The decision was made after many customers complained about the fees. Some felt the fees were a “bait and switch” tactic. No doubt the bank saw them as a profitable new source of revenue that appeared to have few costs associated with it. It seems they were wrong.
This bank got burned by Toxic Revenue.
I won’t comment on whether the bank’s fees were justified or not. But I would suggest they were not-very well thought out. The fact that they are making refunds says this became a hot issue. It also says someone at JPMorgan Chase felt it would be less costly to give up millions of dollars in these fees rather than deal with the fallout.
Customer-serving policies typically to do not produce these results. But policies and actions that exist to create revenue without offering any value to customers could easily yield a situation like this. Their customers felt ripped off. And they did something about it. They let the bank know. And that is entirely appropriate. This feedback, while sometimes painful, offers a valuable lesson to the honchos at this bank.
Any time you seek to generate revenue, put yourself in your customer’s shoes. How would you feel if you were the person writing the check? Does the situation seem fair? Does it seem reasonable? Or do you feel taken advantage of?
If you try to see things from your customer’s perspective you’ll have better information so you can make better decisions. If you maintain persistent communications with your customers and act with the intent to serve them (not take their money) you’ll position yourself to work with them, not against them. That will make your business healthier and more sustainable in the long run.
Have you had this happen to you? As a customer, have you been a victim of Toxic Revenue? (Toxic Revenue is when a company charges you money and you get no value in exchange. See this article for examples.) Please share your thoughts or experiences using the form below.