Tyler Cowen offers a theory on the economics of complaining.
Complain when the marginal cost of extra service is low. Complain when the reputation of the seller is evaluated online in a meaningful way. Complain when the service norms are something other than equal treatment.
He offers several examples in service of this theory:
- Bureaucracies aren’t worth complaining to everyone at the DMV is supposed to be equal, you aren’t likely to get special treatment. And giving you special treatment is expensive.
Hospitals, and much of the health-care system, also tend to be bureaucratic, so complaining doesn’t help much there, either. You are probably not the paying customer (most people have health insurance), and there is not much spare labor.
- Hotels compensate more generously giving an upgrade into an empty room isn’t expensive, and they might get future business and turn compensation for a service failure into an investment in a future revenue stream from a loyal customer. A restaurant might do the same thing comping a dessert or drinks.
- Airlines are stingier because everyone complains about airlines anyway, and helping you doesn’t change that, why is your case special?
Some of these principles may be true generally, but I don’t think they fully hold and we can do a lot better.
Compensation for hotels can be expensive. If they give you points, they have to buy those points from the loyalty program. If you complain to the chain and get compensation the hotel is probably the one paying for it, and may even be fined for the underlying transgression.
Airlines are actually were more generous with compensation than suggested – before the pandemic, anyway.
- Years ago United Airlines preprinted ‘please accept our apology cards’ for flight attendants to distribute to customers whenever there was an issue. These were loaded in large packs, and the airline decided it was cheaper to compensate passengers with vouchers for future travel rather than spend money on ‘non-essential’ maintenance like replacing reading light bulbs. The amount of compensation a passenger would receive depended on their elite status with the airline (or not) and the length of flight.
- American Airlines two years ago rolled out a program they call ‘iSolve’ which allowed flight attendants to provide immediate compensation to passengers during a flight like inflight entertainment not working, not having boarded a special meal, or a broken reading light. (This was suspended in June.)
- Post-David Dao, airlines became very generous with denied boarding compensation, offering as much as $10,000 in travel vouchers to avoid treating a passenger as having been involuntarily denied boarding [As of May United will now only offer up to $2500]
This is how badly United didn’t want to give me cash: pic.twitter.com/sI7vmbeB2Q
— Allison Preiss (@allisonmpreiss) March 22, 2018
- Of course complaining too much can lead an airline to decide to fire you as a customer. In the U.S. Supreme Court case Northwest v. Ginsberg the airline ‘fired’ a customer for complaining too often and receiving too much compensation. They lost the miles in their account and other accrued benefits and sued. The Supreme Court held that federal preemption in the Airline Deregulation Act precluded a lawsuit based on state-level concepts of a duty of good faith and fair dealing (which amounted to states regulating an airline).
Note that what we’ve seen is the value of complaining to airlines during the pandemic going down, and also the value of complaining to hotel chains too, despite excess inventory. The pandemic becomes the excuse, local regulations become the catch-all excuse (even when the problem isn’t really related).
I think there are some universal approaches that work well when complaining, or pushing to resolve problems.
- Hang up, call back. If you don’t get satisfaction the first time, ask someone else.
- Be nice. Build a rapport. Be someone that the person you’re dealing with wants to help. Say please and thank you, offer a story they can sympathize with. You’re asking them to go out of their way and they often have a choice whether or not to do so.
- With bureaucrats, be the squeaky wheel. You want the path of least resistance to be helping you, because it makes you go away. That means not going away. If you don’t get a response, follow up. And keep following up. But always be nice, because you don’t want the bureaucracy taking revenge on you, in the airline context putting a note on your reservation.
The value of complaining to bureaucracies can be quite high, you just have to complain more loudly than usual. You need to be loud enough to credibly commit you won’t go away, and that the tax you’d be imposing on them isn’t worth their continuing to ignore you. Although you need to take care not to push it so far that they resent you for it.
- Be specific about what you need. Make it easy to help you, don’t make someone guess at how to make things right. They might guess at something that won’t satisfy you. And the more work they have to do, the less clear what you want, the lower the likelihood they’ll jump through the hoops of figuring it out.
- Ask for things within the power of the person you’re asking. A front line customer service agent can apologize to you, but they cannot offer “an apology from the CEO.” You may feel that your week of meetings has been ruined by some transgression, you’re a high-priced professional who bills out at $500 an hour, but you’re not going to get cash compensation for a 60 hour work week. Be reasonable in your request, what’s the minimum you need to fix the problem?
If you’re reasonable, nice, and persistent – in other words, if you’re easy to help and easier to help than not help – you’re going to do well complaining in almost any circumstance whether it’s the cable company, an airline, or the DMV.
A bureaucrat may go out of their way because they sympathize with you or at least because you’re nice, nicer than most of the people they deal with. A hotel may offer you compensation because they genuinely feel they’ve shortchanged you in some way, or because it’s cheap to make you feel better about your experience. An airline’s rules are so complex you might get what you want just by finding someone who doesn’t search the rulebook for a reason not to give it to you (call center roulette).
Compensation in the travel game is tough because it seems like so many people are out to game the system. Read the toolbags at the Memories to Miles blog where “compensation” can probably be their listed occupation on their tax return. For every person who deserves compensation there’s someone trying to game the system and scam the system. It makes it harder for people to successfully receive due compensation when they experience a service failure.
