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December 01
With economic concerns weighing heavily, 42 percent of Americans — and 49 percent of parents — say they plan to spend less this holiday season than last year, a recent survey found.
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Does the fee have any relationship whatsoever to the cost of the service? Do companies understand that they don’t have much leeway if we already are angry with them? Is a company telling the whole truth when it imposes a new fee? Are we getting something really neat in return? And are we worrying too much about the wrong types of fees — and not enough about ones that are truly consequential?
These are the five questions I posed in this weekend’s Your Money column. In the wake of the Bank of America debit-card fee fiasco, it sure seems as if we need a new set of standards for what constitutes a reasonable fee. So this week, I asked some of the smartest consumers I know to weigh in on the question.
Given that we have a pretty savvy bunch here on Bucks, too, I’d like to hear what you think about the principles I suggested in the column, the fees you hate (and others that you gladly pay) and about your own big ideas about when to get mad and when to just pay.
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As the events of the last couple of months have shown, Americans do not like to pay bank fees. Indeed, a new survey shows, a majority think the only acceptable A.T.M. fee is no fee at all.
More than half of those surveyed for Ally Bank (an online bank that, surprise, promotes its lack of fees, and reimburses the fees its customers are charged for using other banks’ A.T.M.’s) said they thought the only fair A.T.M. fee was zero.
The survey also found that about half of those polled (53 percent) said they would rather take time to search for a free A.T.M. than pay a fee for the closest, most convenient option.
The telephone survey for Ally Bank was conducted in October by the Opinion Research Corporation among 1,016 adults (510 men and 506 women). The margin of sampling error was plus or minus three percentage points.
Here are some other findings in the survey:
• 84 percent of respondents said they didn’t believe it was acceptable to charge a fee for checking.
• 79 percent said they didn’t believe it was all right to charge a monthly maintenance fee.
• 77 percent said they didn’t think it was right to charge an A.T.M. fee.
The findings suggest that many bank customers will be disgruntled, as banks continue to impose a variety of fees on their customers to make up revenue they have lost because of new limits on fees they can charge merchants for processing debit card transactions.
What sort of bank account fees, if any, do you think are acceptable?
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Paul Sakuma/Associated Press Despite the recent price hike, Netflix’s streaming service is still popular.
Sure, Netflix lost a million subscribers when it raised its prices by 60 percent. But that means 24 million people stuck with the service. Is this, like the success of the iTunes music store and the Apple App Store, a sign that consumers have become more willing to pay for content? Do members of the Napster generation still expect some media, like news, to be free?
Read the Discussion »
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Employers in New York increased their staffs by 29,400 workers, while those in Texas added 29,300, figures from the Labor Department showed Friday. Joblessness increased by 0.4 percentage point in Illinois, Michigan, Minnesota and South Carolina. Nevada continued to lead the nation in unemployment with a rate of 12.9 percent.
Widespread job growth is needed to shore up incomes after spending among consumers ground to a halt in the second quarter. That raised concern that the world’s largest economy was stalling. A Labor Department report on Aug. 5 showed employers added 117,000 workers to payrolls last month and the jobless rate fell to 9.1 percent.
“The overall labor market was doing better than previous months, but the bigger point is that it’s a lot weaker than earlier in the year,” Paul Dales, senior United States economist at Capital Economics in Toronto, said before the report. “That’s a concern given that any data from July won’t reflect the market turmoil in the last couple of weeks that really could have prompted some businesses to postpone or cancel any hiring plans.”
After Nevada, the jobless rate was highest in California at 12 percent, and Michigan and South Carolina, both at 10.9 percent.
Payrolls in Michigan rose 23,000 and Tennessee gained by 14,300. They rounded out the top four states showing the biggest increase.
The biggest job losses last month occurred in Illinois, where employers cut payrolls by 24,900, and in Florida, which had a 22,100 decrease.
Over the last 12 months, six states lost jobs, including Indiana, Nevada, Kansas, Alabama, Georgia and Delaware.
The jobless rate in North Dakota, the lowest in the United States, increased to 3.3 percent from 3.2 percent in June.
While payroll growth picked up in July, employment prospects for Americans have dimmed compared with earlier in the year. Employers added 216,000 workers from May to July, compared with 646,000 in the previous three-month period.
The risk of a recession has risen to 30 percent from 14 percent in July, according to the median of the 39 economists in a Bloomberg News survey. A sell-off in stocks, government fiscal austerity and a lack of jobs will hurt American growth, which slowed to a 0.9 percent pace in the first half of 2011, the economists said.
State and local employment data are derived independently from the national statistics, which are typically released on the first Friday of every month. The state figures are subject to larger sampling errors because they come from smaller surveys, making the national figures more reliable, according to the Bureau of Labor Statistics.
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A Room for Debate forum: If only legal workers picked fruits and vegetables, would consumers tolerate the cost?
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Thoughts on the economic scene.
