2011's 5 biggest consumer snafus
Extended BlackBerry outages, failed debit card fees, and a new barcode to curb the most extreme couponers are among them.
This post comes from Quentin Fottrell at partner site SmartMoney.
It's difficult to choose the top/worst scandals of 2011 for consumers. There were corporate data breaches, wireless customers left incommunicado, and ill-fated new fees such as Bank of America’s $5 debit card charge.
SmartMoney.com asked a range of experts for the five biggest/worst snafus of 2011, the effects of which will still be felt by consumers in 2012. In no particular order, here they are:
Bank of America's $5 debit card fee. Bank of America announced in September that it planned to charge a $5 monthly fee for use of its debit cards. Customers revolted. More than 40,000 people joined credit unions as part of a protest that began on Facebook, according to the Credit Union National Association, bringing about $80 million with them. B of A killed the $5 fee in November, saying it had listened to its customers.
"The bank was betting that the other mega-banks would follow, making debit cards a thing of the past," says Odysseas Papadimitriou, CEO and co-founder of Card Hub. "That did not happen."
However, it's not over yet. Experts warn that the banks will search for other ways to make up the 50% reduction in interchange fees merchants pay when purchases are made with debit cards.
BlackBerry's global network outage. This was the year of the perfect storm for Research in Motion, analysts say. Not only did it do battle with the rise (and rise) of the iPhone 4S and a massive glut of unsold Playbook tablets, RIM was forced into major damage mode following an outage of its network that impacted millions of people around the globe.
"While technical glitches happen all the time, RIM really has no excuse to have major outages like they had had in the past," says Rick Singer, CEO of GreatApps.com. BlackBerry users were down for approximately four days. "This is not an acceptable amount of time," Singer says.
For its part, RIM offered its business customers a month's free technical support and a selection of apps worth more than $100 to those retail customers affected by the outage. Post continues below.
Extreme couponing hit a new barcode. The name J'aime Kirlew may put fear into the heart of manufacturers. The star of the first episode of TLC's 12-part series "Extreme Couponing" cut nearly $14,000 off her grocery bill in 2010 by clipping coupons. She matched barcodes -- not products. Some couponers reacted angrily, but Kirlew said she wasn't the only one to do this and told SmartMoney, "I was a scapegoat."
But manufacturers rolled out a new barcode system, "GS1 Databar," to help prevent using a 50-cent coupon for a single 33-cent carton of yogurt, when it's intended to be used for a multi-pack, as it would in theory result in "overage" or an actual profit for the customer. Rite Aid, Target and Publix also restricted their coupon policies.
Discounted Missoni crashes Target's website. Target's September foray into high-end designer labels caused a mad rush in stores, but also crashed the company's website for much of Sept. 13, the day of the launch. It left some consumers frustrated and analysts wondering how the company didn't predict such high demand for the multi-colored, zig-zag Missoni prints.
At the time, a Target spokeswoman apologized to shoppers for the inconvenience of not being able to access the site. However, analysts pointed out that Target switched from Amazon's Web platform to its own three weeks earlier and said that, despite the fact that the website platform switch was planned in advance, it still wasn't equipped to handle a one-time surge in demand.
Black Friday mania goes too far -- again. In November, an isolated incident in one Wal-Mart store got global attention and left some commentators wondering if the excitement surrounding the door-busting bargains had gotten out of control once again: A woman shopping at a store in Los Angeles shot pepper spray to keep shoppers from merchandise she wanted during a Black Friday sale. An attorney for the woman later said she did it to protect her teenage children as they tried to buy Xbox consoles, and a spokesman for Wal-Mart says it fully cooperated with the authorities. The news story went viral on social networking sites.
Wal-Mart was also among those retailers opening its stores at 10 p.m. on Thanksgiving -- two hours ahead of Macy's and Target. With competition among stores intensifying for recession-scarred consumers, retail analyst Jeff Green says stores have profit and sales targets to hit, shareholders to please and headlines to make.
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