You Charge HOW Much?

There has been some "press" lately about what financial institutions charge for their services. Some reporters, after being contacted by consumer activist groups, have written about what "actual" cost is to return a check, or to maintain an account, and have shed soulful tears about how much profit is being made instead of just charging cost.

None of these self-proclaimed market and pricing experts has taken into consideration that those same financial institutions are providing a living for the people who furnish those services, and paying shareholders dividends. Nor have any of them mentioned the overhead of buildings, equipment, maintenance, etc. And not a word in any of their reporting talks about senior citizen free services, or government check cashing, or loan or fraud losses.

As usual the big, bad bank, perceived to be making all those millions of dollars in profit by "ripping off" the little guy, has made an obvious target.

Have you seen any similar articles about other industries?
Hot dogs-50 cents or $2.75?

There is a convenience store in our town that sells two hot dogs and a 16 oz. drink for 99 cents. The last time I bought a hot dog (one) in an airport, it cost me $2.75. No drink included! How come airport food prices don't bother reporters?

"We'll leave the light on..."
Consider the hotel industry. I managed to find a clean room and a decent bed in a hotel in the midwest for the unheard of price of $19.00-and had cable TV and free coffee to boot! It was quiet and the people were friendly and conversational.

On the other hand, I've stayed in a five star hotel that charges as much as $300 a night. I had cable TV, but I had to buy my coffee from the in-room snack cabinet and it was noisy until almost 2 a.m. The only person who spoke to me was the desk clerk when I checked in and out. ("Want'a just leave that on your card?")

Now, unless you plan on camping out in the room, a night's sleep is a night's sleep. Has anyone talked about the price of that except the guy who does the "we'll-leave-the-light-on-for-you" commercials?

Run faster, jump higher?
Bought sneakers lately? What makes some brands worth $200 a pair? Do they wear longer? Or are we just conditioned to know that we have to pay that much to really appreciate the name on the heel?

Baseball & apple pie
No, you don't hear about unfair costs of food in airports, or rates in hotels or mark-ups on sneakers. But just let a financial institution raise the cost of overdrawing your account (which is the same as an uncollateralized, short term loan) to $30 and it'll make headlines from some self-appointed consumer-protecting reporter. It's sort of like baseball and apple pie. Going after the big, bad, profit making financial institution is considered to be good sport.

Ah, well, you folks in marketing, keep on doing all those analyses and studies. And we'll wish for you something like a reconciliation of Charles and Diana the same day you announce your new fee schedules! That way maybe you won't make the front page.

Copyright © 1994 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 4, No. 11, 6/94