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Best Practice Makes Perfect

A collaboration with Domino developers about how to do it and how to get it right in Domino

Just by coincidence, recently I've run into a few different examples of organizations giving me a reason to not do what you'd think they'd want me to do. For instance:

  • The federal government charges people money to file their tax forms electronically. You've gotta figure it costs the IRS a lot more to process a mailed-in return, which requires an IRS staffer to re-key the information into their computer (or at the least, check an OCRed record for errors). They want to charge me, what, $15, to save them a bunch of work? I should get an e-filing credit, instead.
  • My cell phone company charges $.20 per text message (and some similarly outrageous amount for internet access), even though the bandwidth requirements of a text message are several orders of magnitude less than a phone call.
  • My bank charges a monthly fee to do electronic bill payment, even though it costs them less to process such a payment than to process a check. Ditto transferring money electronically to another institution.
  • I get various bills every month, and many encourage me to sign up for their "convenient" electronic statements. They're not convenient for me, because my wife insists on keeping a paper copy (what are we supposed to do if we switch providers? Go on their website and print out every past statement before they close our account? How far back do they keep them?). So I would just have to print them out anyway, at a cost of roughly $.07/page and a minute or so of my time. I save time and money by letting them mail me paper statements. It must cost at least $1 to print and mail a bill, so where's my e-billing discount? (One company did offer a one-time $5 credit for switching to electronic statements, but that's not enough -- especially considering their statements tend to be 15 pages long).
  • Electronic payment of those same bills. This is one case where it really is more convenient for me, and saves me time and postage, so I don't need an extra incentive to do it. Of course, given the choice to use a credit card, I do that rather than authorizing them to grab the money from my bank account -- because my credit card gives me some piddling percentage rebate, and in case of a dispute they have a sensible process for challenging a transaction. But the credit payment must surely cost the company more than the bank account transfer. So, where's my bank account transfer discount?
  • Media mail. Who wants to send media through the post without an attached note, invoice, what have you? Yet, the post office declares that a book with a note tucked inside costs several dollars more to send than a book with no note. It costs less to send a separate letter explaining the book -- or to put the note or invoice in anyway and lie about it. Assuming a law-abiding customer, the P.O. doesn't make $.15 profit on a first-class letter. So why not raise the media mail rate $.15 and remove the restriction on additional enclosed papers? The P.O. would make more money and customers would either save money, or cease to feel a need to break the law. The fewer stupid laws you can have, the better; they encourage lawlessness by leading people to believe that other laws are probably equally stupid, if the reason for them is not obvious.
  • Speaking of the post office, there has been this practice for many years of periodically raising the price of postage and requiring everyone to buy sheets of one and two-cent stamps to make up the difference with any old postage they haven't used. It seems like they might finally have gotten the idea that it would make sense to sell a first-class letter stamp, valid forever despite any price increases. Because really, how much does it cost to print a two-cent stamp? Round about two cents, I would think, if not more, on that nice glossy paper with the peel-off wax paper backing. Of course people would stock up just before a price increase -- which gives a nice cash infusion just when the P.O. needs it (why did they raise the price? Because their costs had been going up, so the cash reserves are low). And people would take a long while to use up their hoarded stamps. Say it takes them two years to use them up -- that's (on average per stamp) a year's worth of interest-free loan they have made to the P.O. Worth 4% at least, I would think.
I assume there are reasons for all these things. In the case of the government, the perverse incentives are built into the system, because managers of government departments are rewarded for hiring more people and spending more money. In other cases, where it really is more convenient to the customer to do it the way that's more convenient for the company, I suppose companies charge more because they can get away with it; but it's surprising to me how long they are able to get away with it. Haven't they got enough competitors who can steal away their customers by offering the same "service" free? In the case of utilities, I suppose not, but you would think cell phone companies and banks compete enough for someone to get the idea. It's a mystery

Andre Guirard | 18 March 2008 04:37:00 AM ET | Home, Plymouth, MN, USA | Comments (8)

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