I have an account with Bank of America who removed some features of the account without my consent and I want to get back those features for the same price it cost when I opened it. I guess that persuading or yelling at staff them would not make any difference (more likely do even worse), but if I tell that I will otherwise close the account (thus they will lose a lot of money from my savings), would they stand back? Does the manager have any pressure to keep the account to the point of giving away free products to keep the costumer or do they not really care?
asked Apr 21, 2017 at 16:45
7 Answers
If this matters to you a lot, I agree you should leave. My primary bank account raised chequing account and transaction fees. I left. When I was closing my account the teller asked for the reason (they needed to fill out a form) and I explained it was the monthly fees. Eventually, if a bank gets enough of these, they will change.
I want to get back those features for the same price it cost when I opened it
They are in their rights to cancel features or raise prices. Just as you are in your rights to withdraw if they don't give you a deal. The reason why I mention this is that this approach is comical in some instances. A grocery store may raise the price of carrots. Typically you either deal with it or change stores. Prices rise occasionally.
thus they will lose a lot of money from my savings
From my understanding, a bank makes a large chunk of their money from fees. Very little is from the floating kitty they can have because of your savings. If you have an investment account with your bank (not recommended) or your mortgage, that would matter more. I've had friends who have left banks (and moved their mortgages) because of the bank not giving them a better rate.
Does the manager have any pressure into keeping the account to the point of giving away free products to keep the costumer or they don't really care?
Depends. I've probably say no. One data point is an anecdote; it is expected in a client base of thousands that a few will leave for seemingly random reasons. Only if mass amounts of clients leave or complain will the manager or company care.
A note: some banks waive monthly account or service fees if you keep a minimal account balance. I have one friend who keeps X thousand in his bank account to save the account fee; he budgets a month ahead of time and savings account rates are 0% so this costs him nothing.
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So the answer in short is no. I'm still curious to hear from an actual employee from a US bank (if you are not). I know from an employee of a bank of another country that they have a sales target each month, but I don't know if they have a sum of accounts balances target. Apr 21, 2017 at 17:06
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I also play the high balance to waive the fees game with BoA, so I wonder if they are motivated enough to see my balance high. Apr 21, 2017 at 17:07
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1@GabrielDiego Very little is from the floating kitty they can have because of your savings. This is simply not true. Savings balances are used to make loans. The bank only maintains a portion of customers' deposits in liquid form. The rest is invested or loaned out. An individual savings account might not contribute much, but the aggregate of all the cash accounts at a bank is the foundation of that bank's business.– XalorousApr 21, 2017 at 17:44
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Minimum balance does have an opportunity cost. Savings accounts exist which pay 2%. If you're keeping 1000 on deposit to avoid a $5 per month fee, that's a 0.5% return on investment per month. Roughly 6% per year. So that beats savings. But it doesn't beat the stock market over time (S&P 500 index funds). Better solution is to dump the expensive account, move to a bank or credit union that offers free checking, invest the thousand. Unless the checking 'min balance' is part of the emergency fund.– XalorousApr 21, 2017 at 17:58
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@Lan Yes, the regulations require them to keep a certain portion of their deposits in liquid form. The rest is invested. The amount invested is greater than the amount kept liquid.– XalorousApr 21, 2017 at 18:30
Take your business elsewhere, where the products and services are priced at a level you agree to pay. This does two things. First, you end a bad business relationship. Why bad? Because you're not happy with the deal. Second, it sends an unambiguous signal to the losing bank that you were unhappy with their service. If they offer an exit survey, complete it, and be sure to tell them what made you unhappy with their service.
In a free market economy, if consumers all take their business where the terms are favorable, supply and demand would force the banks to compete for consumers' business.
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I actually like the service of BoA, so I would not mind to keep the account, but I want to negotiate more benefits (actually the ones I had before). Do you know what is the right point of pressure of a bank? Apr 21, 2017 at 17:55
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I don't think banks have variable pricing on their benefits. If you want their services, you pay their fees. So, either accept their prices or go elsewhere to find similar services for no/lower fees.– XalorousApr 21, 2017 at 18:00
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I do and I did. Banks often offer me deals while negotiating to open an account (since they are under high pressure to open an account), but I don't know how to do after I have the account open. Apr 21, 2017 at 18:04
To avoid going on and on in the comments I'm going to add this point that seems to be missing from the other answers.
"Banks often offer me deals while negotiating to open an account (since they are under high pressure to open an account)"
Would these happen to be the regionally advertised account opening deals like a $200 new checking account bonus if you deposit at least $x and leave it for at least 90 days? This kind of deal is not unique to you. This is not offered to you because of your unique negotiating ability.
You need to understand the authority of the person you're dealing with. Products are designed in the corporate arm of the bank. Once a product is ready, it's rolled out to branches to be sold; sometimes with some fancy sign-up bonus. A checking account is a product, just like an iPhone. Apple took the headphone jack out of the iPhone 7, no amount of negotiating with the Genius at the Apple store will put it back for you.
Vote with your wallet, show the bank you're unhappy by leaving.
