COMMENTARY | COLUMNISTS | PHIL BAKER

Buyer beware of seller

Companies want your money, not your problems

Buying a service or product once meant conducting a simple transaction in which you pay for something and understand what you get in return. Products required minimal support and if they were defective they would be fixed or replaced by the retailer or the manufacturer with minimal hassle. These days, when we buy high-technology products and conduct transactions over the Internet, we face a much less certain outcome with a wide range of policies and support, some bordering on the absurd. While many companies take their responsibilities seriously to provide good product support and to maintain privacy, there are some companies where "consumer beware" is the unspoken but operative policy. In other words companies want our money but are unresponsive to our reasonable expectations.

First, there's the privacy issue. When we buy online we're often inundated with spyware to track and report our computer habits, hidden programs that install without asking for permission, and companies that sell our personal information.

Take, for example, Ticketmaster's privacy policy (www.ticketmaster.com). When you purchase a ticket from them online, you consent to allowing them to share your personal information with the venues, promoters, artists, teams, leagues and third parties associated with the event. They go on to say, "We cannot offer you a separate opportunity to opt-out, or not to consent, to our sharing of your personal information with them. Event Partners may use your personal information in accordance with their own privacy policies, and may consequently use your personal information to contact you and may share your personal information with others. You will need to contact those Event Partners who contact you to instruct them directly regarding your preferences for the use of your personal information by them."

Second, a number of software companies have poor support policies and user restrictions. Some of the biggest companies have some of the most egregious policies. Consumer Reports Magazine (www.consumerreport.org) states in their current issue (September 2003) that "in a survey of more than 10,000 computer users, software makers fall short in satisfying consumers when compared with other service providers. Software companies' support scored 63 on a customer satisfaction scale of 0 to 100 in our survey, putting it among the lower-ranked services we've rated in the past 10 years." (They fall slightly above cable TV companies but below cell phone carriers.) According to the publication, of the 8 million consumers who run into problems with their software and call for technical support, 30 percent cannot get their problems fixed.

I recently experienced this lack of support first hand. I was having a hard drive problem and tried buying and downloading Symantec's Norton Utilities to diagnose the problem. When I was unable to purchase the product online because of their Web site difficulties, I rushed out to buy it. After installation, I was unable to get the software to work, perhaps because of my defective hard drive. I tried calling Symantec Corp. (Nasdaq: SYMC) and found that phone support was $30 per call! I promptly returned the software. (Nowhere on the box or in the manual was this fee noted; it was only disclosed on their Web site). To add insult to injury a month later, my American Express credit card was billed for the failed download (which American Express subsequently reversed.)

This type of insensitivity to customers' needs is nothing new in the high-tech industry. Ten years ago, Ed Foster began writing a column for InfoWorld (www.infoworld.com), a popular computer industry publication. The column addressed product and service complaints from their subscribers. Ed's background at InfoWorld as an ombudsman, who worked with customers and companies to resolve these complaints, has given him excellent insight and experience with the industry, and he is considered by many to be the authority on these issues. Ed recently began his own Web site (www.gripe2ed.com). The site is most effective at uncovering some truly onerous policies and at providing a place where others can share their experiences. He also sends out a weekly newsletter. He believes that shedding light on these policies is the best way to get them changed.

Why have the problems been getting worse? Likely as a result of companies cutting their support staffs as business becomes more challenging. Also, as the industry becomes more consolidated, the larger companies are able to get away with more.

Foster has compiled a "GripeLog Hall of Shame" made up of companies that generate an almost never-ending stream of complaints from his readers. While he does not statistically measure the complaints, his 10 years of work does allow him to know if he is dealing with a true issue or just something in passing. Some companies have consistently generated a high volume of complaints, particularly Intuit (Nasdaq: INTU), Verisign (Nasdaq: VRSN) and, as I experienced, Symantec. He notes that one surprise is Gateway (NYSE: GTW), who did not make the list, while the one company that is rapidly sinking on his list is Dell (Nasdaq: DELL).

Here are Ed's "Bottom 5" on his GripeLog in order of bad to worst, based on his readers' loudest and most consistent stream of complaints:

* No. 5 Hewlett-Packard (NYSE: HPQ) (HP/Compaq computers, printers): Computers do not ship with Windows discs making it nearly impossible to recover from crashes; out-of-stock-parts problems make repair times lengthy. According to Ed, HP/Compaq has a particularly poor record for desktop computer support and service.

* No. 4 Dell (Notebooks): Computer problems and poor support; Web site sales bugs. With more phone support being moved offshore using less skilled employees, customers complain of difficulties in getting their problems addressed without making multiple calls and spending hours on the phone.

* No. 3 Microsoft (Nasdaq: MSFT): Security bugs, over-reaching end-user licensing terms, security holes in its programs -- such as Outlook -- that allow viruses to spread.

* No. 2 VeriSign (Network Solutions): Tricky tactics denying domain transfers, technical incompetence, squatting on expired domains. VeriSign makes it particularly difficult to move your Web site to another host.

* No. 1 Intuit: Lack of free support, QuickBooks tax service fees, TurboTax product activation codes, Nagware -- the term he gives to ads that appear in many of their products, not being able to use some of its purchased software on a second computer. (Intuit responds that it has instituted these policies to reduce piracy, but says they will not use activation codes in 2004.)

Computer companies frequently try to wriggle out of responsibility. For example, when you pay extra for onsite service from companies like Dell, that does not mean the company will send a service person to your site. It is more likely you will need to go through hours of testing and diagnosing and only then if they agree that there is a hardware defect will the company arrange for the defective part to be replaced. That will usually occur only after requiring you to re-install Windows and all your programs to eliminate other causes. Often it is easier to find a local authorized repair facility or a computer technician that can do the work for you.

What can be done about this? My advice is to buy your products from establishments that will provide a second line of support in case manufacturers fail to meet your expectations. For example, Costco (Nasdaq: COST) will stand behind any computer product they sell and will even take back your computer. I bought an HP desktop for my wife and it would freeze frequently. After numerous calls, HP refused to address the problem, blaming Windows software. Months went by with my trying to fix it. Eventually, I brought it back to the Costco where I purchased it and they took it back almost a year later with no questions asked. (Their current return policy is limited to six months, which still is far superior to other retailers.) Some stores like CompUSA provide in-store service but will charge a 10 percent to 15 percent restocking fee for returning a product. Wherever you buy, always use a credit card as your third line of defense. I've experience good customer support from most credit card companies, including American Express, Diners Club and Citibank cards when dealing with returns, disputes or unauthorized online charges.

If readers have experiences, either good or bad, please e-mail them to me. I will publish some of the most interesting responses in a future column.


Baker is San Diego's Ernst & Young Consumer Products Entrepreneur of the Year in 2000 for successfully bringing to market Think Outside's folding keyboard for the Palm and other PDAs. He also has developed and marketed consumer and computer products forPolaroid, Apple Computers Inc.(Nasdaq: AAPL), Seikoand others. He is the holder of 30 patents. He can be reached at phil.baker@sddt.com.

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