One Surefire Way to Make Your Complaint Heard

AngryCustomer service, it seems, isn’t a priority for most companies these days.

Whether it’s restaurants denying entry to veterans who require the assistance of a service dog or CVS signing people up for prescription refills without their consent and billing them for it, many companies seem to have lost their focus on the customer.

There’s even a popular website devoted to exposing customer service horror stories.

In the old days, if you had a problem with a company you did one of two things. You either sent them a letter or you set aside a large block of time on Saturday morning to navigate the company’s phone tree in hopes of reaching someone who cared. Your chances of success with these methods were pretty slim.

Thanks to social media, there’s a new way to be heard. Companies are waking up to the fact that if gone untreated, customer complaints on Facebook and Twitter can spread like wildfire.

Many of the biggest ones are spending heavily on their social media presence. I read in the WSJ that two years ago, GM had no strategy for monitoring complaints on social media. Today they have 30 people doing just that.

The power of social media is that anybody can be heard. Sure, some people use this power frivolously, like to complain that their parking spot was stolen or to let us know what they had for dinner. But Facebook, Twitter and other sites also provide an outlet that lets us voice our complaints and frustrations about products and services.

It doesn’t matter whether you have one follower or a thousand – social media levels the playing field. In true David vs. Goliath form, you’re able to bring even the biggest companies to their knees.

If you have a beef with a company and they don’t seem to listen, you now have another way to be heard. Look to social media.

It doesn’t matter how large or small the company. Sure, larger companies are more likely to monitor social media for complaints, but no company wants to tarnish its image by allowing complaints about them to linger. Use their fear to your advantage.

Have you engaged a company through social media to solve a problem?

Photo by

More Stores Pushing Loyalty Programs as a Way to Save

Your key ring could soon be very full.

Businesses are hurting. We’re just not spending at the levels we were before the recession started.

Companies large and small have tried luring new customers by offering deals on Groupon and other daily deal websites. These deals have succeeded in getting people in the door, but what they’ve found is that the deals attract mostly bargain hunters and cheapskates. These people come in once for a deal and never return.

Obviously that’s not what retailers want. We know it costs significantly more to attract new customers than to retain current ones. And studies have shown that current customers spend more than new ones. So from the retailer’s point of view, keeping current customers coming back is the gold standard.

This has led businesses to a promotional strategy that’s booming right now: loyalty programs. They come in all shapes and sizes. Among the more popular programs is also one that’s been around for a while: Amazon’s Prime, which offers unlimited free 2-day shipping on most products for $79 a year. Prime’s appeal is that it offers something we all want: free shipping. Amazon has positioned itself as the Walmart of the web with free shipping and good customer service to boot.

Another example is McDonald’s monopoly game. Who doesn’t love Monopoly, right? You go back time and time again, peeling off those little game pieces and filling out your game board. If you’re lucky you’ll win a free Big Mac along the way. I’m not even sure anybody’s ever won the big prize, but that’s beside the point. When businesses make loyalty fun we gladly come back for more.

A final example is the airlines’ frequent flier programs. Many of them have several tiers based on how much you spend each year. The more you spend, the greater your access to benefits like early boarding and plush airport lounges.

Large companies aren’t alone in the game. Over the coming weeks and months you’ll start to see mom-and-pop stores and independent restaurants offering simple loyalty programs to encourage return visits. As an example, a pizza shop might offer a free pizza after you buy seven. You could see spas offering free services after so many visits. These programs will be built to reward existing customers for coming back.

Compare these programs with other types of loyalty I talked about recently: loyalty based on habit or inertia. Your loyalty to a business should be based on how you’re treated and the value you receive.

Some companies actually penalize customers for their loyalty. Among them are cable and cell phone providers, banks, and most auto insurers. They routinely reward new customers with discounts while sticking it to their long-time customers. It’s funny (or sad?) that companies with horrible customer service reputations are most often guilty of this.

Ask yourself why you’re loyal to the companies you do business with. Are you getting a good deal or is inertia at work?

Loyalty programs are a good way for companies to reward repeat customers and maintain their customer base. You benefit too, but only if you’d buy the product or service anyway. If not you’re just throwing money away.

