Here’s how I negotiated out of bank fees — part 2

May 29 57 Comments latest by scott

Here’s how I negotiated out of a $20 overdraft fee and a $27.10 finance charge from Wells Fargo.

I accidentally overdrafted a couple weeks ago (overdrafting is when you don’t have enough money in your checking account to pay off your bills, so your bank helpfully transfers money from your savings or credit-card account. They also helpfully charge you $15-$30 for the service, wiping out all your interest for the year).

I had transferred money from my savings account to checking account to cover a temporary shortage, and the transfer arrived one day late. I saw the overdraft fee, sighed, and called the bank up to get it waived.

Here’s how it went last time I called my bank to negotiate fees.

This time, I had a feeling they would be less than happy to waive my fees, but with a little coaxing…

Ramit: “Hi, I just saw this bank charge for overdrafting and I’d like to have it waived.”
Bank rep: “I see that fee…hmm…let me just see here. Unfortunately, sir, we’re not able to waive that fee. It was [some excuse about how it’s not waiveable].

Bad things to say here:

• “Are you sure?” Don’t make it easy for the rep to say no.
• “Is there anything else I can do?” Again, imagine if you were a customer service rep and someone said this. It would make your life easier to just say “no.” As a customer, don’t make it easy for companies to say no.
• “Well, this Indian blogger dude told me I could.” Nobody cares…but it would be cool if 1,000 customers called their banks and said this.
• “Okay.” Don’t give up here. Despite what you learned in sex ed, “No” does not mean “No” when it comes from a bank.

Try this
Ramit: “Well, I see the fee here and I’d really like to get it waived. What else can you do to help me?” (Repeat your complaint and ask them how to constructively fix it.)
Bank rep: “Hmm, one second, sir. I see that you’re a really good customer…I’m going to check with my supervisor. Can you hold for a second?”
(I’ve been with the bank for many years, which you should always use to your advantage when calling to complain. Banks pay hundreds and sometimes even thousands of dollars in customer-acquisition costs and don’t want to lose you.)
Bank rep: “Sir, I was able to check with my supervisor and waive the fee. Is there anything else I can help you with today?”

Key takeaways:

• Mistakes happen, but don’t be dumb and overdraft like me
• When complaining, have a clear goal and don’t make it easy for companies to say ‘no’ to your complaint
• “No” is the beginning of the conversation

[Update]: Always, always track your customer service calls (you can use this free spreadsheet). When I logged in this morning, I saw that the bank had categorized the overdraft as a cash advance from my credit card and and charged me a $27.10 finance charge. I got that waived (with a fight), but imagine if you’re earning $400/week. Those ridiculous fees just took 10% of your income away, underlining this recent Washington Post article about Americans’ dissatisfaction with credit card fees. If you’re going to say, “But consumers should just read the documentation,” it’s just not that simple.

[Update 2]: To open a high-interest ING savings account (I use one), click here.

Related articles:

• If I were a bank, here’s how I’d deal with overdraft fees
• ”My bank earns 0.5% interest
• Or just browse the entire archives of 400+ articles

57 Comments latest by scott

I’m doing a live interview Friday (today) — listen in

April 6 8 Comments latest by Wise Bread

Quick link: Listen to me being interviewed, live, for an hour starting at 11am Pacific today (Friday, 4/6).

I’m being interviewed by Pamela Slim (who was one of my most popular Friday Entrepreneurs interviewees ever) today at 11am Pacific. This will be a live interview and you can stream it online, free.

We’ll be talking about iwillteachyoutoberich, PBwiki, my book deals, and my thoughts about entrepreneurship. I’m usually bad at keeping secrets on live interviews, so I might let a few things slip about future plans here.

The interview is today and will be streamed live.

• Time: 11am-12pm Pacific
• Date: Friday, April 6th (today)
• Details about the interview here
• Direct link to the streaming interview here

If you miss it live, there will be an archive of the chat up there soon after the interview.

8 Comments latest by Wise Bread

Nicole’s Bridal and Formalwear at Tanforan has poor customer service

April 3 52 Comments latest by George

[This is part of the IWillTeachYouToBeRich Week of Discontent.]

Last week, I needed to be measured for some formal wear, so I went to a tux shop at a nearby mall in San Bruno, CA, where I walked in and asked if they could measure my chest. This is a 30-second procedure that involves using a simple measuring tape.

It was the middle of the day on a weekday, and there was only other customer in the store. The couple who worked there (and own the place, I think) looked at me and snarled, “Are you going to rent or buy something?” I wasn’t, so I just politely repeated my request for a quick measurement. They weren’t having any of it. “We charge $5 if you’re not going to rent or buy.”

Um, I don’t think so. “I’m not paying $5 for a measurement that takes 30 seconds,” I told them, “and I’m definitely not renting here.” And then I left.

Here’s the thing: Things could have gone much differently. Imagine if they’d said, “Oh sure, we can do that.” Then, as they were measuring me, they could have tried to make a sale:

Owner: “So, are you getting married?”
Me: “No, not me, I’m too young!”
Owner: “Why, you’re a handsome man? You must have a lot of girls?”
Me: (Laughing)
Owner: “Well, when it comes time to get married, you come back and see us, ok? Here’s your size.”

And guess what? The next time I needed to get formalwear, I would have gone back there. To me, this is a no-brainer: I hardly ever go to a tux shop, so next time I need one, I would just go to the first one that came to mind–especially if I had good memories of the place. For places we go to infrequently, we’re guided by the availability heuristic, or what’s familiar to us.

Those rude owners thought of their shop as a one-time transactional shop, but I think formalwear shops can be a relationship business, and you can be sure that I’ll never, ever go back to Nicole’s Bridal and Formalwear in the Tanforan Mall. Unfortunately, if anyone searches for formalwear San Bruno or Nicole’s Bridal and Formalwear or formalwear Tanforan, this post will come up to let others know about how poor their customer service is.

Is this just the rant of an unhappy person who was trying to get a free service from a company? Maybe a little, but I think there are larger implications here. How long would it have taken to measure someone? 10 seconds? 20 seconds? Even if 10 people per day come in for a free measurement, that’s less than 10 minutes. And there’s something else.

It’s the difference in trying to make a quick buck, or treating your company as a relationship business. For example, at PBwiki, we could charge everyone for every wiki and try relentlessly to upsell them. And we’d probably make a little more money — for a while. We chose to do it another way: by giving everyone free accounts and making our service valuable enough to to upgrade. We don’t know if it’s the right answer, but so far it’s working, and I’d rather build a community of people who love our service than run a closed service that nickel-and-dimes everyone for everything. Same thing for iwillteachyoutoberich. It’s the difference between making a quick buck or trying to build relationships.

52 Comments latest by George

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