Mega-bank and credit card issuer JPMorgan Chase & Co. has
decided to stop charging certain monthly fees. And they’ve agreed to
refund $4.4 million in fees they have collected in the past several
months. The impetus behind the move was a barrage of negative customer
feedback that eventually led to the New York attorney general’s
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.