Saturday, October 1, 2011

B of A's Brand Deduction

When I heard that Bank of America was going to start charging customers a $5 monthly fee to use their debit cards for purchases, I wasn't at all shocked because banks raising fees is about as common as customers stealing their pens. Sadly, it's just the way most banks treat their customers.

My worry is that customers will just pay the fees because they've been conditioned to use their debit cards instead of cash for so long. Soon, the rest of banks will follow suit and it won't effect anyone's brand because the customer will be stuck. They'll just become resigned to the fact that they hate their bank.

However, I realized that I was thinking like Bank of America - without a long term perspective. While the current population may be conditioned to use their debit cards in stores, additional fees mean that the next generation will be conditioned not to. Eventually, any benefit to their bottom line will be lost.

Furthermore, this isn't a situation like rising oil prices where customers are stranded without any alternatives to debit cards. Credit cards and cash remain popular options.

Shortly after reading that Bank of America was initiating a fee on in-store debit card transactions, I came across an advertisement on television for Bank of America's debit cards. Ironically, it was offering cash back on purchases - one percent back on this and two percent on that - just so you can give it right back.

The Bank of America debit card fee serves as another reminder why customers should break this cycle and only deposit their money with someone who will respect it.

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