The consumer vitriol, which cascaded across Twitter and onto blogs and petitions all around the Web, struck a chord with a company that was clearly not expecting it.
“The company made the decision in response to customer feedback about the plan, which was designed to improve the efficiency of those transactions,” Verizon Wireless said in a statement referring to the reversal.
That a company with revenue of $15 billion in the most recent quarter would have to quickly change course over such a small fee suggests something particular about its business and others like it.
Similar to fee-bedeviled airline passengers with little choice on many nonstop flights, or bank customers who do not want to spend hours untangling automated payments so they can switch institutions, Verizon Wireless customers have limited options because they are locked into multiyear contracts. And they apparently did not like being told that it would cost money to pay money to the company.
The consumer outcry may also reflect the national mood — and some companies’ misreading of it, according to some analysts.
“I just think people are sick of being nickeled and dimed by big companies,” said Edgar Dworsky, founder of ConsumerWorld.org. “And it’s just baffling to me why a company like Verizon Wireless or Bank of America doesn’t do market testing on something like this first. It doesn’t take a genius to figure out that there is going to be a backlash.”
What was surprising about the Verizon Wireless rollback was how quickly it occurred. It took consumers about a month to persuade Bank of America to rescind its plan to charge a $5 monthly fee to people who used their debit card for purchases.
But with Verizon Wireless, the corporate change of heart took only a day, even though it is the week after Christmas when companies often drop bad news in the hope that fewer people are paying attention.
“The multiplication effect with things like Twitter is incredible,” said Ron Shevlin, senior analyst at the Aite Group in Boston. “And because of the national mood, it hits the boiling point really quickly.”
Verizon Wireless may also been have moved to change its mind when the Federal Communications Commission put out word earlier Friday that it thought the company’s actions merited closer scrutiny.
If the company had taken a different tack, it might have succeeded in convincing consumers that some kind of fee increase was necessary, Mr. Shevlin said.
“The easy thing would have been to be more explicit about what the costs were that were causing it to add this fee,” he said.
The company, for instance, might have explained how few people were going to pay the fee, which was supposed to be for one-time credit or debit card payments by phone or on the company’s Web site. It also could have explained how much higher the costs were, on a percentage basis, to accept payments in that way, versus regular, monthly credit card billing, which would have remained free.
Verizon Wireless declined a request for much of this information on Thursday and did not respond to follow-up requests on Friday.
Mr. Shevlin also said that Verizon Wireless, like Bank of America before it, said it was responding to customer feedback. But both companies seemed to have missed the opportunity to get accurate feedback before putting the fees in place.
“Why not post it on your Facebook page?” he said. “Maybe the feedback would have been just as bad, but then you’re seen as heroes for listening to feedback ahead of time. These firms are not reading the mood or living in the real world.”
Mr. Dworsky is on Verizon’s consumer advisory panel (and did not know about the fee ahead of time). But he said he chose to speak out about the move anyway, saying that he had a bigger concern about what the Wireless unit’s failed move portends.
“Who is going to try to tack on a fee next for using a credit card?” he said. “Is it the local grocery store? A department store? That is the bigger worry.”
Mr. Dworsky, a former assistant attorney general for consumer protection in Massachusetts, spent Friday morning reading credit card merchant agreements and various federal regulations in the hope that the proposed surcharge was actually against the rules.
“I’m glad this got killed in its infancy,” he said. “But I don’t think we’ve seen the end of it. Hopefully, the collective consumer voice will be able to change the next company’s planned fee.”
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