The Economics Of Retail Bank Branches, Frequent Flyer Programs Should Fight Fraud Less [Roundup]

by Gary Leff

News and notes from around the interweb:

  • Relevant to loyalty program managers (as well as credit card issuers): The optimal amount of fraud is non-zero the higher your margin (and airline frequent flyer programs are high margin) the more costly in net revenue anti-fraud measures which discourage customers from transacting will be.

  • How the economics of retail bank branches work they’re all about sales and cross-selling, which banks don’t do well through automated channels.

  • Have you ever tried to check in for your return flight home, only to find that your itinerary was cancelled ‘because you didn’t take your connecting flight to get here’? Well Delta told the father of an unaccompanied minor that the kid hadn’t been picked up from the airport a week earlier. Well, if that were true, why wouldn’t have Delta called anyone? And how is the kid standing there at check-in?

    Delta Air Lines told an unaccompanied child’s father that his daughter had not been picked up from the airport a week after the flight because the airline’s system failed to record that she had been collected.

    Richard Fritz, from Detroit, Michigan, was told that his 13-year-old daughter was “never released” from the gate when he went to check her in for a flight back home to Burlington, Vermont in the spring.

    “When I returned her to the airport a week later, the agent who was trying to check her in said ‘our system says she is still waiting for you to pick her up at the gate from last week’,” he told Insider.

  • Is TSA anti-science?

  • Sure they promise accommodations during controllable overnight delays but

  • Not even the roach coach

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Banks are silos. The credit card division is virtually a separate company and doesn’t play well with the other divisions or the branches. At Citi, the silo concept is even extended to the individual cards, each being like its own little company. As for the branches, their compensation is driven by loan initiation (as well as annuity/insurance product sales and fee-based wealth management programs). That’s it. A person could have $10 million sitting in a checking account and, if you’re not generating sales or asset-based revenues, you’ll get the same level of service as someone with $10 sitting in a checking account. And, you certainly won’t get a black plate and black napkin because you’re a whale as at MGM. Trust me on this one.

  4. Never wait for a hotel voucher during IROPs. Book something reasonable yourself and send in the receipt.

  5. This is very interesting. The more you want people to use your program, the less stringent your anti-fraud measures should be. To me, this relates to public welfare programs as equally as to any financial program. If you try to reduce fraud to near zero, you’ll also reduce the utilization of the program significantly until it becomes almost impossible to help the people using it legitimately.

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