Compensation is tough also because of identity politics. Straight white women are lambasted as “Karen” for any complaint (because the SJW mob does not do any due diligence as to whether a complaint is legitimate). And, hang on, let me microwave some popcorn…. Certain groups can play certain cards and get their way.
Has anyone run into this problem. Had to cancel tickets home on American Airlines as we couldn’t get into Costa Rica in March to use them. They gave us a cash credit as we had paid cash for them but to use the vouchers, we have to be traveling FROM Costa Rica, the country of origin. Bit of a problem as we don’t have them in our plans for the near future.
HELP
Howard
Being nice is definitely first and foremost. Some of the best service I’ve received are at times when I have immediately followed a person having a tantrum. By being nice and empathetic to the browbeaten worker, I have been viewed as an ally in their commiseration, and they will go out of their way to help me. A few weeks ago this happened to me at the DMV. The worker minding the line had been excoriated by a woman who was crude and hostile. After the angry lady left in a huff, I empathetically asked how people can be so rude. Next thing I know, I’ve skipped past 20 people in line. Similarly, a few years ago, a KLM agent minding a long line had been lambasted by a traveler. After that person left, I told the KLM agent that I was sorry people were treating her like that. She then immediately took me to the front of a 5-hour line that had formed because a major storm had resulted in every flight in Amsterdam being cancelled (hence the yelling traveler).
Quick story about pointless complaining (along the lines Shaun was describing above):
A couple sitting a few rows ahead of me on a packed flight were complaining because they had been assigned the exit row without being asked. Since there were not pairs of seats left in economy, they were demanding to be moved to business.
I got the FA’s attention and told her my friend and I would be happy to swap with them, but they declined the offer because according to their transparently fake logic it wasn’t that they didn’t want the exit row, it’s just that it was wrong in principle that they should be assigned it without asking them.
Moral of the story: you won’t be moved to business solely because you’re stupid.
This absolutely holds, IME. This can also extend to rule stretches and even breaks that one is really not due. For example, I had a biggish flight change and accepted a new routing. A couple of days later I looked at what I had agreed to and realized it was stupid. But I had agreed and was due no other free changes. I called, explained while acknowledging that I had agreed ans was due nothing and got a waiver and a second free change.
This is not a compensation case, but the same works there for reasonable, and not repeated, requests. Attitude seriously matters.
Cheers.
With bureaucrats, specifically when you deal with government agencies, of which I have dealt with many during the course of my career you are doing way more harm than good by going back repeatedly with the same issue. I have seen people get really screwed over by engaging in this very conduct. Some bureaucrats will be polite to your face, but behind the scenes they will take actions that will make your life soo much more difficult if you push them. Your best chance with them is to be incredibly polite from the get go. Repeatedly pushing the issue is going to make it worse and the only way you can effectively complain is if you really know how to work the system and even by doing that you need to do some calculations since you may burn bridges that you need in the future.
And smile!
Sometimes you just have to use your brains instead of even trying to complain. A few years ago I was flying from Tel Aviv [Israel] to New York via Warsaw on a Premium Economy ticket that was just unbelievable value. Unfortunately, after the plane landed in Tel Aviv from Warsaw some technical issues arose with the plane after all the passengers were checked-in and the first leg of the trip was canceled. All the passengers were told to go to the airline’s sales desk to be accommodated. A general announcement was made that all New York passengers would be put on the same flights the next day, which was not helpful as I had a meeting in New York the next morning. There were two girls dealing with about 70 people, many of whom were shouting and screaming. After waiting in line for a few minutes I realized that there was no way out of this where I was standing. I found a quiet corner, called the LOT head office in Poland where a charming agent re-routed me on a direct flight on Delta later the same day, all the while apologizing that all she had was an Economy seat and that I would of course receive compensation for the downgrade from PE. I was admittedly charming to her, these things happen, etc. and I am sure you will do all you can to help, but she was equally charming back. The compensation for the late arrival and downgrade came to more than the cost of the ticket!
I was once the LAST stand-by passenger called for a flight; Just as I arrived the seat, I got called back to the front with my carry-on baggage because the passenger for that seat had arrived and it was a teenager who had priority. I was standing by the Head Flight attendant when the young girl boarded and she apologized for having made my give up the seat. I assured I was fine as I had a later flight booked and was just going to fill her seat of she didn’t arrive. As I turned to head off the aircraft the head flight attendant told me to wait. It turned out that there was seat in FIRST CLASS that had not been booked because it wouldn’t recline. I said that was fine for me and I got to fly FIRST CLASS at no additional cost; AND got FIRST CLASS Service including free drinks.
IT PAYS TO BE POLITE !!
Something went wrong with baggage on a flight and about a dozen of us went from the carousel to the airline’s office in the baggage claim area. The woman at the head of the line was complaining, even cursing, at the attendant. A distinguished-looking gentleman in line went forward and said to the complainer, “Ma’am, this woman did not lose your bags but she can help you find them” and then added “… and help the rest of us.” All of us applauded.
“Be nice.”
Exactly what I did at the DMV yesterday — expressed that I was grateful for their working during this horrible phase of COVID and they were surprisingly efficient and the clerk very friendly and polite.