A few commenters responded to my Sunday column by asking whether consumer spending had really declined all that much. A blog post by Jared Bernstein discusses this issue. The crux of the argument is this chart, showing that consumer spending does not make up a smaller share of gross domestic product than a few years ago:
Bureau of Economic Analysis, via Haver Analytics
There are three reasons, though, why it’s a mistake to read this chart as saying there has not been a consumer bust.
First, consumer spending has retained its G.D.P. share because G.D.P. has done so poorly. It is only marginally higher than it was in late 2007, more than three years ago. Which is to say that consumer spending is only marginally higher than it was three years. As Mr. Bernstein explains, “the fall in consumer spending is proportionate to the decline in G.D.P.” In the more than 60 years that the government has been keeping records, consumer spending has never had a weaker three-year period than in this downturn.
Second, the government’s definition of consumer spending is not the same definition the rest of us would use. The government largely excludes house purchases for consumer spending. If you were to add spending on new homes to the official version of consumer spending — call it “spending by consumers” — the category’s share would be down significantly. The following chart understates the case — because it focuses on spending on newly built homes and misses much of the spending on so-called existing homes, which make up the majority of home sales — but it makes the case nonetheless:
Bureau of Economic Analysis, via Haver Analytics
Third, all of these consumer-spending numbers include staple goods and services that many families cannot go without, like food and health care. Spending on these staples has continued to rise over the last few years. Spending on groceries and utilities have both risen slightly faster than overall consumer spending. Spending on health care services (up 7.9 percent since late 2007, even after adjusting for inflation) and pharmaceuticals (up 5.5 percent) have risen considerably faster, according to data from IHS Global Insight. If you took out these staples and instead focused on discretionary consumer spending, you would see bigger declines still.
In the paper, we reproduced a version of the Federal Reserve Bank of New York’s powerful chart on discretionary service spending, which has dropped more than in any previous recession on record.
Having said all this, I do think the commenters are pointing to something important. Despite the consumer bust, consumer spending — as it’s defined by the government — remains near an all-time high. It also remains much higher than in other rich countries. I’m not sure that will always be the case, which means that the future of consumer spending probably isn’t very bright, either.
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But when the saleswoman rang them up, they were full price. I pointed to the sign. She told me boots were excluded. I told her it didn’t say that anywhere and asked for the manager. The manager told me that “some signs” indicated the exclusion, but that didn’t seem to be true.
We were at an impasse. I could have walked away, but I wanted the boots and they were still a good price. I bought them, but filed an online complaint form with the store.
As often happens, though, I wondered if this was just an annoying incident or actually illegal? What do consumer laws require and what don’t they?
It’s surprising what a thicket of laws and regulations are out there and how difficult it can be to determine what agency has jurisdiction over what product or service.
I thought I could sort it all out but I quickly realized that I would need to write a thesis rather than a column if I wanted to cover all the laws. So I decided to focus on some of the ones consumers might most need to know.
First, there’s the concept of the implied warranty. Yes, we all know that any major appliance or product is going to fail days after the manufacturer’s warranty runs out. But apparently, that’s not the end of the story.
Have you heard about the concept of “implied warranty of merchantability?” It is part of the Uniform Commercial Code, first published in 1952.
That means, said Anthony Giorgianni, associate finance editor for Consumer Reports Money Adviser, that when a retailer sells you something, it is giving you an unwritten assurance that the item being sold will perform how it is supposed to for a reasonable period of time. This implied warranty overrides any return policy or limitations in the manufacturer’s warranty.
All states have adopted, in some form or another, this provision of the Uniform Commercial Code or similar legislation, he said.
Now, that doesn’t mean a product is supposed to last forever.
“Most states assume four years is a reasonable amount of time,” Mr. Giorgianni said. The only way to escape the implied warranty is to post in a visible place that a product is being sold “as is” or “with all faults.” Some states, however, prohibit retailers from using such disclaimers.
There is also the “implied warranty of fitness for a particular purpose,” which means that if you bought something that you were told would serve your needs — like a washing machine that is supposed to handle 15 pounds of laundry but, as you later find out, won’t wash more than 10 pounds — you can request a refund or replacement, Mr. Giorgianni said.
And remember that while implied warranties and unwritten assurances may be on your side, it’s always best to get a retailer’s assurances in writing.
This is all fine and good, but it’s hard for me to imagine going into a retailer with, say, a digital camera that has failed to work, and arguing that it should be replaced under an implied warranty.
Or rather, it’s easy to imagine me doing it. It’s hard to imagine the salesperson willingly handing over a new camera.
Well, Mr. Giorgianni said, it can actually work.
“I walked into Wal-Mart with a broken cordless telephone after the 90-day return policy,” he said. “I asked for the manager and said it’s not reasonable that a cordless phone should break down after 90 days. I think I even had a copy of the Connecticut Uniform Commercial Code I used to carry in my wallet.
“The guy had no idea what I was talking about, but told me to get another one.”
E-mail: shortcuts@nytimes.com
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