A Bad Idea?

This morning, I spent 45 minutes convincing a Verizon support person–via chat–to credit my account for charges I did not authorize. In the end, he issued a $55 credit, up from $11 at the start.

Was it a good idea? Was it worth it?

A new book suggests, “Probably not!” Dollars and Sense: How We Misthink Money and How to Spend Smarter (Harper, 2017) is the latest in a rapid-fire sequence of behavioral economics primers from Dan Ariely, the noted Duke University professor, and Jeff Kreisler. (In 2014, in my State of the CDFI Industry speech in Denver, “Because Equity,” I drew on a conversation I had with Ariely at his home in Durham, NC.)

Dollars and SenseThe authors’ guiding principle is to make spending decisions (including spending time, which is of course money) based on opportunity costs–that is, what else might I have spent my time doing this morning (paid work for clients, sleeping, exercise). “Opportunity costs,” they explain, “are alternatives. They are the things that we give away, nor or later, in order to do something.”

They take a dim view of how most of us make decisions and why.

“We almost always fail to fully appreciate alternatives,” they explain. “And, unfortunately, when we fail to consider these opportunity costs, the odds are that our decisions are not going to be in our best interests.”

I thought about them as I went back-and-forth and round-and-round several times with Alex @ Verizon support. The issue was that Verizon apparently had added $11 monthly charges on two of the phones on my account ($22/month) for the last two months, taking $44 from me that I did not think was okay.

More significant, I knew I had not authorized it. My wife had gone into a Verizon store a couple of months ago to upgrade a failing phone. She called me to ask whether to buy the $11/month insurance the salesperson was hawking. She didn’t think so, and I agreed. She told him, “no.”

Apparently, he heard, “yes.”

Ariely and Kreisler go into more than a little detail about how phone companies (and others) detail charges (so that you see how much you’re getting) but make it simple to pay the bill (so that you experience the “pain” of paying just once). In this case, not only was Verizon kind enough to collect taxes for the state but also the monthly insurance premium for Asurion, a company I had never heard of.

I’m not sure I accept their explanation, for two reasons. First, I would think that very few people actually read the detailed listing of charges. Perhaps behavioral economists explain that what matters is the long, mind-numbing listing of charges that create the perception that I am getting a lot of things for my money; it’s the experience, not the specifics. Could be. Second, the laundry list approach seems to be the thing people complain about most–okay, second-most, after spotty service.

But my failing might not be my unwillingness to accept the behavioral economics facts. It might be that I stayed on the phone so long on principle. It offends me no end when someone takes my money wrongfully, and the amount doesn’t matter. If I think I smell fraud, something in my brain gets over-activated. Arielly and Kreisler tried their best to persuade me not to make money decisions based on principals.

“We punish unfairness, and often ourselves… in the process,” they warn.

I was expecting Alex to do nothing more than to file a complaint in the CRM system he worked with so that perhaps someone somewhere would take note. And if, in fact, there was sales fraud (or something like it)–that is, if a company was falsely generating income at consumer expense–maybe someone would do something about it.

Alex did everything he could to deflect my demands that he bring in his supervisor or a manager. Foolishly, I thought, he dragged the conversation on. (Come to think of it, this could have been a 5-minute waste of time instead of a 45-minute one, but I succumbed to his chatter.) We went over the same material repeatedly while I tried to answer some emails.

Most significant, it seemed to me, he would not respond directly to my request that he contact someone with more authority. The more he put me off, the more I suspected something was amiss. Does he get demerits if he has to involve a supervisor?, I wondered. Does the company give incentives for deflecting complaints?

After 30 minutes of frustration, I got bolder in my suspicions. I suggested I might post something on Facebook about the un-justified charges to see if others had similar experiences. That probably wouldn’t result in much, of course, because who reads the detailed charges in their phone bills?

After about his 15th apology that he couldn’t do more to help me and to restore my confidence in Verizon, I grew impatient. And I struggled to understand why he was wasting so much time feebly trying to soothe my discontent. I explained testily that I appreciated him crediting me $55 for the charges ($44 for the charges and $11 for my trouble–and time!), I was wary that the charges seemed to maybe possibly be fraudulent.

Words matter (another point that Ariely and Kreisler make emphatically).

Oh, Alex wrote back directly, if you think there might be fraud I will file a fraud report with Verizon’s fraud team and they will investigate within 48 hours and respond to you. Alex wasn’t wasting my time after all; he was stringing the conversation along so that he could initiate a fraud report. If only I had said the magic word sooner.

We wrapped up our chat quickly and pleasantly. I tried to express my appreciation for Alex’s efforts.

Will this uncover fraud? Probably not. Will it prompt a “60 Minutes” investigation? Certainly not. Will it make a financial difference to me? No. To the salesperson? Probably not.

Did it prove Ariely and Kreisler right? I don’t know. Wrong? I don’t think so.

If anything, it made me feel better that I persisted. Because, Ariely and Kreisler point out, it’s not really about the money. “Money makes everyone do crazy things,” they observe. They also note, helpfully, that our “financial lives” are not the same things as our “lives.” Money can be a means to an end. Where will we get if we spend all our time fighting over $11/month?

This morning, I got a little smarter (thank you, Alex) and a little satisfaction.I still do not understand much about behavioral economics, but I had a heuristic morning. In opportunity cost terms, I guess I made a good choice.



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