Making customers pay for company mistakes... sound business sense or damaging to brands?
Like many people this summer, my holiday plans were interrupted by last-minute cancelled flights. Stranded in an Italian airport, we were informed by British Airways that our best option was to fly home the next day from another nearby airport. They reassuringly told us to keep receipts because they would cover our expenses. We booked a budget hotel and took public transport, but this still totted up to almost £300 per person (there were two of us). What British Airways had failed to tell us was that it would take a minimum of 3 months to process the expense.
We’re almost two years into a cost of living crisis. We’ve heard through our work with customers that many have depleted savings trying to cover increased costs or have been pushed into hardship. 34% of adults in the UK now have savings of less than £1000 or nothing at all. Less financial resilience means that unforeseen costs like £600 outlay on an unexpected flight cancellation can have a big impact.
If you try and call British Airways, you’re greeted by a message begging for understanding “we’re dealing with an unprecedented number of cases at the moment, please be patient…” but how understanding are they being of customers?
It's not just British Airways either. I recently had a supermarket cancel an online delivery order because they hadn’t managed to reach us before the end of the driver’s shift. If we didn’t want to collect it from store ourselves, a refund would take 3-5 working days. There is an assumption that customers will have enough financial flexibility to not need to wait for the refund before being able to reorder, but for families on a tight budget this might mean going without food.
Making customers pay for your mistakes highlights that you put short term commercials above your customer lifetime value... It is noticed and it makes you think – is this really a brand I want to give my money to?