often will negotiate with you if the entire sale -- and possibly future sales -- is on the line.
I have two stories about this in two days:
In July, I ordered an electric guitar from Amazon.com. The item was not even in stock, and had an estimated shipping date between September and December. The $500 guitar was on sale for $150 with free shipping, as long as I was willing to wait months to get it.
Of course I was, for that kind of deal. (Such a sweet guitar, too!) I've scoped them out used and, being somewhat hard to find, the same guitar sells used for $250-$300. So to get a brand new one for $150 shipped was worth the wait.
But in early September, I got an e-mail from Amazon telling me that since they were unsure of when the item would be in stock, they were canceling the order, even though I was willing to wait almost indefinitely in order to get that ridiculously low price.
At that point, Amazon took the product off their site, and showed it as only available from a third party for $439 plus shipping.
I called Amazon, and after some wrangling, the customer service rep told me he would add a note to the account and to check the site periodically, and that if Amazon did put the item back up for sale themselves, I would be allowed to order one for $150, regardless of the current price.
Then today, I checked Amazon, and they again were offering the guitar for sale from Amazon for $200 plus shipping, albeit still with a "you'll get it when we have it" shipping date. But, again, for that price, I can wait. I put it in my cart and called Amazon to get the price reduced to the original $150 total cost.
This time, the CSR told me that they were unaware of any note on my account, and that the $200 plus shipping was the best they could do, seeing as it was so far reduced already.
BS, right? I actually asked the CSR, "So, when the other rep told me they would note the account that I could get this item for $150, they were lying?" The CSR apologized and repeated that I could get it for $200 plus S&H. I asked to speak to a manager/supervisor, because I couldn't believe that the CSR would just feed me a line of crap, knowing that at some point, I would be back expecting the deal he promised.
I spoke to an alleged manager, Mark, and within less than a minute, he had adjusted the price of the item in my cart to $149.99 shipped.
I didn't yell, I wasn't rude. All I did was politely tell him what I had been told by the first CSR, and that if it was not honored, I would no longer patronize Amazon.com, because they are not exclusive sellers of anything, so I would gladly pay more elsewhere out of principle. Looking at my account, he could see that I give Amazon a fair amount of business, and realized immediately that any cut in profit he would have to take in order to appease me this one time was far outweighed by the amount of profit he would make from me in the long run.
(2) Citizens Bank
I had an RBS Mastercard. They changed over a month ago to Citizens Bank, and sent me a new card and fee schedule. But things were different.
For some reason, my interest rate went from 13% to 18.5%.
I had no issues with the account, wasn't ever late or anything like that. The bank just assumed they could raise the rate and I would accept it.
So I called the 800 number and had a very short conversation with the CSR. I explained my concerns, that with excellent credit and a perfect track record with RBS, I couldn't understand why my interest rate would jump after 5 or 6 years of 13%. He told me that the bank simply was "going by new federal regulations" and that my options were to accept the new rate or cancel the account.
I told him to cancel the account.
I was transferred to the department to close the account, and they asked why I was closing it, so I told them the same thing I told the first CSR. They informed me that if the interest rate was an issue, they certainly could negotiate that. I told them the choice the first CSR gave me, and this CSR was not impressed by that and said the first CSR
Within a minute or two, my new card was activated at 13%.
Again, no yelling, no cursing. Just a reminder that the bank had made money off me the past few years, and could either continue to make that amount or nothing at all, seeing as there are plenty of banks looking for profits.
I realize that you may have read all this and are really angry that it was so long, and so dull. But it's important for people to realize that, if you're willing to sacrifice convenience or savings, you can make a stand as a consumer. A business cannot survive without customers (unless it's in bed with the government, then it can make money for doing nothing, but that's another post!). Switch the choice onto them: Do they want the business you offer them, or none at all?
You have to be willing to do without, though, so be prepared. Comcast again is a great example.
They offer a bundle (phone, Internet and TV) for $100 a month, but only for a year. After the year, the price goes to a little more than $140. For several years, I have been able to keep paying only $100, because when they raise the price, I call and tell them I simply will do without cable and will go to satellite/DSL; I know the service is not as good, but it's a matter of principle -- $100 a month to get e-mail, watch regular cable TV (no pay stations here) and make a couple of phone calls is simply the max I am willing to pay.
What usually happens is that they tell you to take it or leave it. Tell them you'll leave it. When they transfer you over to the "retention department," suddenly it IS possible for them to extend the $100 promo price -- "but just for one more year."
That was about 4 years ago. At some point, they may be willing to lose a customer, and that's when it's on you, the consumer, to stand on principle, and show them that $100 a month is better than nothing.
So that's it, as long-winded as it was. Do it, and tell your friends to do it, too. You can't bitch about corporate greed if you willingly let them get away with it. Just make sure you're ready to carry out your threats. You may lose some convenience, like I would hate to not shop at Amazon, but if you let yourself be victimized by bad business, then it's more your fault than it is the businesses'.