A Little Gift
Last weekend I was speaking to someone about credit cards and this hobby. This person didn’t have a Discover card and said they wanted to get one, because “everyone loves theirs”. His statement got me thinking about Discover and perhaps why a lot of people I know love them so much. (I’m sure there are a lot of people out there who don’t like them.)
Then two days ago I opened my email and saw that Discover had sent me something. At first I thought it was probably just a statement reminder and then I noticed the subject said, “Enjoy a $5 Starbucks gift from Discover.” Cha-ching!
Why Discover Tries So Hard
Discover really is in an uphill battle in the credit card world. They have their own payment processing network and limited acceptance outside of the United States, so they simply have to try harder. I don’t care why they do it, but I like that they do.
But why do people like Discover? Since I am not trying to sell you on a credit card, I have decided not to mention their cards specifically in this post. For me it is about their customer service and even more importantly Discover Deals their shopping portal. (See: Shopping Portal Strategy) Oh and Six Flags! You can’t forget about Six Flags.
Why It’s Appreciated
Because of this hobby I am constantly having to deal with a variety of companies and most of them suck. From Staples to Walmart, I constantly deal with mediocrity. When I walk into a Costco or receive a small gift from Discover, it makes me appreciate those companies even more.
If I chose which companies I do business with strictly on their customer service, then I wouldn’t go anywhere near Staples, Walmart or so many other places. Unfortunately I am a travel hacker and deal hunter so I take the abuse. On the flip side, it just makes me appreciate that $5 Starbucks card even more.
See: Two Extremes of Customer Service – A Company That Goes Above & Beyond & One That Simply Disappoints
Should It Matter
In my opinion the issues of credit and money are more important compared to deciding where to purchase groceries or office supplies. Since the stakes are high, it becomes a question of whether a “good feeling” or good customer service means you should stick with a bank.
In the real world I talk to people all of the time who tell me about their favorite 1% earning card that has its own nicely worn wallet slot. They almost humanize their card with the way they speak about it. While I sort of get why that feeling exists, make no mistake it is a costly one.
What if that person got a 2% cash back card with a mediocre bank and what if they spend $24,000 per year on their credit card? Instead of earning $240, they would earn $480! Their attachment to that piece of plastic costs them $240 every year. That is a lot of money and some people are paying much more for their loyalty.
Conclusion
So now we know why Discover send me $5 Starbucks eGift cards. It gives me that good feeling inside and makes me grow attached to them and their plastic. Or at least it has that effect on most people. I choose not to fall into those traps, even though I love to receive $5 gift cards in the mail. I really love it!
But seriously, don’t pay a company $240 a year (or much more) because they make you feel good. Do it because their products are the right choice for you. If they make you feel good at the same time, then that is just icing on the cake! Your thoughts?
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In general I agree with everything you wrote. I do however place a small premium on better service. An example of this is I’ve shifted my grocery and household shopping to Target and not Walmart.
It’s also why I’ve stayed with Tmobile for almost 12 years now. There’s been a few times when I was considering switching carriers, however I’m always able to speak to the “loyalty department” every time I call in so I don’t have to deal with the front line reps.
One of my personal pet peeves is stupid people. I know that comes across as conceited but what I mean is inept service when all you need is a common sense question answered that they should already know. Whether that’s a result of poor training or a disengaged employee, the end result is poor service.
I know that many of these deals, in MS or elsewhere, are in large part due to low costs so I can’t complain too much. Not every company can operate like Costco and keep quality products and people. For those who don’t spend a lot and don’t MS, Discover is a great card to have with the 1% cb and rotating categories. I’ve had one issue with Discover in the past, but several good ones (with prompt service) and overall imo they’ve been the best customer service in the industry.
On a side note, this boils down to what I call the PITA factor since learning about MS last year. A lot of these deals aren’t worthwhile if the PITA factor is too high. Everyone has their own threshold, but for me, I prefer options that have the lowest risk of complications or time vacuums to iron out the wrinkles. Customer service is definitely one of these factors, but not the most important.
I agree Anthony. Everyone has to decide where they draw the line between a good deal and the PITA factor as you say. It takes trial and error and a little pain to find that line.
Thanks for sharing!
It’s not as simple as $240 vs $480, you need to look at the hassle as well. Some people are more than happy to pay a premium for better customer service/experience. There isn’t anything wrong with that, the problem is that a lot of the time people don’t fully understand how much of a premium they are actually paying.
Personally I find most of the credit card issuers are pretty similar in my dealings with them, I’ve had problems with Discover miscategorizing spend before for example and I’ve had to manually call them multiple times to get the issue fixed.
You pretty much nailed it. There is a price I’m willing to “pay” for good customer service experience, especially to the extent it saves me time (worth something) and/or avoids aggravation (more difficult to quantify) and/or has other intangible value (such as the Costco return policy). And I’m all for being loyal, all else being equal. But I’m always amazed that people would accept 1% over 2% (to use your example) just out of loyalty.
If you are NOT going to reward a credit company for nice customer service, why complaint about those who don’t do the job as well?
Ditto for airlines. we all complain about airlines ruining their seats et al. but inevitably choose the cheapest one. There is a race to the bottom and we are all willing participants in it despite the constant moaning.
You are right, although I think there can be a balance. As I said though, I am usually looking for the best deal and thus have to deal with the headaches.
Basic customer service doesn’t cost a ton of money though. If you are already paying someone to deal with customers then why not train them? Most of the legacy airlines all charge about the same money, but why are Delta and Alaska FAs so nice?