Joanne McNeish is an assistant professor at the Ted Rogers School of Management, Ryerson University.
Before the introduction of electronic billing, paper bills and statements helped people navigate their finances.
They told you how much you owed and when to pay. They helped to keep records and they were useful whenever there was a disagreement. Most people heard from their telephone or hydro company only when the bills came in the mail.
But now profit margins are thinner. Discouraging customers from receiving paper bills is a handy way to save money. It’s smart business.
Many Canadians quickly embraced electronic bill payment. But after almost 20 years, more than 90 per cent of online Canadians still resist giving up paper bills. Because paper has more value than just showing the amount due. Paper bills represent control. When using electronic banking, people feel that they have less control over their financial information than they do when the information is received on paper. That’s because you can touch it, hold on to it and keep it for reference for as long as you want. The paper bill is a form of protection that can call banks and billing organizations to act on your behalf.
It’s part of the reason people can trust the electronic financial systems. Paper bills complement online banking, support its continued use and still work when the Internet does not!
Paper bills are the touchstone of the business relationship. Canadians conclude from the imposition of a fee for receiving paper bills that their relationship with these companies is not very strong. Companies pay millions of dollars to create goodwill with their customers and are squandering it by charging for a service that is perceived by many to be essential to good financial management.
Indeed, charging for the paper bill seems to be backfiring on banks and billing companies. Now that paper bills have a price tag, the service becomes inherently more valuable.
And companies keep reinforcing that value. The same company that tries to interest consumers in giving up paper bills insists that customers have an “original” paper receipt in order to return and receive a refund for the full price of a product. People are wary of what they see as these organizations’ disingenuous tactics. We all know how hard it can be to get attention without a receipt.
Many companies explain the charge in terms of protecting the environment. If they were also reducing the number of paper direct mail pieces sent, the argument might hold more weight. By continuing to send direct mail, companies demonstrate their own belief in the power of paper to create a relationship.
Companies that insist on discontinuing the paper bill may unknowingly be damaging the relationship with the vast majority of Canadians who still want to their bills in the mailbox.
But if they persist, companies must become more creative in the way they charge for billing information. Instead of just charging for detailed information on paper, why not offer a sliding fee scale for the delivery method and the amount of information? Why not just charge for the paper? After all, it costs money to produce the detailed information about your service usage whether on paper or electronically.
And what about retail stores? Instead of providing a paper receipt for free, stores could give you a choice between an electronic receipt or paying for the paper receipt. Using the same logic, it costs money to produce the receipt.
The Canadian Radio-television and Telecommunications Commission is meeting with billing companies on Aug. 28 to discuss solutions to Canadians’ resistance to being charged for paper billing. They should understand that consumers are not willing to pay for something that is, frankly, a cost of doing business.