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Why Opt-Out Policies are a Bad Idea

January 21st, 2008 · 1 Comment

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Photo Credits: linnybinnypix

Last weekend I rented a car for a day. I stopped to have a cup of coffee and, fiddling with my rental papers I noticed a blue sticky note attached to the envelope with something written on it. It was a disclaimer that said something like this:

If you drive less than 75 miles, don’t re-fuel your tank. A $10.50 EZ fuel service charge will automatically be added to your bill. If you decide to fill up your tank, simply bring your receipt and the charge will be reversed.

I ended up driving more than 75 miles so this never became an issue. However, when I returned home I did some research on the charge, which I found odd and lopsided in favor of the rental car company.

I found out that back in November 2007, the company had settled a class action suit brought against it by customers who returned the car with the gas tank full, who argued that the charge was not properly disclosed. The disclosure issue has now been addressed by the sticky note I mentioned before, so the charge is now “legal”.

There is, however, a marketing angle to this story, which I would like to explore today.

Basically, by requiring customers to opt-out of the charge instead of asking them if they want to sign-up for it, the rental car company is creating an unnecessary burden on customers. How?:

  1. They are forcing them to read the documentation. People in general hate to read manuals and legal disclosures.
  2. They are forcing the customer to remember to ask for a gas receipt and then be organized enough not to lose it.
  3. Finally, they are forcing you to produce the receipt upon the car’s return (when your mind is usually focused on more important things, like not losing your belongings, finding your ticket and passport, and catching your plane on time).

It just happens that these “convenience” charges are almost always levied for the convenience of the company, not the customer.

How would I have handled it?

If I were in charge ;) this is how the customer experience would have gone:

Rental Agent: Hello Sir/Madam. Let me tell you about about our EZ fuel service option: if you drive less than 75 miles and don’t want to refill your tank, you can just bring the car back and we will add $10.50 to your bill. Is that something you would be interested in?

Customer One: Hmmm, let’s see. I’m going to rent a Jeep Commander that gives me 15 miles per gallon, and I’ll probably drive around 70 miles. That’s about $14 in fuel , so, yeah… sign me up, that’ll save me some money and a trip to the gas station.

Or,

Customer Two: That Hyundai that I’m renting today gives me around 25 miles per gallon and I’m probably only going to drive 50 miles. Hmm, I guess I’ll pass. No, thanks.

See the difference? No surprises, no gimmicks, and the customer decides.

The problem with opt-out policies is that they require customers to take action where no action should be needed. After all, why should you be forced to get out of something you didn’t request in the first place? It’s the same kind of feeling as when when you receive unsolicited email or telemarketer calls.

Arbitrary opt-out policies upset customers, create unnecessary friction and ultimately undermine the bond of trust that should exist between a brand and its customers. Asking for permission first is always the best policy.

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Tags: Customer Service · Branding

1 response so far ↓

  • 1 Brian Monahan // Feb 18, 2008 at 11:31 pm

    What can I say about car rental companies. Basically all of there pricing is set up as a scam. Clear pricing and value is always the best long term solution.

    Recently when trying to rent a car (unreserved in advance) at an airport I was told the only option was a luxury car at a ridiculous price. I called their 1-800 number and reserved the car via phone at a cheaper price and picked up the car 5 minutes later.

    So what was the difference?

    Basically extortion. When I called they did not realize I was already in the airport and been given a bogus line about only having luxury cars available. I mentioned this to the attendant as being cheesy. He said I was lucky that soon all pricing would be fixed and non negotiable.

    I am sure they will find a way to manipulate this new system as well.

    I just don’t understand how companies can survive with ridiculous pricing schemes which are basically scams. It would seem people would do business with companies that are upfront and honest.

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