Bottom line: Don’t assume you’ll benefit from loyalty. Use these loyalty programs to sweeten the deal for things you already buy.

Photo by

Is Black Friday Really Cheaper? The Truth About Why We Wait in Lines

It seems Black Friday countdowns start earlier each year. We were barely into October this year and I noticed them cropping up.

For the dedicated bargain hunters among us, the lead up to Black Friday involves making a shopping list, coordinating with others and planning a route. Then, on Thanksgiving night, waiting in lines in the freezing cold.

Last year I participated in the Black Friday mayhem for the first time. I was in the market for a new laptop, and figured Black Friday was the time to strike. The cheapest I could find was at a big box store for $159.

So when Thanksgiving came I grabbed my gloves, hat and scarf and ventured out. I must have been out there two hours, but it felt like five. When they let us in at midnight the real chaos started. Everyone (including me) was sleep deprived and zombie-like. Manners were apparently left at home, as people bumped against each other and ran over anything in the way.

I made my way to the electronics department and stood in yet another line to get my ticket, which would then allow me to claim my laptop. About a half hour after entering the store I had my prize in hand. After waiting in yet another line at the checkout, I made my exit.

Why do millions of Americans put themselves through this every year? I only went to one store, but some people visit several into the wee hours.

It’s all about the deals, right? Well what if I told you that Black Friday isn’t necessarily the best time of year to find bargains?

That’s precisely what the Wall Street Journal found. In their article The Myth of the Black Friday Deal, they explain that most items are cheaper earlier in the shopping season, while some go down in price as you get closer to Christmas Day. Flat screen TVs, jewelry, watches, and toys are cheaper in October, while stuff that didn’t sell well during Black Friday is discounted closer to Christmas. Household items like blenders and mixers are often in the latter category.

Now that we’ve proven good deals aren’t a reason to stand in line, how else might we justify it? Let’s turn to our brains to find the answer.

After our basic needs of food and shelter are met, we aim to be accepted by others. One way we’ve found to do this is to seek social proof: We stand in lines so others will see us standing in lines.

Because consumption is king in our culture, people who consume are “cool”. We believe that others’ opinions of us will be positive if they see us in line to buy the newest iPhone or a 55 inch flat screen.

Aha! Who knew a basic concept of psychology could explain one of our culture’s most popular rituals? MarketWatch calls it “queue chic”, and explains that waiting in line is a shared experience. This fits in with another basic human characteristic: We are social beings. It’s in our nature to associate with others and share our lives with them. In our quest to gain their acceptance, we want to be seen as making the right buying decisions.

So if you’re going shopping on Black Friday to prove how cool you are or to share the experience with others, fine. But if you’re going for the deals, don’t bother. As the Wall Street Journal says, you’re probably wasting your time.

As for my laptop, it turned out to be a dud. It froze up every time I played a video, so I returned it a week later and bought an iPad instead. Last year’s Black Friday excursion will be my one and only.

Are you going Black Friday shopping this year?

Photo by

How Retailers Get You to Keep Spending

It’s summer – a time when many of us spend our money on cookouts, swimwear and gas for road trips. But this isn’t all we’re buying. Retailers in more industries are coming up with new ways to get you in the door and keep you coming back.

Take Amazon. Their Subscribe and Save program offers lower prices on a wide variety of goods, which show up at your door at scheduled intervals. They hope these low prices will entice you to sign up to receive products regularly. Then there’s Amazon Prime. For $79 a year you get unlimited free 2-day shipping on most items on their site. Studies have shown that people buy more if free shipping is offered. But for that $79 up front, you start to feel obligated to shop at Amazon more often than you normally would. Finally, their Kindle Fire tablet, which came out in late 2011, hooks you in by encouraging you to download e-books and songs from their online catalog.

Offering the original product at a discount or even free is another way retailers get you into their ecosystem. Printers and razors are two examples.

Manufacturers sell printers at rock bottom prices, often as low as $30, and force you to buy expensive ink refills that cost as much as the original printer. Since all printer cartridges are different, your only option is to buy that manufacturer’s refills. Thus, you’re forced to pay their inflated prices for years and years anytime you run out of ink.

