Convenience fees allow organizations such as telecom and utility companies to charge end-use customers for credit and debit card usage to pay bills. While many consumer advocates argue that this is a form of surcharging, it is legal because, by definition, the services are providing a convenience.
Utility bill payment services provide customers the opportunity to pay their bills in person or to send them end via traditional US mail. If customers forego those options and seek to make payments through electronic transfers or credit cards, utility companies then have the right to charge a convenience fee – to make up for processing fees that the utility company must then incur from credit card companies or banks.
Who can make sense of it all?
Of course, this is a lot of extra legwork for companies whose primary function is not to juggle processing fees and read the oft-incomprehensible legalese put forth by the big banks and credit card companies of the world. Utility companies exist to provide residences of their communities with the most essential of services – namely gas, electricity, water, waste management, etc. – but tacking on convenience fees on a customer’s bill can have negative results.
While the obvious upside of the right for utility bill payment services to charge convenience fees to their customers is the fact that the company doesn’t spend its hard-earned money on giving even more wealth to the banks of credit card companies that it must do business with, the downside is just as obvious.
How do we keep customers happy?
While some utilities are still largely monopolized – like John D. Rockefeller’s Standard Oil back in 1870 – others such as the electricity industry, have become de-regulated, which means that competition for consumers is fierce from location to location, and something like poor customer experience can be the death knell to a company’s market share.
So how to keep customers happy and your money in your own pockets, rather than in the bank or the credit-card company? The answer may lie in a new offering from a number of companies, including Payment Savvy, which offer free payment processing for free to the utility company and acts as the bill processor for customers, meaning the convenience charge collection and the associated negative feeling of consumers are almost universally transferred to the third-party agency.
Think of it in this regard. When prices go up at the movie theater- which they seem to do almost every summer, do we write letters to Hollywood executive and complain about it? Of course not, we tell it to the person taking the tickets, or maybe ask to see the theater manager if we’re feeling particularly frosty on any given day. And those employees are trained in customer service and customer relations, and can explain the situation in a way that might not make the movie-goer particularly happy, but at the very least can defuse the anger and let them understand the situation objectively.
What sort of support does the convenience program offer customers?
That same principal holds for. Customers who seek to pay with credit cards or debit cards will be redirected to another website, enter their information, be allowed to set up automatic payments, and then informed of the convenience charge before they confirm payment. An explanation of said payment will be available in print, and because most third-party processing companies have 24/7 support available, customers who require more of an answer can get it instantaneously via either phone or instant messenger capability.
To this end, relationships between utility companies and customers remain strong, and free payment processing to be a norm, not an exception for utility companies.