This entry was posted on Sunday, June 14th, 2009 at 9:16 am and is filed under Revenue Assurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Going over my mail I came across a letter from my bank, notifying me that due to some technical problem, they undercharged me last month.
So far so good. We all know that mistakes happen, so no biggie.
The sum of the undercharge was less than 1 US cent. That’s right. I meant 0.01 Dollars.
I was a bit surprised to find out that this particular letter was sent to my old address, mainly due to the fact that I’ve lived at my current address for the past eight years and until now, have received all correspondence from the bank at this address.
In the letter, they asked me to call their call center if I have any questions, or comments; of course I had some: what was the error? Why were they using an old address? Please update my address, etc.
I was wondering how much it cost them to correct the 1 cent error.
They probably had to invest resources in discovering the cause of the error, correcting it in their systems, pay for printing the letter, as well as pay for mail delivery and waste call center resources. And of course they have managed to harm their customer satisfaction (which of course has a dollar value)- did I forget anything? Certainly you could claim that it would have been better to waive the charge, but it has its cost too, costs that might be even greater than the costs of claiming it. The amount of under-charge might be high for some of the customers; therefore the bank needs to change some of its automatic processes and systems in order to implement the desired business logic. Moreover just waiving debts will require updating financial reporting, which also has it costs.
This makes a good example in favor of proactive approach to prevent errors. It clarifies that the recovery costs might be significant and sometimes unavoidable. Once you’ve made an error, you incur costs whether you correct it or not.
Certainly, none of this is relevant to the typical readers of this blog. This kind of things happens in banks, but we all know that in a CSP such things simply could not happen. So please forget about this post. I apologize for sharing irrelevant personal anecdotes.