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Delta Charges Cents. Delta Pays Cents. This Makes No Sense...

Delta Charges Cents. Delta Pays Cents. This Makes No Sense...

 
Old Jan 29, 05, 6:03 am
  #61  
 
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I can beat 10 cents. I have an upcoming flight ATL-PBI purchased in "A" before the new Simplifares were introduced.

I called DL to change my flight and the price difference was one cent. I could not believe that DL was going to collect one penny from me, but they did.

Dan
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Old Jan 29, 05, 6:35 am
  #62  
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Costs outweigh benefits

The transaction costs associated with processing a charge of a dime, or worse yet, a penny, are more than the revenue that they are generating. Unfortunately, DL's computer systems don't have this logic programmed in.

If you really want to make your point about the cost/benefit while you were on the phone with SMS, you could have asked them to send you a new receipt via snail mail.
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Old Jan 29, 05, 8:26 am
  #63  
 
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Originally Posted by vinnmann
A WORD OF WARNING TO CONSUMERS: Do not do business with Provident Bank of Ohio. I had my mortgage with them, and when I made the final payment, I overpaid by $0.24. They refused to refund me the $0.24 indicating that they only do refunds for amounts greater than $1.00. I feel ripped off and cheated. Can someone please get me the number to the Better Business Bureau, and a good attorney (btw good attorney=oxymoron).
While OT, this is often common procedure with banks when it comes to loan payoffs. At the same time (with most banks), if you were 24 cents short on your payoff, that would slide too and you would be paid in full, and your mortgage would be released. It goes both ways, typically upto a certain dollar amount -- but really depends on the financial institution.

Not to justify the action, banks know it will cost more to send a 24 cent refund, on the other hand, banks also know it will cost more to collect 24 cents underpaid on a mortgage or other loan pay off. However, if a customer was insistent on getting the 24 cents back, the bank employee you dealt with should have discretion with respect to doing so. It may cost the bank a couple of dollars, but if makes the customer happy, do it. Keeping customers happy is important, especially when it comes to return business in a highly competitive market.

Some banks may allow for a $5.00 under/overage at payoff, while others may allow for $10.00 under/overage at payoff. Anything paid over the overage amount will always be refunded, as a general rule, either into a DDA account (if you have one at the institution) or by certified check. As far as payoff's being "under", sometimes there will be even more wiggle room and at a good financial instition, the employees will have the discretion -- say the interest per diem is $22 and the payoff is off by $44 because it arrived two days after the quote expired. In some of these cases, it's cheaper to accept a payoff $44 short than to chase down an extra $44 (which would include phone calls, perhaps long distance charges, the possibility it may upset the customer, and most importantly, the labor costs involved).

That said, I personally feel it's silly DL made the OP pay the additional 10 cents by credit card. If I was the agent, I'd be embarassed to ask for it. If a transaction is going to result in a loss, it is best not to handle the transactions and take the 10 cents to pay the taxes out of a general ledger account (I would assume DL has a waived fees or misc expense GL account or something similar where such funds could be taken from, as other large businesses do).

This sounds like a case of the agent not having any say or discretion with handling matters such as this. Front line employees, IMHO, should have some discretion, if it means saving the company money.

My .10 cents worth

SDF_Traveler
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Old Jan 29, 05, 8:36 am
  #64  
 
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Due to a traffic accident on I-45 I got to the counter Thursday 25 minutes before the flight but was denied a boarding pass since I was checking bags on a flight from IAH through ATL to CMH. Delta rebooked me at no charge on a leter departture but charges me $.40 for the tax difference. I refused to give them a credit card so the counter sales agent noted that the record showed I "owned 4 thin dimes." I gave her 2 quarters and of course she couldn't make change. I told her to credit it to the bottom line and she said she couldn't do that either.
No wonder the airlines are in the shape their in. I think upper management must be all ex-school board members,

Jack

Originally Posted by bdschobel
I had a full-Y ticket on the 3:30 Shuttle from LGA to DCA and needed to change it to the 2:30 Shuttle. I really didn't need to do anything because, after all, it is the Shuttle! And I could always fly standby for free (or same-day confirmed, to be technical about it). But I wanted to check in on-line and wanted my boarding pass to be for the right flight, so I called SMS.

Well, the original ticket was purchased in 2004. Apparently, a new ticket purchased in 2005 has 10 cents higher taxes imposed. The guy asked me how I was going to pay this 10 cents additional cost.

Now, let me be very clear. I can afford to give Delta 10 cents. Really! It usually doesn't come out of my pocket, anyway. But it just seemed to me that collecting 10 cents over the phone, which requires a credit-card charge, had to be more trouble than it's worth for me, Delta and even AMEX. So I innocently asked, "Couldn't you just waive 10 cents?"

You would have thought that I had asked for a free airplane! The guy, apparently horrified, said, "That's a government tax. We have to collect it or we would get fined." Not quite satisfied with that answer, I suggested that Delta could certainly remit the 10 cents to the government, thereby avoiding the dreaded fine, and simply swallow the cost. The guy, clearly not the brightest light, said that it would be illegal for Delta to do that.

In the end, I gave him my AMEX number and let him put through a charge for 10 cents so that I could fly an hour earlier without any hassles at the airport. I will not put that charge on my expense report because I would be too embarrassed.