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I recently opened an account at HSBC in France and thry offered me a credit card for a reduced yearly fee. Yes, banks have some level of negotiation margin if you know how to hit them in the right spot. The problem I've encountered with BoA is that it seems that there is nothing what I can do after the account is opened. Apr 21, 2017 at 23:02
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@GabrielDiego "Yes, banks have some level of negotiation margin", no they don't. That reduced fee on your new credit card contingent on having another account is a corporate arranged discount and the person you were talking to had the authority to offer it. It's not a negotiation. And either way, that's France not the US. Banks do the contingent fees and rates all the time. Want a car loan? If you have a checking account the you get a 0.25% discount on the loan!!!! It's not negotiated and unique to you.– quidApr 21, 2017 at 23:04
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2@quid Actually they do have negotiation margin. That's what retention team is for. Not everyone gets the same deal.– xiaomyApr 22, 2017 at 18:37
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@xiaomy not at the retail consumer account level. I can't call american express and negotiate the annual fee on my Platinum card from $550 to $250. A rep might have the ability to extend a one time offer of some points to offset the cost but they can't redesign the product. And a BofA branch certainly does not have the authority to readd removed features to a retail consumer product, especially not BofA which is notorious for not refunding fees.– quidApr 22, 2017 at 19:31
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@quid The offers you mentioned have different flavors, and are up to the person you talk to to decide what you will get. So there is quite a bit of negotiation here.They want to keep your biz, but with minimal cost. It's true you can't change the terms of the product. But in the end it's the oop cost that matters. If you can negotiate $100 back, that's $100 less on you AF.– xiaomyApr 22, 2017 at 22:19
I would hold off on making that threat (closing your account). First, because as others have said, it's not likely to help. And second, assuming you're willing to make good on that threat, you should only play that card as a final absolute last resort, because if it fails, and you close your account, there is little to nothing else you can try to get what you want.
First, talk one-on-one with a personal banker at your local BA branch. You might be surprised at how helpful they can be.
Next, try talking to customer service on the phone. After that, you might try sending a letter to corporate HQ.
A lot depends on the particular "feature" you are talking about and why they removed it. It could be that 1) the bank finds the feature is just too costly provide for free, 2) there may be a technical reason why they can no longer provide it, 3) it could be as simple as that few to none of their customers (excluding you) are actually using the feature, or 4) it could be that due to changing regulation, or market forces, no bank is offering that feature anymore.
Also, while they may not care specifically about your business, the local branch has an incentive to not drive customers away if it can be reasonably avoided.
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The feature in question was the online chat support. I read in forums that this still exists, but only for high end costumers. I already talked to their phone support and e-mail support, both say that there is nothing they can do about that. They didn't even offered an account upgrade. Apr 22, 2017 at 12:22
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@GabrielDiego That doesn't sound like something a branch manager can control.– xiaomyApr 22, 2017 at 18:38
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@GabrielDiego, there is nothing they can do because the product features aren't negotiable. And they didn't offer the account upgrade because you don't fit the criteria for that account.– quidApr 22, 2017 at 23:20
The specific answer to your question
"Does threatening to close the account ... [give me negotiating power]"
The simple factual answer is:
1) For large banks, eg BoA in your example, simply no, not at all. (*)
whereas
2) In the US milieu, for local credit unions, yes. The manager or any senior staff member - really any staff member at your local branch is under high pressure to keep accounts and add new accounts. if you are polite but genuinely and clearly (politely) express that you "may well have to close your account over the issue", you can often get fees refunded or whatever.
(*) Footnote, the big banks are so useless - there isn't even anyone you could explain your "demand" to. The min-wage employees you're talking to would just glaze over and look through you, it would mean zero.
From the bank's perspective, they are offering a service and within their rights to charge appropriately for that service. Depending on the size of their operation, they may have considerable overhead costs that they need to recoup one way or another to continue operating (profitably, they hope).
Traditionally, banks would encourage you to save with them by offering interest growth on your deposits. Meanwhile they would invest your (and all of their customer's) funds in securities or loans to other patrons that they anticipate will generate income for them at a faster rate than the interest they pay back to you. These days however, this overly simplified model is relatively insignificant in consumer banking. Instead, they've found they can make a lot more profit by simply charging fees for the handling of your funds, and when they want to loan money to consumers they just borrow from a central bank.
What this means is that the size of your balance (unless abnormally huge) is of little interest to a branch manager - it doesn't generate revenue for them much faster than a tiny balance with the same number of transactions would. To put it simply, they can live without you, and your threatening to leave, even if you follow through, is barely going to do anything to their bottom line. They will let you.
If you DO have an abnormally huge balance, and it's all in a simple checking or savings account, then it might make them pause for thought. But if that's true then frankly you're doing banking wrong and should move those funds somewhere where they can work harder for you in terms of growth. They might even suggest so themselves and direct you to one of their own "personal wealth managers".
answered Apr 21, 2017 at 17:55
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I don't have that much, but it is much more than the cost of their often useless and overpriced services that they are dying to sell you for $100. Yet they don't care to see suddenly several times that much leaving the account because they don't want to offer for free something they provided me for free before. This is hard to understand for me. Apr 21, 2017 at 18:36
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An example: Bank adds fees that generate $10 extra profit per year from all 10,000 of their customers. 5% of the customers get fed up and leave because of the new fees (the rest are too lazy and just pay it). Were those 500 customers each generating $200 or more in profit each year? If they were, don't introduce the new fees, it's too costly. If they weren't, go ahead, you'll make more money. They don't have to care whether or not YOU are comfortable with the new fees, they only have to care about the AVERAGE sentiment, and how much that might cost them compared to how much they stand to gain. Apr 21, 2017 at 18:49
This is one of those questions where if you have to ask then the answer is no, they will not negotiate with you. Pretty much the only chance you have to get special treatment is if you have a private banker assigned to your portfolio of accounts.
I am sure they do not want to lose you as a customer because even if you hold enough in balances to get your fee waived they are still making money on your deposit. However, what little they make from you is not enough to carve out special features for your accounts. If you are the type of customer that has this kind of sway you likely already know it.
thus they will lose a lot of money from my savingsNo it doesn't happens. Is your balance in the account in millions ? If not you leaving the bank is inconsequential for the bank, so rule out that. But if you have been a good customer, they will try their best to keep you back. Whether you will get what you want will depend on how you deal with them, but is worth giving a try.