I remember a time where companies offered goods and services and consumers purchased those goods and services at a competitive market rate. If the company did something wrong or had terrible customer service, we would stop buying from them and get our products elsewhere. There were a few monopolies where you were stuck with what they had and what they wanted to charge. But otherwise, the free market seemed to work fairly well.
Those were the good old days. Today it's hard to get a product or service without first having to sign a contract or join a price club. Some grocery stores won't even give you their sale rate unless you use the little card that tracks your purchases. But it's the contracts that really irritate me. I had to sign up for a 2 year contract on my cell phone plan, 2 years on my satellite TV, a year on my Internet service and landline phone (both of which are tied to my satellite service contract). In the event that I decide to change my service, I'll have to pay a hefty early termination fee. Everyone of these contracts starts out with the phrase that the service provider can change the terms of at any time without notice - yet I have no way of changing my side of the contract. I'm stuck with that service - good or bad for the life of the contract. How is all that the free market capitalism?
Clearly the capitalistic market we have today is tilted heavily in favor of corporations through these service contracts. Corporations have their profits protected whether or not they provide a good product or service. AT&T cell service for example is terrible by must users accounts - yet those users are stuck in their contracts until the 2 year term ends. And that doesn't even count the contract that AT&T had with Apple over the iPhone for years. That contract kept the product out of the hands of people who wanted it but didn't want to do business with AT&T - like me. These contracts also help corporations guarantee bank funding because they can show the banks they have no risk of losing money. Guaranteed profit. Where is my guarantee? No such luck. They can raise my rates or change my service plan at any time - even without notice.
I know the argument will come up that in most cases the companies give you a free device of some sort in exchange for your commitment. That's true and in some cases it makes for a good deal in the long run. But why the contract? How about this instead. You give me a reduced price on a device and I'll use your service. If I decide to go elsewhere for whatever reason - you get your device back. By the time the device is worthless the contract term would have been over. Easy.
For the capitalistic free market to work properly, it needs to be a free - unhindered by binding service contracts. Corporations will still be able to secure their bank loans by proving they can provide an outstanding product or service and keeping their customers happy. We need to get out of this "protect the corporation" mindset and get back to a system where consumers get a good product at a fair price - by natural unhindered competition.
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11 comments:
Excellent post.
Timely post. I've been busy for the exact reason listed in your latest post. We had AT&T make us an offer we thought we couldn't refuse. Let me just say, I had a couple of major meltdowns with this installation and after it was all said and done, we cancelled it and will file a complaint with the BBB now. If I had time, I'd type up the whole sorry affair with photos of a mess outside, in the basement and in the crawl space to prove the incompetence of the installer, along with the lies of the sales guy, but I'm so far behind in my other chores...that I can't. Hopefully, we won't have to hire a lawyer.
One bright spot in the last day was that NBC Nightly News actually covered the protest on Wall Street. I don't think you have to be left, right or young to support their cause.
Lisa in Indy
AT&T is the worst corporation in America in my opinion. Possibly the world.
I actually wanted an iphone years ago but waited until it was available through Verizon. I'm still locked into a 2 year contract though. Thank goodness i have no complaints with verizon's service.
I agree Denbec. AT&T has gotten so big that their people don't care. They must be terrible to work for. I'll catch up to you once I have my complaint letter all typed up. We were willing to give them a good chunk of money every month for tv, phone and internet and they blew it.
Lisa
I think it is worse than they don't care. They don't know! The company is so large and disconnected the various parts have no idea what the rest is doing. Try to get any sort of tech support - even online and they will be completely clueless. Everything is outsourced, merged, leased or otherwise disassociated with the actual core of AT&T. It's insane!
My concept of BECi would have kept this from happening to us. You notice I said "Us" and not "Them". As you are experiencing - it's the customers that suffer from ineffective monsters like AT&T.
We were at the AT&T store on Saturday getting more information for this process and the salesgirl (who was young-mid-20s) had to be transferred twice during her support call. That proves what you say - they DON'T KNOW! She got a bit irritated that she had to repeat herself three times. Once I saw that, I knew that we were done with them. I've never seen such a runaround for employees within their company! If I had run a call center like that, I would have been fired. Unbelievable.
Well - I guess we are ALL in agreement that these consumer contracts are anti-free market.
I understand your dislike of mandatory service contracts (I can't stand them either), and of grocery stores that reserve the best price for their club card members, but I don't see how any of this qualifies as somehow anti-free market.
These companies all provide the goods and services that you want and they charge whatever prices for those goods and services that the market will support. It just happens that is some cases part of the market price includes mandatory service contracts.
There is nothing inherently anti-free market about that. All of these providers have to compete amongst each other for your business. If they over-price their products, or attach too many onerous strings to the deal, then at some point you will stop patronizing them. No one is forcing you to accept the deal.
You just want everything to cost less. Well, what consumer doesn't? I wish Rivendell bicycles only cost around $300, rather than around $3000, but they don't. They cost exactly what the free market determines that they should cost.
The same is true with your phone service, your cable, and your internet service.
***
"For the capitalistic free market to work properly, it needs to be a free - unhindered by binding service contracts."
You are just demonstrating that you don't really understand what "free" means in this context. It is exactly the free market that has determined that such service contracts are viable and market appropriate in the first place.
Andre - your post is laughable. Read it again and you might even agree. This phrase alone proves my point:
"then at some point you will stop patronizing them."
At some point?! I'm in a CONTRACT. I can't stop patronizing them until the contract ends or else I pay.
Guaranteed profits for corporations - no protections for consumers.
NOT A FAIR OR FREE MARKET
"Guaranteed profits for corporations..."
Maybe, but who is it that guaranteed them these profits? You did!
Take some responsibility for your choices, and stop acting like the eternal "victim".
No one forced you to enter into that contract, and no one will force you to renew it.
At the end of the contract period you are free to choose to take your business elsewhere (and if you were seriously displeased with the service you received during the period of that contract, then that is probably what you should do).
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