Bruce
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Old Jan 29, 05, 11:25 am
  #65  
 
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Originally Posted by NYBanker
The transaction costs associated with processing a charge of a dime, or worse yet, a penny, are more than the revenue that they are generating. Unfortunately, DL's computer systems don't have this logic programmed in.

If you really want to make your point about the cost/benefit while you were on the phone with SMS, you could have asked them to send you a new receipt via snail mail.
You are missing part of the cost/benefit analysis equation. There is also the cost of reprogramming systems to accommodate these fare-collect overrides. This is a one-time expense (labor) incurred now. Such a cost might be repeated at some point in the future when systems are overhauled.

As most here are focusing on, you also have:
In the future, a (presumably) recurring stream of waived fee expenses, as well as the recurring stream of avoided costs associated with transaction fees. These latter two need to be discounted back.

If you really want to do a cost/benefit analysis, you need to include the programming cost. My hypothesis is that the volume of these transactions is small enough that the programming expense is not enough to overcome the negative profitability of each transaction.
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Old Jan 29, 05, 3:42 pm
  #66  
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The 10-cent charge showed up on my AMEX account, which I checked on-line. They had no problem processing it, obviously!

Bruce
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Old Jan 29, 05, 3:47 pm
  #67  
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Originally Posted by andymo99
You are missing part of the cost/benefit analysis equation. There is also the cost of reprogramming systems to accommodate these fare-collect overrides. This is a one-time expense (labor) incurred now. Such a cost might be repeated at some point in the future when systems are overhauled.
I hadn't advocated reprogramming, rather that this functionality should have been added from the get go many years ago. (I'm sure similar situations due to changes in routing, etc, have come about for a long time.)

I agree that the cost of making even the slightest change to an airline reservation system is significant (one of the more complex computer systems in the world, IMHO), and this issue certainly doesn't warrant a fix.
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Old Jan 29, 05, 4:10 pm
  #68  
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Here's another example from my government days: If you are a Social Security beneficiary and have earnings in a year (which can happen dozens of ways), SSA automatically recomputes your benefit to incorporate the additional earnings. However, if the change in monthly benefit amount is less than a dollar, you don't get it. This was programmed something like 40 years ago.

Bruce
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Old Jan 29, 05, 4:42 pm
  #69  
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Originally Posted by bdschobel
The 10-cent charge showed up on my AMEX account, which I checked on-line. They had no problem processing it, obviously!

Bruce
IMHO, we should start a new OMNI game and see which airline has asked and actually received the smallest fee.

Can anyone top Bruce?
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Old Jan 29, 05, 8:19 pm
  #70  
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Originally Posted by dan1431
I can beat 10 cents. I have an upcoming flight ATL-PBI purchased in "A" before the new Simplifares were introduced.

I called DL to change my flight and the price difference was one cent. I could not believe that DL was going to collect one penny from me, but they did.

Dan
Nobody will beat this one!

Bruce
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Old Jan 29, 05, 11:59 pm
  #71  
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...on the other hand, I have received a one-cent refund from Delta Air Lines as a result of changing a flight.

There it was on my credit card statement shortly thereafter.

My experience has been that Delta Air Lines has the same policy on refunds as it has on charges even for as little an amount as one cent.
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Old Jan 30, 05, 1:55 am
  #72  
 
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Originally Posted by andymo99
You are missing part of the cost/benefit analysis equation. [some deleted...] My hypothesis is that the volume of these transactions is small enough that the programming expense is not enough to overcome the negative profitability of each transaction.
I searched the internet for the story but didn't see it. I'll pharaphrase..

A person woking for a bank changed the program so that when calculating interest for customers, rather than rounding up to the next cent or rounding down t othe the next lowest (based upon a halfway point), he took the amount and added it to a seperate account. The bank soon discovered the millions of dollars he had amassed.

Delta could take any amount under a dollar and write it off to good will. This amount could easily add up to the income they get from taking miles from people who let them lapse without using them.
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Old Jan 30, 05, 3:12 am
  #73  
 
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Originally Posted by Lavarock7
I searched the internet for the story but didn't see it. I'll pharaphrase...
Wasn't that the plot of both Superman 4 (With Richard Pryor as the programmer) and also Office Space?
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Old Jan 30, 05, 8:23 am
  #74  
 
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I as well in the past have recieved a penny refund from DL.

It was rather funny actually, I was flying BizElite to Istanbul and upon my return I had a flight to ATL that I wanted to change to give me more time to clear immigration/customs/security. So upon checking in the in BizElite area I asked the ticket agent if he could adjust my JFK-ATL flight on the return. He did some typing and started to laugh. I asked what was so funny and he said that DL owed me a penny.

He then printed me out my refund reciept and looked at it for a minute showed it his friend and then said, well Mr. Dan1431 I thought I had seen it all working at this job but this is a totally new one to me.

Dan
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Old Jan 30, 05, 9:18 am
  #75  
 
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Well, when I changer local phone service from Verizon to Covista, got a check refund from Verizon for 0.01 (a penny)

Once DL charged my AMEX, 0.08 (8 pennies), then I requested DL to send me a receipt for it, to which they did, and from AMEX, I requested that DL submit a copy of the merchant charge, AMEX asked DL for a certified copy via a notary and DL then ship it to me via FEDEX Overnight Delivery.
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