Then there are razors. Companies like Gillette often give away razors for free on college campuses. Then they turn around and sell four-packs of razor heads for about $18. This works out to $4.50 for 3 weeks of shaving. What a ripoff! But I’ll let you in on a little secret. Razor blades are stainless steel. If you take care of them they’ll last for a year or more. In fact, I’ve been using the same razor for 30 months and counting!

Taking care of a razor blade means rinsing it out well, drying it completely and occasionally sharpening it. The best way to sharpen it is to use the inside of your forearm. After every 5 shaves or so, push the razor from your elbow area to your wrist. Your skin acts like leather, and is great for sharpening razor blades.

Retailers use all sorts of strategies to keep you coming back for more. Be aware of this next time you get that screaming deal!

Can you think of any other companies that use this strategy to keep you coming back?

How the Crisis in Europe Affects Your Wallet

Europe is in crisis mode, and nobody seems to care.

Several countries have borrowed and spent much more than they’re able to pay back. Central among them in Greece, which is in danger of pulling out of Europe’s common currency, the Euro.

Greece badly needs a bailout, but European leaders sharply disagree about the best path forward. On one side is Germany, Europe’s bankroller, who swears by the austerity measures they’ve implemented in their own country since the recession began 5 years ago. On the other side is a growing number of leaders from other countries, who believe it’s time for a different solution to the region’s troubles.

But why does this matter to us here in North America? Aren’t they across the big pond, thousands of miles away?

Here’s something you may not have considered. Europe accounts for 21% of all US exports, according to the Office of the US Trade Representative. That means over one fifth of all goods and services produced in this country are purchased by someone in Europe. If European countries and citizens are faced with austerity, do you think they’ll continue to purchase at the same pace as they always have?

A slowdown in Europe directly affects our economic situation here. With Europe buying less, companies have less need for labor, so they don’t require as many employees. Up goes our unemployment rate. Investors lose confidence that Europe will be able to cover their obligations, so stocks move lower. Down goes your 401(k) balance.

All of this causes us to consume less here, which slows down economic activity, prolongs the recession and gives companies even less incentive to hire new employees.

Another interesting trend is that policymakers have become the primary market influencers. Investors are now reacting to their perceptions of policy changes rather than economic data like retail sales and corporate profits. Because governments around the world have intervened to such an extent in the financial markets, the economy is now more dependent than ever on elected officials.

If you weren’t aware of how intertwined the global economy is, you should be now. As nice as it might be, you can’t control what goes on in other countries. Heck, we can’t even control what happens in our own country. But there are some things you can do in your own life to help you ride out these difficult and uncertain times.

Reduce the amount of debt you carry. Debt is a chainsaw to your finances. It cripples your financial health, giving your little margin for error. It requires a portion of your resources every month and gives you nothing in return. It adds pressure to meet obligations and stress and heartache when you come up short. Do everything you can to eliminate the amount of debt in your life.

Build an emergency fund. I’ve written about this several times on this blog. You need a pile of cash (preferably not stashed in the freezer) that you can rely on in a pinch. Start with $1,000 in an online savings account. Then build it to one month of living expenses, then two months and so on. This is your insulation against the bumps in life.

Watch your spending. You can make a budget, track every penny that you spend, or even put your credit cards in a block of ice. Whatever works for you. The point is to think about each purchase and how it makes your life better.

Save for your future. If your employer offers a 401(k) with a match, you have no excuses about why you’re not participating. Contribute up to the match and put the rest into a Roth IRA. Even with the markets on a roller coaster, your best chance of beating inflation is a diversified, low-cost portfolio of stocks and bonds. My favorite are the target-date funds. If you’re not sure how much you should be saving, see this post.

Who knows what will happen in Europe. But one thing is certain – it’s time to get back to basics. Following these tips helps you insulate your finances from the drama that’s playing out in Europe.

Are you worried about the crisis in Europe? What are you doing to protect your finances?

Photo by

Do You Put Spare Cash in the Freezer?

Since the recession began several years ago, our distrust of the banks has continued to grow. Questionable practices like making sub prime loans and an ever-growing list of fees make us wonder whether the banks really have our best interests in mind. Now it’s come to this: many of us are afraid to put our savings in a bank or other financial institution.

