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Death to Frank-Skinner, Father of the Convenience Charge

December 30, 2011

I happen to be a Verizon Wireless customer, and I happen to usually make a one-time payment each month on my credit card (to take advantage of cash back and to keep potential billing errors away from my bank account). The fee that VZW recently proposed, which was quickly eviscerated by angry consumers, would have directly affected me.

The fact is that charging a fee for using a credit card is the norm. Card servicers charge an “interchange fee” of around 2% on each transaction, so it makes sense that businesses will try to recoup the expense. Believe it or not, I didn’t have much of a problem with VZW’s plan to implement this fee. Naturally, I’d prefer if they didn’t, but I understand how interchange fees work, and it doesn’t seem especially unfair to try to offset the loss in some way.

For a transaction the size of a phone bill, $2 is pretty mild, as these things go. Some merchants add as much as 4–5% to the transaction amount for customers who opt to pay with a card, and that trend is continually growing. Note that I said transaction amount and not purchase price. That percent is an increase over the total bill, including any taxes, shipping costs, or anything else. It’s a monster of a fee, as is the interchange fee that sired it.

In that light, $2 flat is actually a bit of a deal. Assuming a 2% interchange fee, if the bill being paid is for more than $100, the customer is paying less than the interchange fee, and VZW is absorbing the difference. Even for smaller bills, it’s not significantly greater than the interchange fee.

Clearly, though, there is a problem afoot, but the problem isn’t the amount of the fee. It’s not that the fee is being applied to a specific class of payments either. As I’ve noted, the fee itself is remarkably tame compared to business practices that consumers widely tolerate with little objection. The problem is something else entirely, and it is a two-headed beast.

The first head is named Frank. Frank has a forked tongue and is a master of semantics. His job is to invent catchy, agreeable-sounding phrases to lull consumers into a false sense of understanding. Frank’s talent can be boiled down to a four-step process:

  1. He starts by describing the nature of the idea in question—in this case, Penalty to Offset Interchange Fees and Drive Customers into Recurring Payments.
  2. Next, he strips the phrase down to its core noun, in this case, Penalty. By starting with the core noun, Frank ensures that his output will still have a quasi-honest connection to the original idea.
  3. He then “spins” the core noun into a more amicable synonym. No one wants to be friends with a Penalty, but a Charge sounds more neutral, and it lacks the psychological sting of Penalty. Monosyllabic words are preferred (e.g., fee, fine, tax).
  4. Finally, he adds an adjective (or adjectival phrase) that has a positive connotation, like Convenience. For this part, multiple syllables are a must, and alliteration and assonance are always welcome. This adjective serves to front-load the phrase with a word that is longer and “happier” than the noun. When possible, the gerund form is used to add that extra syllable (e.g., servicing, restocking, shipping and handling).

To say the phrase Convenience Charge, a person has to spend three syllables saying a positive adjective before using only one syllable for a watered-down form of the original idea. After quickly reading the phrase once, it’s hard to make heads or tails of what it means, except that it sounds reasonable and has something to do with convenience. The same kind of method can be used for many purposes, including giving horrible names to good or neutral things. Frank is brilliant like that.

The beast’s other head is named Skinner, after the famous psychologist Burrhus Frederic Skinner. His claim to fame is a talent for manipulating people’s behavior by adjusting their surroundings. He is the Drive Customers into Recurring Payments part of the deal. If you’ve never noticed Skinner’s work before, that was the point. You’re not supposed to notice it. You’re supposed to navigate the ever-changing maze until you find the surcharge-free cheese.

The Frank-Skinner beast represents the major problem underlying VZW’s proposal. The problem neither begins nor ends with a $2 fee; it has been an ongoing process of which people have gradually become aware. The trick is fading.

More and more, consumers cringe at a phrase like Convenience Charge because, at a minimum, they subconsciously know that someone is trying to use it to deceive them. When they read about the trend the fee will create—redirecting customers to sign up for recurring payments—they know it is a goal of the new policy, and the fee is a sort of fence to corral people toward the goal.

People are getting fed up with being tricked, fenced-in, coddled, milked, and otherwise treated like cattle. Despite an insistence in popular entertainment that people are generally morons, the human brain is a very powerful instrument. Even in the least educated, least skilled people, it is able to recognize patterns like repeated attempts at deception and manipulation.

What we have seen these past few days has not just been a backlash against a proposed fee. It has been a backlash against the practices instituted to get the public to accept the fee. It has been a call for the heads of Frank-Skinner to roll.

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