According to a new poll, 27% of us stash our extra cash in the freezer. The freezer! This is something I had never considered before. And it goes on – 19% put their cash in the sock drawer, 11% stick it under the mattress and 10% hide it in the cookie jar.

Think about this for a second. If a burglar robbed 4 houses, statistically he or she will find cash hidden in the freezer in one of them. Their chances of finding treasure in the sock drawer or under the mattress when you’re not home are pretty good too.

Keeping large amounts of cash at home isn’t a good idea. For one, it puts you at risk of losing it in a burglary. There’s also a chance you’ll lose track of it or forget about it altogether.

I know that interest rates are puny right now. If you’re lucky you’ll earn 1% on your savings. But sitting there under your mattress, it’s not even earning that.

Most banks and credit unions are insured by the FDIC and NCUA, respectively, for deposits up to $250,000 per account. That means if the bank goes under you won’t lose your money. Even at the low interest rates we have today, your money is much safer on deposit at the bank.

That’s fine if you’ve become disillusioned by the biggest banks. There are many other options out there such regional banks, credit unions and even online banks. You’ll often get better rates and customer service at local or online banks.

Finally, if you won’t need the money for 10 years or longer, you need to think about investing it. It’s important to overcome your fear of the market, because investing is the best chance you have to fight against inflation.

What do you think about people who keep cash at home? 

Photo by

Showrooming: The Battle Between Retailers and Your Wallet

I think most of us agree that smartphones improve our lives in many ways. They accommodate our busy schedules and enable us to do things on the go that wouldn’t have been possible a decade ago. But for retailers, these devices haven’t exactly been a boon.

Online shopping accounts for 8% of total retail spending, up from 2% just 12 years ago. Even though the majority of spending is still done at physical stores, retailers can’t just sit back and enjoy their success. Instead, they’re forced to develop creative ways to compete against booming online competition, which can offer better prices because of lower costs.

What is showrooming?

Retailers in all industries are facing a new challenge known as showrooming. This is when a customer walks into the store to look at an item, check the price and perhaps test it out, only to ultimately buy it elsewhere. Customers often use a price comparison app on their smartphones to help with the process (my favorite is ShopSavvy.) After scanning the bar code, you’re able to see who else is offering the product and what their price is. Often you can even order the product through the app, right there on your phone.

As you can imagine, this isn’t sitting well with retailers. Before smartphones, consumers had to rely on research they had done prior to entering the store. If they hadn’t done any research they were forced to rely on information provided by the retailer.

Retailers wake up

Smartphones have driven a transformation in the way consumers buy products. They allow us to comparison shop on the spot, giving us valuable information when and where we need it. Using a smartphone, we’re able to look up product reviews and ratings, right there in the aisle.

All of this information makes retailers nervous. They’re starting to realize that we’re becoming more savvy and they’re responding in one of two ways. Some, like Target, are asking manufacturers to come up with unique product numbers for their items so that when a customer scans the bar code it won’t come up anywhere else. They might also change the name of the product.

Other retailers, like Best Buy, claim to offer superior customer service and employee knowledge to differentiate themselves. Whichever strategy retailers use, their goal is the same: to limit comparison shopping. So how can you as the consumer fight back?

Your sword and shield

First, understand which features you need in a product. If you’re buying a window air conditioner, how many BTUs do you need? Do you want an automatic timer or a remote control? Knowing what you’re looking for allows you to look past cutesy product names and focus on the benefits of the products you are comparing.

Next, do some research ahead of time. Are there retailers that might offer a similar product, or the same product by a different name? How do online prices compare to store prices? Having a general idea of price range and availability will benefit you once you’re in the store.

Finally, if you’re not getting any results after scanning the product’s bar code, try a Google search. For example, if you’re at Finish Line looking at running shoes, type in “Finish Line” and the description of the shoe. You might find the same product listed under a different name at other retailers or online.


Using a price comparison app is one of the best ways to get a great deal. Now that retailers are at battle with us to limit our ability to comparison shop, we can’t rely on these apps alone. Add the strategies mentioned above to your arsenal as you’re searching for the best price.

Have you successfully used a smartphone app to find a better price?

Photo by